No. ( 1977 )

Mr. Jack Kinstlinger Executive Director Colorado Department of Highways 5201 East Arkansas Avenue Denver, Colorado 80222

Dear Mr. Kinstlinger:

QUESTION PRESENTED AND CONCLUSION

The question you raise is whether the Colorado motor fuel tax is a tax on the ultimate purchaser and consumer of the motor fuel and whether the tax is required to be collected through the chain of distributor — retailer — customer.

In our opinion, the applicable statutory provisions, in light of legislative intent as well as long-standing practice in Colorado with respect to this tax, demonstrate that this tax is the responsibility of the ultimate purchaser and is collected through the distribution chain.

ANALYSIS

This tax is a tax upon the purchase of motor fuel for use in internal combustion engines. C.R.S. 1973, 39-27-101(2),39-27-106. The distributor collects the tax from the purchaser and makes payment to the State as trustee of public funds. C.R.S. 1973, 39-27-106. Although the term "purchaser" is not defined in the statute, neither is the term restricted only to the purchase transaction between a distributor and a retailer in a fashion which would isolate the retailer as the person ultimately responsible for the tax. On the contrary, the Colorado statutes are explicit that the motor fuel tax is imposed in lieu of all other taxes. C.R.S. 1973, 39-27-111.

Reading the statutes as a whole, it is apparent that the legislature intended and expected that the tax would be passed through the marketing chain to the ultimate user. The focus upon the distributor rather than the retailer in the collection process was in the interest of providing an efficient and comparatively inexpensive method of collection rather than requiring each retailer to bear the burden of reporting to the Department of Revenue and handling other administrative details of collection. For years every gas pump in Colorado has been required to post the amount of State gas tax being paid on the transaction at the pump. Moreover, Colorado personal income tax law and forms allow deduction of the gasoline tax paid by the consumer.

SUMMARY

In sum, the motor fuel tax is a tax on the ultimate purchaser, the consumer, and is required to be passed through the distribution chain as an added product cost.

Very truly yours,

J.D. MacFARLANE Attorney General

TAXATION AND REVENUE

C.R.S. 1973, 39-27-101(2) C.R.S. 1973, 39-27-106

HIGHWAYS, DEPT. OF Administration

The Colorado motor fuel tax is a tax on the ultimate purchaser, the consumer, and is required to be passed through the distribution chain as an added product cost.