Chap. 307.—An ACT to levy a tax upon fuel used in internal combustion engines
for the generation of power to propel motor vehicles; to provide for its collection;
to define users of such fuel; to provide for the licensing of the users of such fuel;
to require users and dealers in such fuel to file reports; to empower the Director
of the Division of Motor Vehicles to issue and cancel licenses of such users; to
prescribe penalties for the failure of such users to make reports or pay taxes;
to empower said Director to estimate the fuel used and inspect records of such
users; to require records to be kept by users; to provide for the refund of taxes
erroneously collected; to permit said Director to exchange information with
officials of other states in connection with the imposition of such tax; to provide
for appeals to courts from the Director’s decisions; to appropriate the revenue
raised by the act, and to appropriate funds to administer the said act. [S B 245]

Approved March 28, 1940

1. Beit enacted by the General Assembly of Virginia as follows:

Section 1. Short Title-—This act, and any amendments thereof,
and supplements thereto, shall be known and may be cited as the
“Use Fuel Tax Act’? and shall include any liquid as heavy as or
heavier than kerosene and which is not taxed under ‘‘Motor Fuel Tax
Act’’ and as so constituted is herein referred to as ‘‘this act.”

Whenever in this act reference is made to a section of this act,
such reference shall extend to and include any amendment of or
supplement thereto, the section so referred to or any section hereafter
enacted in lieu thereof; and unless otherwise provided, whenever a
reference to this act or to any section thereof is made in any amend-
ment or supplement to this act or to any section thereof hereafter
enacted such reference shall be deemed to refer to this act or such
section as the same shall then stand or as hereafter amended.

Section 2. Definitions.—The following words, terms and phrases
as used in this act are, for the purposes thereof, hereby defined as
follows:

(a) ‘Motor vehicles’’ shall mean and include all vehicles, engines.
machines or mechanical contrivances which are propelled by interna
combustion engines or motors upon which or by which any person o1
property is or may be transported or drawn upon a public highway.
(b) “Fuels” shall mean and include all combustible gases anc
liquids used in an internal combustion engine for the generation o!
power to propel vehicles of any kind or character on the public high.
ways except such fuels as are subject to the tax imposed by chapter
two hundred and twelve, act of the General Assembly of nineteer
hundred and thirty-two, approved March twenty-third, nineteer
hundred and thirty-two.

(c) ‘‘Highway”’ shall mean and include every way or place of
whatever nature open to the use of the public for purposes of vehicular
travel in this State, including the streets and alleys in towns and cities.

(d) ‘‘Person” shall mean and include natural persons and part-
nerships, firms, associations and corporations, and the use of the
singular number shall include the plural number.

(e) ‘Use’? shall mean and include, in addition to its original
meaning, the receipt of fuel by any person into a motor vehicle or
into a receptacle from which fuel is supplied by any person to his
own or other motor vehicles.

(f) “User”? shall mean any person who uses and/or consumes
fuel in an internal combustion engine for the generation of power to
propel vehicles of any kind or character on the public highways of
this State.

(g) “Duly licensed user” shall mean and include any user holding
an unrevoked license issued by the division.

(h) “Director” when used in this act shall mean the Director of
the Division of Motor Vehicles.

(i) ‘‘Division’’ when used in this act shall mean the Division of
Motor Vehicles of this State, acting directly or through its duly
authorized officers and agents.

Section 3. Purpose.—The tax imposed by this act is levied for
the purpose of providing revenue to be used by this State to defray
in whole or in part, the cost of construction, reconstruction, and
maintenance of the public highways of this State, and the regulation
of traffic thereon, and for no other purpose.

Section 4. Levy of Tax and Exemptions.—A tax is hereby im-
posed on all users of fuel upon the use of such fuel by any person
within this State only when such fuel is used in an internal combustion
engine for the generation of power to propel motor vehicles of any
kind or character on the public highways at the rate of five cents (5c)
per gallon, to be computed in the manner hereinafter set forth.

Fuel used by the United States or any of the governmental agen-
cies thereof shall not be subject to tax hereunder.

