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                            AriMTnN   11.lrncxAa

                             September 26, 1963




        Honorable Robert S. Calvert            Opinion No. C-149
        Comptroller of Public Accounts
        Capitol Station                        R??n:Whether the Comptroller
        Austin, Texas                               of Public Accounts can
                                                    legally pay a tax refund
                                                    on special fuels or motor
                                                    fuels used off the highway
                                                    when the quantity so used
                                                    is determined by either of
        Dear Mr. Calvert:                          the stated methods.
                  In your request for an opinion from this department
        relative to refunds of tax on motor fuels and special fuels,
        as defined by statute, you have given~us two proposed methods
        of keeping records of the amount of fuel used for propelling
        motor vehicles on the public highways and thus rendering same
        subject to taxation, while at the same time allowing~a refund
        of taxes paid on fuel used for the tax-exempt pur~poseof o,per-
        ating loading pumps on the trucks, when the trucks and the power
        take-off for the pumps are powered by the same truck engine which
        draws fuel 'from a sing1.etank. The accounting methods proposed
        are the following:
                  "1. A complete and accurate record of the
             miles traveled by ea~chvehicle measured by hub
             meters or gpee,dometersapproved by ~the C~omptroller,
             and a complete and ac.curaterecord of the fuel
             delivered into the fuel tank or tanks of the
             vehicle would be kept, from which record the
             quantity of fuel used taxable on the roads and
             highways during the month or other taxable period
             would be computed at one-fourth (l/4) of a gallon
             for each mile so traveled and the multiple quantity
             resulting from such computation would be deducted
             from ,the total quantities delivered to the vehicle
             during the period and the'remainder of such fuel
             would be designated as used in such stationary
             pumping units and a claim for tax refund would be
             filed for such off-highway use."
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            Hon. liutert2. Calvert, page 2 (C-149)

                     "2. Or a complete and accurate record of the
                miles traveled and fuel delivered to and used by
                each vehicle would be kept as described in paragraph
                one, above, and the operator, acting under the
                direction and supervision of the Comptroller or his
                representatives, would determine by practicable test
                runs the miles that each truck, or class of trucks
                of the same make, weight and horsepower, will travel
                per gallon of motor fuel and each kind of special
                fuels used. Such mileage factor or factors would
                then be used to determine the quantity of fuel used
                taxable on the roads'and highways by each vehicle
                during the month or other taxable period, which
                quantity so determined on the mileage basis aforesaid
                would be deducted from the total quantities delivered
                to the vehicle during the period and the remainder
                of such fuel would be designated as used in such
                stationary pumping units and a claim for tax refund
                would be filed for such off-highwayuse."
            You then asked the following question:
                     'Will you, therefore, please    advise this depart-
                ment whether it can legally pay a    tax'refund on special
                fuels or motor fuels used off the    highway when the
                quantity so used is determined by    either of the methods
                set out in numbered paragraph one    or two above."
                      As your question assumes, the issue of the entitle-
            ment of the taxpayer to a refund of taxes paid on fuels used
            for off-highway purposes is beyond question. The relevant
            p~ortionof the motor fuel~tax refund statute, Article 9.13,
            Title 122A, Taxation-General, Vernon's Civil Statutes, provides
            in Section (2) as follows:
                           erson (except as hereinafter provided),
                who ,;e   use motor fuel for the nurnose of operating
                or propelline:anv stationarv gasoline engine, motor-
                boat, aircraft.,or tractor used for agricultural
                purposes, or for anv other purpose except in a motor
                vehicle operated or intended to be operated upon the
                public highwavs of this State, ,and who shall have
                aaid the tax imposed upon said motor fuel bv this
                Chapter, either-directly or indirectly, shall, when
                such'person has fully complied with all provisions
                of this Article and the rules and regulations pro-
                mulgated by the Comptroller, be entitled to reim-
                bursement of the tax paid bv him . . ." (Emphasis
                added.)
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    Hon Robert S. Calvert, page 3 (C-149,)

