OFFICE OF THE ATTORNEY GENERAL OF TEXAS
AUSTIN
Honorable George 8. Shepparrd
Ccrptroller of Publlo Acaounts
AustSnr Texas
Dear 5lrt opinion BO. o-0689
Rer Is an Archlts
1 rdtor vehiclea upon
s in the 44abtrU4tiOn
ex Ordnanae Plant.
Your latter
the roilowing quest1
the Iredora ffoverment
and uscad by a ooat-plur-
ad in the oonrtrwtlon or a
id bWSUS0 Of the QOXiBtitUti~i
ibutor who made the first sale to
he Qovermeat who delivered the
ooat-plus-s-rired-fee oontractor vould
the tax, but that the oost-p3us con-
llg wed the motor fuel upon the high-
wars in Texas v4d.d be subjoot to sold tax.
“This 4glnlon was suImltted to B’raoso and Alehols
and the McKenzie Construction Campmj, who are operat-
2ng aa Arahiteot-Bngineer-Ramgsr cost-plw-a-rlxed-roe
mnorable George H. 5heppard, page 2
contrautolw In the conatruotl4n or the pantex ord-
nanae Plant at Amarillo, Texas. Hr. 0180 G. Clayton,
Jr., Attorney for these oompanlea, has requested that
ve obtain an opinbn frcnn the Attorney General as to
vhether or not ArohIteat-Engineer-Nanager aoat-plua-
a fired-fee oontraatora are aubjeot to the tax on motor
fuel purohaaed and used by them.
"Hr. Clayton mailed to you a statement or roots
In vbioh he pointed out his reasons for believing that
they vere not subjeut to the tax, together vith 8 oopy
or the oontraot vith the Fader81 Oov8rnment, under vhloh
they vere operating.
"will rou plesae read the statement of recta and
oantraot and advise mo vhethar or not these oomputl8s
are subjeot to the motor fuel tax lmpoaed by the Texas
Lawt or, ir your opinion No. o-499 clearly uovers
their operations, ylesae so advlae me."
In oonnootlon with your inquiry and suyplementa~ thereto,
w have before ua 8 letter and supporting brief lubaitted by Hanor-
able Cl80 0. Clayton, Jr., Attorney for the oantraotor In queatlon,
8rr00tiv8iy stating the position 0r hi8 0iient with remen t0
the aolleotion 0r this motor fuel tcU, and strongly pointing 8 dla-
tination between the ordinary east-plus-a-rixed-rese ooaatruotiona
aontraot auab as was Involved la the apinIon of thlr doparhent
ebnd the 5upreme Oourt Of the UnIted 5Gatea adverted to, 8nd the
Instant l Arehlteot-Engln8er-Uanag8r' oontnot. Ve have also been
kindly rurntahed with a oopy of this partloular oontraat, which la
referred to and made a part of this oplnlm for all purposes, be-
oause It Is upon the terms of said cantract that this opinion turns.
The oontrolllng issue before us Is whether or not the
terms and 9rov1ai4na 0r this so-called A-E-E aost-plus-a-rIxed-ree
oontract aonatitutea the oontraotora thereln named Independent mm-
traatora a4 as to be oubjeot to the exolae, privilege or use tax
levied by the olted motor tie1 tax law of Texas, or mere agenolea
or l.natrumentalItles of' the Federal GovemmeX%t as oontended by the
~~~~o;tIoned brief and oonae uently lamns Fmai 811 direct state
Although it la ale&r Py made to appear from the faotual
atatemen~ berore us that the Pederal Goverime.& was the dlresct pur-
chaser of the motor fkel involved and the A-E-H oontraotor was not
suah proh8aer, with a right 4r Fe2mbttraeaent rr0sl the @overzmont,
“a do not aonalder that the above statad issue hinges upon this
faotj b8C8US8 if suah A-E-W OOntMOtOF i8 an bdep8nd8Itt oontraat-
or end not an agOmy, iMtrUJS8nt8lity or aw Or the &YVOrhEOnt, 8
ootor tu81 t8x ~111 8OOl'UO and be c4lleoted, z’8~ardless or the
nethod used in purchasing auuh motor fuel. That la to say, if the
xotor fuel had been purohaasd by said oontreator (being en tide-
pePdO& oontreotor), direct from the vendor, vlth a right of M-
~burS58IIt fF4lU the yOd8ral GOV8l'QmeUt, as in the f8otS b8tOaO US
in our 09lnlo11 Ilo. o-3049, involving a aement tax, and in the racts
barore the Su9r8ma CoUrt of the United States in the reoent o8aea
4f Alabama va- Booaer, 86 L. Ed. 1, end Curry vs. baited States, 86
L. Rd. 6, the motor fuel tax vould amrue and b8 OOllOotOd by the
dtlly aohatltuted and defined 'dirtributor' of motor fiel, maki.ug
a first sale of this produot to the oontraator, with 8 refund al-
lewd for all such motor fuel as vaa not used upon the hlghvaya~
on the other ha~d, if the @OVeriUSent 8r8ro1888 its uauel optlon
of maklng purchases dlreat Prom the Vendor and delivering such motor
fuel directly to th8 Oontraotor, 88 in the raotual aittmtlon bSror8
us in the Vrlting of our Oplnlon lo. o-4389, then a tax upon the
use..cfmotor fuel by such oontraator, b8iItg 8Il ind8pendsnt OOUtWot-
or, vould 8.ccr'ue eg8Fnat and be paid direotly to tha State br such
aontractor.
