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B-194982 1 (1980-07-21)

handle is hein.gao/gaobabjuv0001 and id is 1 raw text is: S -UNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON, D.C. 20548 IN REPLY REFER TO, OFFICE OF GENERAL COUNSEL B-194982 July 21, 1980 Mr. Dennis Hubscher Authorized Certifying Officer Office of the Secretary Department of the Interior Washington, D. C. 20240 Dear Mr. Hubscher: When you requested the Cottroller General's opinion on the Lpropriety of certifying Xer rporation invoices reflecting _Caifo_ __Sqtatz sales and use taxes on leases we informally advised you that the Justice Department was cMnsidering bringing suit to determine whether the tax collected under California Civil Code section 1656.1 (Deering Supp. 1980) is constitutionally applicable to Federal leases of tangible personal property in California. We advised you that this Office would defer any action until the conclusion of that litigation. That litigation concluded recently with enforcement of a permanent injunction restraining the assessment and collection of the tax on Federal leases. No. CV79-03359-R (C. D. Calif. December 20, 1979), motion to stay enforcement denied, March 19, 1980. This order amounts to a decision that the tax is uncon- stitutional, and the ban on taxing Federal leases will remain in effect throughout any appeals of this 'decision. Accordingly, from this point forward, unless the Supreme Court reverses the District Court's decision or the California legislature again amends the sales tax collection statute, it is improper for you to certify any amount on an invoice for the rental of tangible personal property which separately states or otherwise reflects the addition of California sales tax imposed on the United States. It would also be improper at this time for you to pay amounts designated as sales tax on the Xerox Corporation invoices submitted with your request ($25.80 on the invoice dated January 8, 1979 and $15.67 on the invoice dated April 17, 1979). Now that the assessment of this tax has been declared unconstitutional, no authority exists for such payment. 0,

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