Tax Type
Motor Vehicle Fuel Sales Tax
Description
Motor fuel sold at military post exchanges
Topic
Taxability of Persons and Transactions
Date Issued
04-04-1985
April 4, 1985
Re: Collection of Motor Fuel Taxes by Post Exchanges
Dear ****
This will refer to your letter of March 16, 1984 to our ****** District Office in which you address the applicability of the Virginia motor vehicle fuel sales tax to motor fuel sold at military post exchanges.
You assert in your letter that military post exchanges enjoy immunity from direct state taxation and regulatory laws and that post exchanges are therefore not required to collect the motor vehicle fuel sales tax from customers. I concur with you that post exchanges are instrumentalities of the Federal government, Standard Oil Company of California v. Johnson, 316 U.S. 481 (1982), and are therefore entitled to the immunities enjoyed by the Federal government. Inasmuch as State governments have no right to tax any of the constitutional means employed by the Federal government to execute its constitutional powers, M'Culloch v. Maryland, 4 Wheaton 316 (1819), states are normally precluded from directly taxing the Federal government. However, the Hayden-Cartwright Act of 1936 reveals the authority for states to require the collection of specific taxes by the Federal government. A reading of the plan language of 4 U.S.C.A. 104, enacted as part of the Hayden-Cartwright Act, reveals such authority:
All taxes levied by any State, Territory, or the District of Columbia upon, with respect to, or measured by, sales, purchases, storage, or use of gasoline or other motor vehicle fuels may be levied, in the same manner and to the same extent, with respect to such fuels when sold by or through post exchanges, ship stores, ship service stores, commissaries, filing stations, licensed traders. and other similar agencies, located on United States military or other reservations, when such fuels are not for the exclusive use of the United States. Such taxes, so levied, shall be paid to the proper taxing authorities of the State, Territory-, or the District of Columbia, within whose borders the reservation affected may be located. (emphasis added)
Accordingly, the Federal government has waived any potential immunity from the collection of state motor fuel taxes provided that such fuel is not for its exclusive use.
Based upon the foregoing, it is my opinion that military post exchanges are required by Federal and State law to collect and remit the Virginia motor vehicle fuel sales tax on sale of fuel for nongovernmental use. However, I remain willing to study this issue further and am willing to discuss the Federal issue involved with you or members of the Defense and/or Justice Departments.
Sincerely,
W. H. Forst
Tax Commissioner
Re: Collection of Motor Fuel Taxes by Post Exchanges
Dear ****
This will refer to your letter of March 16, 1984 to our ****** District Office in which you address the applicability of the Virginia motor vehicle fuel sales tax to motor fuel sold at military post exchanges.
You assert in your letter that military post exchanges enjoy immunity from direct state taxation and regulatory laws and that post exchanges are therefore not required to collect the motor vehicle fuel sales tax from customers. I concur with you that post exchanges are instrumentalities of the Federal government, Standard Oil Company of California v. Johnson, 316 U.S. 481 (1982), and are therefore entitled to the immunities enjoyed by the Federal government. Inasmuch as State governments have no right to tax any of the constitutional means employed by the Federal government to execute its constitutional powers, M'Culloch v. Maryland, 4 Wheaton 316 (1819), states are normally precluded from directly taxing the Federal government. However, the Hayden-Cartwright Act of 1936 reveals the authority for states to require the collection of specific taxes by the Federal government. A reading of the plan language of 4 U.S.C.A. 104, enacted as part of the Hayden-Cartwright Act, reveals such authority:
All taxes levied by any State, Territory, or the District of Columbia upon, with respect to, or measured by, sales, purchases, storage, or use of gasoline or other motor vehicle fuels may be levied, in the same manner and to the same extent, with respect to such fuels when sold by or through post exchanges, ship stores, ship service stores, commissaries, filing stations, licensed traders. and other similar agencies, located on United States military or other reservations, when such fuels are not for the exclusive use of the United States. Such taxes, so levied, shall be paid to the proper taxing authorities of the State, Territory-, or the District of Columbia, within whose borders the reservation affected may be located. (emphasis added)
Accordingly, the Federal government has waived any potential immunity from the collection of state motor fuel taxes provided that such fuel is not for its exclusive use.
Based upon the foregoing, it is my opinion that military post exchanges are required by Federal and State law to collect and remit the Virginia motor vehicle fuel sales tax on sale of fuel for nongovernmental use. However, I remain willing to study this issue further and am willing to discuss the Federal issue involved with you or members of the Defense and/or Justice Departments.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner