OAG 40-64.

• Case Date: September 23, 1940
• Court: Oregon

Oregon Attorney General Opinions 1940. OAG 40-64. 76OPINION NO. 40-64[20 Or. Op. Atty. Gen. 76]Gasoline used in construction of naval air station at Tongue Point, Oregon, under contract in which United States assumes direct liability for payment, is not subject to Oregon gasoline tax.September 23, 1940.Hon. Earl Snell,Secretary of State. Dear Mr. Snell: With your letter of September 19, 1940, you enclosed a letter from Richfield Oil Corporation, from which it appears that the navy department has awarded a contract to the Austin Company for the construction of certain naval defense facilities at various points on the Pacific Coast, including the naval air station at Tongue Point, Astoria, Oregon, such contract being on a cost-plus-a-fixed-fee basis. Also enclosed therewith is a copy of a letter signed by the commander and the lieutenant commander of the U. S. Naval Air Station, Seattle, Washington, in which it is stated that the navy department has recently awarded a contract to the said Austin Company for the construction of certain "Navy Defense Facilities", including naval air station Tongue Point, Astoria, Oregon; that

"this contract is not of the conventional lump sum type but is of a 'cost plus a fixed fee' type, was specifically authorized by Congress, and personally signed by the Secretary of the Navy, in accordance with existing law. The Government will reimburse the contractor for all expenditures for labor, material and services of all kinds, and in all such purchasing, hiring, etc., the Austin Company is, in effect, a direct agent of the government. Sales made to that company for this particular contract will be made in the name of the U. S. Government (U. S. Navy) and all purchase orders will carry such statement."

You request to be advised whether or not motor vehicle fuel sold pursuant to said contract, for use as therein stated, is properly exempt from the Oregon tax. Section 55-1602, Oregon Code 1935 Supplement, as amended by section 1, chapter 272, Oregon Laws, 1937, requires that each and every dealer, and subdealer engaged in the sale, use and/or distribution of motor vehicle fuel shall pay to the State of Oregon a license fee of five cents per gallon on all such motor vehicle fuel. Section 55-1610, Oregon Code 1935 Supplement, as amended by section 5, chapter 272, Oregon Laws, 1937, as amended by section 2...