Section 5. Application for License; Contents; Licensing of Users.
—(a) It shall be unlawful for any user to use or consume any such
fuel within this State unless such user is the holder of an uncancelled
license issued by the division. To procure such license every user
shall file with the director an application upon oath in such form as
the director may prescribe setting forth the name and address of
the user, and description of motor vehicles owned by him in which
fuel will be used.

(b) In the event that—
(1) Any application for a license to use fuel as a user in this State
shall be filed by any person whose license shall at any time thereto-
fore have been cancelled for cause by the director, or in case

(2) Said director shall be of the opinion that such application is
not filed in good faith, or that

(3) Such application is filed by some person as a subterfuge for
the real person in interest whose license or registration shall thereto-
fore have been cancelled for cause by said director.

Then and in any of said events the director after a hearing of
which the applicant shall have been given five days notice in writing
and in which said applicant shall have the right to appear in person
or by counsel and present testimony, shall have and is hereby given
the right and authority to refuse to issue to said person a license
certificate in this State.

(c) The application in proper form having been accepted for
filing and the other conditions and requirements of this section having
been complied with, the director shall issue to such user a license and
such license shall remain in full force and effect, unless cancelled as
provided in this act; provided, however, that no license shall be issued
for more than one year and shall be renewable on July first of each

ar.

(d) The license so issued by the director shall not be assignable
and shall be valid only for the user in whose name issued and shall be
displayed conspicuously by the user on each motor vehicle so used.

(e) The director shall keep and file all applications with an
alphabetical index thereof, together with a record of all licensed users.

Section 6. Tax Reports: Computation and Payment of Tax.—On
or before the twentieth day of each calendar month, each user of
fuel shall render to the director a statement on forms prepared and
furnished by the said director, which shall be sworn to by one of the
principal officers in the case of domestic corporations, or by the resi-
dent general agent or attorney-in-fact; by chief accountant or officer
in case of foreign corporations; by the managing agent or owner in
case of a firm or association of persons; or by the user in all other
cases; which statement shall show the quantity of fuel on hand on
the first and last day of the preceding calendar month; the quantity
of fuel received, produced, manufactured, refined or compounded
during the preceding calendar month; and the quantities of fuel used
within the State of Virginia during the preceding calendar month,
and such user shall at the time of rendering such report, pay to the
director the tax or taxes herein levied on all fuel used within the
State of Virginia during the preceding calendar month.

Section 7. Sales to Unlicensed Users: Collection of Tax by Seller;
Status of Seller—

(a) When any dealer or seller of fuel shall sell such fuel to a non-
resident, not licensed under this act, the said dealer or seller thereby
assumes the liability for payment of the tax to this State, and shall
forthwith report such sales and pay the tax to the division on the
twentieth day of each calendar month.

(b) For the purpose of this act such dealers or sellers making
such sales must be licensed as users, and shall be amenable to the
provisions of this act in the same degree and capacity as any duly
licensed user.

(c) Any dealer or seller failing to comply with the provisions of
this section shall be deemed guilty of a misdemeanor and upon con-
viction thereof shall be punished in accordance with the provisions
of section sixteen of this act.

Section 8. Report of Sales by Dealers or Resellers.—On or before
the twentieth day of each calendar month, each dealer or reseller of
fuel shall render to the director a statement on forms prepared by
the said director, which shaJl be sworn to by the dealer or reseller;
said statement shall show each and every sale made by the dealer or
reseller during the prior calendar month. Each sale must be speci-
fically noted on said statement, and shall show the quantity and
date of sale, and shall further state the license serial number of the
user who has been properly licensed by the division as a duly licensed
user.

Any dealer or reseller dealing in fuel and selling same for use in
the propulsion of a motor vehicle powered by an internal combustion
engine, and who shall fail to submit the monthly reports, as provided
for in this section, shall be deemed guilty of a misdemeanor and upon
conviction thereof shall be punished in accordance with the provisions
of section sixteen of this act.