    The refund statute pertaining to the special fuels tax is
    equally explicit, providing as follows in Section (1) of
    Article 10.14 of Title 122A, V.C.S.:
             "Except as otherwise provided by Article 10.15
        of this Chapter, any licensed dealer who shall have
        paid the tax imposed by this Chapter upon any liquified
        gas or distillate fuel which has been used or s$lodef;r
        use by such dealer for any purpose other than P P
          g a motor vehicle upon the public hiphwavs of this
        E&&e, . . .and anv licensed user who shall have paid
        said tax upon any liquified gas or distillate fuel
        which has been used bv such user for anv purpose other
        than propelling a motor vehicle upon said public high-
        wavs. mav file a claim for a refund of the tax or
        taxes so paid . . ." (Emphasis added.)
    In the fact situation stated in your opinion request, the fuels
    are used solely for operating pumps for the loading of products
    into and out of tank trucks. ,When used for such purpose, the
    gasoline truck engine connected to the pumping apparatus is a
    "stationary gasoline engine", to use the exact words of Section
    (2) of Article 9.13, above-quoted, and in addition the fuel is
    being used for a purpose other than to propel a motor vehicle
    and would be eligible for tax refund on that basis alone. The
    strict and literal interpretation of the words" . . .use . . .
    in a motor vehicle e . .'Iin this statute was rejected by this
    office in Opinion No. O-2381, dated July 25, 1940, wherein it
    was demonstrated the legislature clearly intended to impose
    the tax only upon fuel used on the public highways. Opinion
    No. O-2381 considered several fact situations involving power
    equipment connected to truck engines by power take-off devices,
    including'pumps, post-hole diggers and drilling rigs. Although
    fuel for all these operations was ~drawn from the same tank used
    in propelling the vehicle, the opinion held ~such off-highway
    use to be eligible for refund.
              A truck engine powered by special fuels, used to
    operate power take-off devices as stated above, is certainly
    being used for a "purpose other than propelling a motor vehicle
    upon the public highways" as contemplated by the special fuels
    tax refund statute, insSection (1) of Article 10.14, quoted
    above.
              Having thus settled the question of the taxpayer's
    entitlement to refund of the tax, we turn now to your question
    concerning the methods which may be used to record, report and
    pay taxes on the fuels used for propelling motor vehicles on
    the public highways and to keep separate those fuels used for
    tax exempt purposes. This is a simple matter, at least in
    theory, when the method approved in Opinion No. ~~-1462,
Hon. Robert S. Calvert, page 4 (C-149)

written by this office under date of October 24, 1962, is used,
which involves use of two separate fuel tanks, one used to
provide fuel for propelling the vehicle over the highways and
the other used for operating the power take-off pump for
loading the truck cargo. However, as your opinion request
recognized, this method requires expensive additional tanks
and its accuracy in accounting for the fuel used for the dif-
ferent purposes depends entirely upon the attentiveness of
hundreds of truck drivers, who are not concerned with the taxes
involved, each of whom must make eight ($1 valve switches each
time he loads and unloads the tank truck he is driving.
           Nowhere does the statute expressly contemplate the
fact situation with which we are confronted in this case. It
declares in the clearest possible terms that the taxpayer is
entitled'to his refund, but it does not in this particular in-
stance specify how the accounting shall be made of the fuels
used for the separate purposes. Should the taxpayer's refund
Abe denied for lack of an express,statutory command that the
fuels used for the separate purposes should be accounted for
in a particular way? We think not. This is not a case in which
it is a practical impossibility to make a satisfactory accounting
of the taxable and nontaxable fuels used. To the contrary, your
opinion request recognized the desirability of the accounting
methods proposed, and, in fact, the method proposed in your
.numberedparagraph one'has been expressly approved by the
legislature for use in another instance in which it is neces-
sary to determine the amount of motor fuel used from a common
tank for propelling trucks when they are being used at different
times and places for both taxable and tax exempt purposes.
Thus, the third paragraph of Section (7) of Article 9.13, Title
122A, Taxation-General, V.C.S., provides in part:
          "A claimant may account for any part of refund
     motor fuel used upon the public highway, and not
     eligible for tax refund, by one of the following
     methods: . . . (b) Claimant may, by accurately
     measuring the mileage any such vehicle, tractor or
     other conveyance travels upon the public highway,
     deduct from the refund.motor fuel set up in the claim,
     an amount equal to one fourth (l/4) of a gallon for
     each mile or fraction of a mile any such motor vehicle,
     tractor, or other conveyance travels on the public
     highway during the period of the claim, . . ."
Also, a method of accounting rather similar to the   one set
forth in your numbered paragraph two, was approved   by the
legislature for use by certain suppliers and users   in Article
lO.OS, Title 122A, Taxation-General, V.C.S., which   reads as
follows:
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            Hon.Robert S. Calwert, page 5 (C-149)

