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B-195246 1 (1979-08-08)

handle is hein.gao/gaobactzj0001 and id is 1 raw text is: A I 1i6b. Ik6i United States Gennral Accounting Office Office 9f Washington, DC 20548 Genera'l Counsel In Replj Referto; B-195246 Mr. Edmund J., Wiar, Jr. !A aL mkQ 3vaitable to pubito re National Wear.her Service, Eastern Region National Ocegnic and Atmospheric August .3, 1979 Administratton Department of Commerce 585 Stewart Avenue Garden City, New York 11530 Dear Mr. Wiatr; This is in response to your question about whether State sales taxes or late payment charges on utility bills may be paid by a Federal agency. The general rule is, of course, that the Federal Government in Am- mune from payment of State taxes. However, in Alabama v. King and Boozer, 314 U.S. 1 (1941), the United States Supreme Court held that the Federal Government is not constitutionally immune from bearing the financial burden of a State tax as long as the legal incidence of the tax is not laid directly upon the Federal Government. See United States v. Mississippi Tax Commission, 421 U.S, 599 (1979); United States v. County of Fresno, 429 U.S. 452 (1977). The determination of where the incidence falls--i.e., which party is legally responsible for the payment of the tax, is a matter of statutory construction. For example, in 55 Comp. Gen. 1358 (1976) our Office discussed the legal incidence of the gasoline taxes of several States. In that opinion, our decision on whether the Federal Government should pay the tax charged when it purchased gasoline in those Staves turned upon whether the statute places the legal incidence of the tax upon the seller or the purchaner. If the tax is placed on the seller, he is legally liable for payment of the tax. The increased costs to him of selling his product can he passed on to kne Federal Government, as purchaser. Even though the tax is separately listed, the amount of the tax can be viewed as part of the price of the goods or services. On the other hand, if the statute requires that the tax be collected from the purchaser, then the legal incidence of the tax falls upon the Federal Government as consumer. Because payment of the tax is required of the Federal Government by law in those instances, the tax imposes an unconstitutional burden on the Feder&'l Government and may not be paid. 4i I' I 1 6 I I

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