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NEW YORK v. UNITED STATES

May 6, 1994

STATE OF NEW YORK, Plaintiff,
v.
UNITED STATES OF AMERICA, Defendant.


CHOLAKIS


The opinion of the court was delivered by: CON. G. CHOLAKIS

MEMORANDUM DECISION AND ORDER

 Plaintiff State of New York brings this action to recover from the United States $ 3,535,560.80 in gasoline excise taxes that it claims it is entitled to under 26 U.S.C. §§ 4221(a)(4) and 6421(c). From the complaint, it appears that the State is claiming reimbursement for an amount equal to the manufacturers excise tax attributable to gasoline that State employees purchased to fuel their own automobiles and consumed while travelling on State business from 1985 to the present. See 26 U.S.C. § 4081(imposing excise tax on gasoline); see also Complaint at P 15. For reasons that follow, the court shall grant the motion to dismiss.

 Discussion

 Because the State did not directly pay the tax to the United States, the State is not seeking a refund of taxes in the technical sense. Rather, the State is asking the court to compel the United States to reimburse it in an amount equal to the tax that the United States imposed on the "removal" of the gasoline from its origin. The State's theory, and the theory of the statute that authorizes reimbursement, is that the excise tax on gasoline is ultimately passed on to the consumer of the gasoline.

 The United States brings a motion to dismiss the complaint on the grounds that the sale of gasoline to a State employee who thereafter consumes the gasoline while on State business is not a sale "to a State or local government for the exclusive use of a State or local government" and therefore the State is not entitled to reimbursement under 26 U.S.C. § 6421(c). See Fed. R. Civ. P. 12(b)(6).

 The court has subject matter jurisdiction under 28 U.S.C. § 1346(a). *fn1"

 Applicable Statutes

 Three sections of the Internal Revenue Code of 1986 (the Code) lie at the heart of this case. The first relevant section imposes an excise tax on gasoline, generally when it is removed from the original refineries or terminals or when it is imported into the nation. It provides in relevant part as follows:

 
§ 4081. Imposition of tax.
 
(a) Tax imposed. (1) Tax on removal, entry, or sale. (A) In general. There is hereby imposed a tax at the rate specified in paragraph (2) on--
 
(i) the removal of gasoline from any refinery,
 
(ii) the removal of gasoline from any terminal,
 
(iii) the entry into the United States of gasoline for consumption, use, ...

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