                      "In the event the tax herein imposed on special
                fuels imported into this State in the fuel supply tanks
                of motor vehicles and the tax on special fuels used in
                motor  vehicles owned or operated by licensed supplier
                or other persons acting as users can be more accurately
                determined on a mileage basis (that is by determining
                and using the total number of miles traveled and the
                total gallons of fuel consumed), or in case it is more
                practicable to so determine the tax, the Comptroller is
                hereby authorized to approve and adopt such basis."
                      Once the legislature has declared the taxpayer's
            right to a refund, asit has in this case, it becomes the duty
            of the Comptroller to pay such refund if the taxpayer renders
            a satisfactory accounting. The Comptroller has ample authority
            to require sufficient and satisfactory proof of the claim for
            refund and to promulgate rules and regulations, if necessary,
            regarding the methods to be used in accounting for the fuels
            used for various purposes. Sections (1) (21, (31, and (71,
            of Article 9.13; Article 9.23; Sections Ill, (21, and (4) of
            Article 10.14; and Article 10.21, all in Title 122A, Taxation-
            General, V.C.S., and Opinion No. WW-1020 of this office dated
            March 16, 1961.
                      Article 10.08 and Section (7) of Article 9.13, both
            ~quotedabove, set forth methods for making exactly the same type
            of accounting as is required in this case, i.e., an accounting
            of the amount of fuel used by motor vehicles operating on public
            highways. In both cases the procedure is to determine',the
            amount of fuel used while operating on public highways, then
            allow the taxpayer to claim a refund for the balance. Whether
            the~balance of the fuel, that used for purposes other than pro-
            pelling the motor vehicle over the public highways, is used
            on private roads or whether it is used to power pumps, post-
            hole diggers, conveyor belts or whatever, the practical problem
            of making a satisfactory accounting is the same. The problem
            is to determine the amount of fuel.su0ject to the tax, pure
            and simple, and the amount of fuel used for other-purposes is
            immaterial. In the absence of a specific statutory directive
            as to the method to be used, the Comptroller will not err in
            allowing motor fuels used onethe public hi ways to be accounted
            for by the method set out in Article 9.13 r7), above-quoted.
            And, since the use of an accounting.method based upon an
            "average miles per gallon" concept was approved by the legis-
            lature in Article 10.08, above-quoted, for use in accounting
            for special fuels used upon the public highways, we believe
            it is clearly within the Comptroller's discretion to allow
            the accounting of special fuels used upon the public highways
            by the method.set out in numbered paragraph two, above.
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            Hon. Robert S. Calvert, page 6 (C-149)