Section 9. Power of Director to Cancel Licenses.—If a user shall
at any time file a false monthly report of the data or information re-
quired by this act, or shall fail, refuse or neglect to file the monthly
report as required by this act, or to pay the full amount of the tax
as required by this act, or fails to keep accurate records of quantities
of fuel received, produced, refined, manufactured, compounded, or
used in this State, the director may forthwith cancel the license of
said user, and notify such user in writing of such cancellation by regis-
tered mail to the last known address of such user appearing on the
files of the director.

The director is hereby given the power to cancel any license
issued to any such user upon the written request of the user.

Section 10. Penalty for Failure to Report and/or Pay Taxes
Promptly.—When any user shall fail to submit its monthly report to
the director by the twentieth day of the following month, or when
such user fails to submit the data required by section eight of this
act in such monthly report, or when such user shall fail to pay to the
director the amount of taxes hereby imposed when the same shall
be payable, there shall be automatically added thereto a penalty
equal to twenty-five per centum (25%) of the said tax, to be paid by
such user. Thereafter said tax and penalty shall bear interest at the
rate of one per centum (1%) per month until the said tax is paid.

If any such user shall fail to pay such tax, penalty and interest
within thirty days (30 days) after the said tax shall be due, the Attor-
ney General or the director shall bring appropriate action for the
recovery of such tax, penalty and interest, and judgment shall be
rendered for the amount so found to be due together with costs, pro-
vided, however, that if it shall be found as a fact such failure to pa
was wilful on the part of such user, judgment shall be rendered fc
double the amount of the tax found to be due, with costs. All reme
dies now, or which may hereafter be, given by the laws of this Stat
for the collection or enforcement of taxes are hereby expressly give
for the collection and enforcement of judgments recovered unde
this section, and the director, with the approval of the Attorne
General, may employ an attorney to institute and prosecute prope
proceedings to enforce payment of the taxes, penalty and interest, pro
vided for by this act and to pay a reasonable compensation for th
services of said attorney out of funds appropriated for the adminis
tration of this act.

Section 11. Director May Estimate Fuel Used.—Whenever any
user shall neglect or refuse to make and file any report for any calenda
month as required by this act or shall file an incorrect or fraudulen
report, the director shall determine, from any information obtainabl
the number of gallons of fuel with respect to which the user has in.
curred liability under the use fuel tax laws of the State of Virginia
In any action or proceeding for the collection of the fuel tax and /o:
any penalties or interest imposed in connection therewith, an assess.
ment by the director of the amount of the tax due and /or interest o1
penalties due to this State shall constitute prima facie evidence of
the claim of the State, and the burden of proof shall be upon the use
to show that the assessment was incorrect and contrary to the law.

Section 12. Retention of Records by Users.—Each user shall
maintain and keep, for a period of two (2) years, such record or records
of fuel received, produced, manufactured, refined, compounded, o1
used within this State by such user, together with invoices, bills of
lading, and other pertinent records and papers as may be required
by the director for the reasonable administration of this act.

Section 13. Inspection of Records.—The director or any deputy,
employee or agent authorized by him is hereby given authority to
examine, during the usual business hours of the day, records, books,
papers, storage tanks, and any other equipment of any user, purchaser,
refiner or common carrier, pertaining to the quantity of fuel received,
oroduced, manufactured, refined, compounded, used, sold, shipped,
or delivered, as the case may be, to verify the truth and accuracy of
any statement, report or return, or to ascertain whether or not the
‘ax imposed by this act has been paid.

Section 14. Discontinuance As a Licensed User.—Whenever any
erson ceases to be a user within the State of Virginia by reason of
he discontinuance, sale or transfer of the motor vehicles of such user,
t shall be the duty of such user to notify the director in writing at
he time the discontinuance, sale or transfer takes effect. Such
1otice shall give the date of discontinuance and, in the event of a sale
r transfer of the motor vehicles, the date thereof and the name and
ddress of the purchaser or transferee thereof. All taxes, penalties,
nd interest under this act, not yet due and payable under the pro-
‘isions of section four (4) hereof shall, notwithstanding such pro-
isions, become due and payable concurrently with such discon-
inuance, sale or transfer, and it shall be the duty oI any sucn user
-o make a report and pay all such taxes, interest, and penalties, and
-o surrender to the director the license certificate theretofore issued
to said user by the director.