Dpon a oareful reading 0r th0 aubxltted aontraot, ve axi
acx98lled to the aonoluslon that the A-II-l uontraotor in qwatlon
is thereby oonatltutcld 811 independent oontractor rather than UI
~ihstrIUEOnt8lity or am Of the Federal @OV8l?llSOllt, and is,
agOlW.iy,
thsWr4r8, under the holding of our Opinion go. O-4389, llab18
for the tax on all rotor fuel purohaaod amI dbllv8red to It by the
@4VOt2USetItand used by it to propel motor vehicles upon the hlgh-
rays oi this State, the oolleotlon th8r84f to be in tha manner in-
dicated ln aald oplnlon.
As stated by the authorities generally ,(gee 39 C. J. 13%
1319) and contrary to the oontaatl4na urged by eontractor aou~-
ael, there la nothing peculiarly inherent tn 8 contract oalllng
ror engineering, archltetitual or managerial aervlaea, ea dlstln-
guiahed from Uoonatruatlona oontraots, vrhlsh p~aoludaa the f4FmOr
type Of COntrleCt from oreating the relationship Of independent
contractor it the parties so deSlr% to oontraot. A oontraot to
furnish the erchiteotual, engineering or managerial service6 for
the oonatrmction of a given projeot for the Government is just as
gonorable George If. Shepperd, Page 4
~0eaaery and occupies no different ol8aalflo8tlon or status, as
flletea to the 18W goY8rdng the relationship Of m8ater and aor-
v-t or independent oontraator, as the uaWi1 aontracrt to actually
.$@gi$tNOt or build the plant or projiat. Under the instant oon-
t-at the aontr8otor undertakes &hd ObligatOs h2melf or itaalf
to furnish the plana end apeclf2oationa and perrom all other aer-
yiQ8S expr8SSly oont8a@atsd therein, in oonneotlon with 8 ape4Ir-
10~11~ deaorlbed projeot, and to furnish the labor, materials,
tools and supplies therefor, vlth right Of lWi&NI'S8~8llt by the
@oveNl6ent f4r the OOSt Of the vork. !!OfOXWnOa is mad8 to the
eutlr8 contract before us for the detailed provisions and terms
which pmnnpt this conolualon, without rmneoeaasrily burdening this
opinion by oopying the same herein. 8urf20e to say, the spa8 gen-
eral r68tUM6 end provisions am present 2.n the Instant aontraat
rhlch ver8 in the oonatruotion uontraot involvsd in our Opinion
Ho. O-3049, in substantially the 88me r0m and nault. we XWrOr
you to said opinion for 8 more detailed dlacusaion of th8 aontraat-
ual prov2ai4na end euthor2tiea vhloh ve deem will o&l1 ror the
aamo result here. We enolose a oopg of said opinion ror your mn-
VOIliOIlOO.
Trusting the fOregoIng hilly tmawew your inqul~, va
8r8
Yours wry truly
ATTGRBZY G’EERRALOF TXA5
mt8j