                      It may be that either of the proposed methods of
            accounting is satisfactory for both motor fuels and special
            fuels, or that other methods of accounting not yet known or
            contemplated may prove more desirable. In any event, it is
            clearly the Comptroller's prerogative under the above-refer-
            enced statutes to require sufficient and satisfactory proof
            of the off-highway use and to promulgate rules and regulations
            concerning accounting methods to be used, not inconsistent
            with the statutes.
                      It is, therefore, the opinion of this office that
            you may legally pay a tax refund on motor fuels based upon an
            accounting made in accordance with the procedure set forth in
            numbered paragraph one, above , and that you may legally pay a
            tax refund to a licensed dealer or to a licensed user on
            special fuels based upon an accounting made in accordance
            with the procedure set forth in numbered paragraph two, above,
            under the facts stated. We do not intend to say by this
            opinion that these are the only accounting methods which may
            legally be used; however, in the absence of other statutory
            directives it is perhaps most desirable that methods be used
            which are the same as, or closely analogous to, methods adopted
            by the legislature to account for fuels used on the public
            highways in other instances when the purpose of the accounting
            is the same.
                      In discussion of this matter question has been raised
            as to whether refund of the special fuels tax is barred, under
            the facts stated, by the following provisions of Section (3)
            of Article 10.14, Title 122A, Vernon's Civil Statutes:
                     "Any dealer or user who shall file claim for
                refund of the tax on any special fuel which has
                been delivered into the fuel supplv tank of a
                motor vehicle, or who shall file any invoice in
                a claim for tax refund upon which anv date. figure.
                signature, or other material information is false -
                or incorrect, shall forfeit his right to the entire
                amount of the refund claim filed." (Emphasis added.)
            The definition of the term "motor vehicle" in Section (5) '
            of Article 10.02, V. C. S., is indicative of the intent of the
            legislature embodied in Article 10.14 (31, above quoted, for
            the term is defined as follows:
                      "'Motor vehicle' means any automobile, truck, pick-
                 up, jeep, station wagon, bus or similar vehicle, pro-
                 pelled by a motor or internal combustion engine upon
                 the DubliC hirrhwavs;provided, that any tractor, com-
                 bine, or other vehicle or machine designed primarily
                 for use off the public highways shall be deemed to be
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              Hon. Robert S. Calvert, page 7 (C-149)

                   a motor vehicle when propelled 'or serviced with special
                   fuels for propulsion, upon the public highways."
                   (Emphasis added,)
              A tfuck, or other vehicle, while devoted to off-highway use is
              not a "motor vehicle" within the statutor definition. There-
              fore, it would seem that Article 10.14 (37 is inapplicable to
              the fact situation presented in your opinion request.
                         Was it the intent of the legislature to provide by
              Section (3) of Article 10.14 a prohibition against the refund
              of the special fuels tax on such fuels once they are delivered
              into the fuel supply tank of a motor vehicle, assuming for
              purposes of argument the truck under your'facts while devoted
              to off-highway use is a "motor vehicle?" Section (1) of.the
              same Article (quoted on page 3 herein) is obviously the section
              by which the legislature intended to declare who should be en-
              .titled to refunds, while Section (3) is directed at penalizing
              those who file invoices for tax refunds upon which signatures,
                        dates, or other information is incorrect. If Section
                   were interpreted as prohibiting the refund once the fuels
              are delivered into the fuel supply tank of a motor vehicle,
              it would be directly contrary to and incon,sistentwith Section
               (1) wherein itsis provided that any licensed dealer or licensed
              user may claim a refund for special fuels devoted to off-
                             The statute should, of course, be construed as
                      , not in isolated parts. It is our.duty to harmonize
              the various parts of a statute, whenever possible, keeping in
              mind the intent of the legislature. We cannot believe the
              legislature intended in so oblique a manner to prohibit ab-
              solutely the refund of.taxes on special fuels, once delivered
              into the fuel supply tank of a motor vehicle, when in other
              instances (see Article 10.08 quoted above) it permits such
              refunds for use of the same type fuel under similar circumstances
              by others. Nor would there be any logic in giving special fuels
              different tax treatment than motor fuels in this respect. If
              the trucks in question are "motor vehicles" while'.devotedto.'.,off-
              highway use;',the'n'the1egislature:must have intended to add aft~er
              the underlined ,portionof Section, (a), abov~e.,
                                                             "and used to pro-
              pel said vehicl~eupon a public highway" or words,of similar,
              import;for in no other ways can'the statutebe: harmonized‘and
              the legislative intent be given meaning and effect.
                        You mention in your opinion request your depart-
              mental interpretation of Article 9.13 (7) as applicable to
              this case. Section (7) of Article 9.13 applies only to use of
              motor fuels for highway and non-highway purposes in propelling
              motor vehicles. It has no application to the use of a-motor
              vehicle as a stationary power plant; as in the case at hand.
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        Hon. Robert S. Calvert, page 8 (C-149)