Unless the notice above provided for shall have been given to the
Jirector as above provided, such purchaser or transferee shall be
lable to the State of Virginia, for the amount of all taxes, penalties,
and interest under this act accrued against any such user so selling
or transferring his motor vehicles, on the date of such sale or transfer,
but only to the extent of the value of the motor vehicles thereby
acquired from such user.

Section 15. Refund of Taxes Erroneously or Illegally Collected.—

(a) In the event it shall appear to the satisfaction of the director
that any taxes or penalties imposed by this act have been erroneously
or illegally collected from any user, the director shall certify the
amount thereof to the Comptroller of this State, who shall thereupon
draw his warrant for such certified amount on the Treasurer of Vir-
ginia to such user. Such refund shall be paid by the Treasurer.

(b) No refunds shall be made under the provisions of this section
unless a written statement therefor sets forth the circumstances by
reason of which such refund is claimed. The claim shall be in such
form as the director shall prescribe and shall be sworn to by the
claimant, and shall be filed with the director within one (1) year from
the date of the payment of the taxes erroneously or illegally collected.

Section 16. Failure to File Statement; False Statement; Penalties,
etc.—Any person violating any of the provisions of this act, a penalty
for which is not otherwise provided, or who shall fail or refuse to pay
the tax imposed by this act, or who shall engage in business in this
State as a user without being the holder of an uncancelled license to
engage in such business, or who shall fail to make any of the reports
required by this act, or who shall make any false statement in any
application, report or statement required by this act, or who shall
refuse to permit the director or any deputy to examine records as
provided by this act, or who shall fail to keep proper records of quan-
tities of motor fuel received, produced, refined, manufactured, com-
pounded, used and/or delivered in this State as required by this act.
or who shall make any false statement in connection with an applica-
tion for the refund of any moneys or taxes provided in this act, shal
be guilty of a misdemeanor and upon conviction thereof shall, fos
the first offense be fined not more than two hundred dollars ($200.00:
or confined in jail not exceeding six (6) months or both, and for
second and any subsequent offense, be fined not less than two hundrec
dollars ($200.00) nor more than five hundred dollars ($500.00) o:
confined in jail not exceeding one year, or both; provided that 11
addition to the penalty imposed in conformity to the above th
defendant shall be required to pay all taxes and penalties due th
State under this act and/or to pay to the State any other money:
wrongfully withheld or illegally refunded.

Section 17. Exchange of Information Among the States.—Th
director may, in his discretion, upon request duly received from th
officials to whom are entrusted the enforcement of the use fuel tax
laws of any other State, forward to such officials any information
which the director may have in his possession relative to the produc-
tion, manufacture, refining, compounding, receipt, sale, use, trans-
portation and/or shipment by any person of such fuel.

Section 18. Appeal to Courts from Director’s Decisions.—Any
person against whom an order or decision of the director has been
adversely rendered relating to the granting or cancelling of a license,
the filing of reports, the examination of records, or any other matter
where in the findings are in the discretion of the director, may appeal
from such order, decision or action to the circuit court of the city of
Richmond, if such appeal is filed within fifteen (15) days.

Section 19. The Disposition of Taxes Collected and the Cost of
Administering This Act.—All funds collected hereunder by the director
shall be forthwith paid to the State Treasurer and the revenue so
derived is hereby appropriated for the construction, reconstruction,
and maintenance of highways and the regulation of traffic thereon,
and for no other purpose.

For the administration of this act, there is hereby appropriated
a sum sufficient, not to exceed the amount of four thousand dollars
($4,000.00).

Section 20. Act Effective—This act shall become effective on
July first, nineteen hundred and forty.

Section 21. Constitutionality.—If any part or parts, section, sub-
section, sentence, clause or phrase of this act is for any reason de-
clared unconstitutional, such decision shall not affect the validity of
the remaining portions of this act which shall remain standing as
if such act had been passed with the unconstitutional part or parts,
section, subsection, sentence, clause or phrase thereof eliminated;
and the General Assembly hereby declares that it would have passed
this act if such unconstitutional part or parts, section, subsection,
sentence, clause or phrase had not been included herein.