                   Reference is also made in your opinion request to
         Opinion No. v-1563 of this office, dated Dec.ember22, 1952,
        which you construe as authority prohibiting the Comptroller
         from promulgating a rule or regulation allowing tax deductions
         on special fuels used in power units from the same fueltanks
        which propel the motor vehicle over the highways. That
         opinion dealt with the levy of the tax on special fuels when
         such fuels were delivered into the fuel tanks of motor vehicles.
         The basic principles stated in Opinion No. v-1563 are still
         correct. Various provisions of the special fuels tax statute
         still levy the tax at the point of delivery~of the special
        fuel into the fuel tanks of a.motor vehicle, viz, Article
        10.03 (4), Article 10.03 (51, Article 10.13 (2), Article 10.13
         .(J)and Article 10.13 (4). However, since Opinion No. v-1563
        was written in 1952, Article 10.14, permitting the refund of
         special fuels taxes when such fuel is used for any purpose other
         than propelling a motor vehicle upon the public highways of
        .this State, has been added to the statute. Thus, in most in-
         stances the tax is still levied when the special fuel is delivered
         into the fuel tanks of a motor vehicle, as required by the pro-
         visions of Article 10.03 and Article lo113 cited above, but the
         taxpayer may yet claim a refund of such taxes if the special
        fuel so delivered'is not used to propel the vehicle upon the
         public highways, and the allowance of such refund is in no way
         contrary to the provisions of Articles 10.03 or Article 10.13,
         nor is it inconsistent with the holding of Opinion No. v-1563.
                  You also refer ,to a possible inconsistency-in our
        holding in Opinion No. WW-1280, dated March.23, 1962, which
        holds that special fuels delivered into the fuel supply tank
        of a motor vehicle are not subject to tax refunds on the part
        of such fuel used to operate air conditioners installed on such
        vehicles. Although we believe some of the reasoning ~of that
        opinion is open to question, we are not prepared to overrule
        its holding. Air conditioning on a motor vehicle is a part
        of the machinery used while the vehicle is being propelled
        over the highways to provide for the comfort, safety and con-
        venience of the driver and passengers in the vehicle. As
        such it is fairly comparable to the automatic transmission,
        horn, lights, radio, windshield wipers, windshield washers,~
        heater, cigarette lighter and other power accessories in
        common use today in motor vehicles. Each of these accessories
        drains a certain amount of power off the engine of the motor
        vehicle, in one way or another. The vehicle would obtain more
        mileage without such accessories; therefore, in a sense, the
        amount of fuel used to operate such accessories is not used
        to propel the vehicle over the public highways but ratherto
        shift the gears, sound the horn, light the lights, etc. How-
        ever, the overall purpose of all these accessories is to con-
        tribute to the task of propelling the motor vehicle with its
        cargo over the highway; all are part of a group of separate
. .   , .




            Hon. Robert S. Calvert, page 9 (C-149)

            pieces of machinery put together for a common purpose. A motor
            vehicle is not just an engine resting on a frame connected to
            wheels by a transmission. In this day and age, it includes as
            a matter of course an automatic electric starter, generator,
            power brakes , power steering, etc., and we frankly believe the
            ;lirtconditioneris just another accessory on the lengthening
                .
                                      SUMMARY
                     Under the facts stated, the Comptroller may refund
                motor fuel (gasoline) tax and special fuels (butane,
                diesel fuel, etc.) tax when such fuels are used for
                purposes other than propelling motor vehicles over the
                highway even though the fuel is drawn from the same
                fuel supply tank as the fuel used for propelling the
                vehicle over the highway, and the Comptroller may.
                legally authorize in the case of motor fuel taxes, the
                method of accounting for same set out in numbered
                paragraph one, above. In the case of special fuels
                taxes,~the Comptroller may pay a tax refund to a licensed
                dealer or licensed user and may legally authorize the
                method of accounting for same set out in numbered para-
                graph two, above.
                                           Very truly yours,
                                           WAGGONER CARR
                                           Attorney General


                                         BY: +w
                                            Ernest orten erry
                                            Assistant Attorney Gener
            EF:sg

            APPROVED:
            OPINION COMMITTEE
            W. V. Geppert, Chairman
            J. Arthur Sandlin
            Bill Allen
            Robert Smith
            George Gray
            APPROVED FOR THE ATTORNEY GENERAL
            BY: Stanton Stone
