JOHN W. MCCARTHY vs. COMMISSIONER OF REVENUE.

LIACOS, J. The appellant, John W. McCarthy, doing business as D & S Service Station, appeals pursuant to G. L. c. 58A, Section 13, from a decision of the Appellate Tax Board (board) upholding the assessment of a special fuels tax by the Commissioner of Revenue (Commissioner). We conclude that there was no error and affirm.

The parties have agreed on the following facts. McCarthy operates a service station in Springfield, at which he sells gasoline and diesel fuel. He sells all the diesel fuel he purchases and never has owned or leased any motor vehicles using diesel fuel.

From March, 1979, through April, 1980, McCarthy, who was not licensed as a "user-seller" of "special fuels" during this time period, [Note 1] purchased heating oil from two oil companies,

Page 631

neither of which was a "licensed supplier." See G. L. c. 64E, Section 1 (d). [Note 2] Heating oil is special fuel, but it is not subject to a fuel tax when it is used for heating purposes. See G. L. c. 64H, Section 6 (j). When the oil is used as fuel to propel diesel powered motor vehicles, however, it becomes a special fuel under the statute, subject to the excise tax. See G. L. c. 64E, Sections 1 (c), 4, and 10.

In the course of his retail service station business, McCarthy sold the fuel purchased from the two oil companies to customers with diesel operated motor vehicles. The fuel was dispensed to motorists from diesel fuel pumps marked "tax included." McCarthy, however, paid no taxes to the Commonwealth on the diesel fuel which he purchased and sold from March, 1979, through April, 1980. [Note 3] In August, 1980, the Commissioner assessed a deficiency against McCarthy for a special fuels tax for the period at issue in the amount of $14,259.83. See G. L. c. 62C, Sections 26 (b) and 28. [Note 4] Following a hearing, the Commissioner denied McCarthy's application for an abatement, and McCarthy filed a timely appeal under the formal procedure to the board. See G. L. c. 62C, Section 39.

Page 632

The board issued an opinion and findings of fact in support of its decision. See G. L. c. 58A, Section 13. The board considered whether McCarthy could be subject to a special fuels tax pursuant to the first paragraph of G. L. c. 64E, Section 15 (hereinafter Section 15), inserted by St. 1956, c. 619, Section 1, which provides in part: "Any person not licensed under this chapter who delivers to any person other than a licensee under this chapter special fuels upon which the tax due hereunder has not been paid, knowing, or who reasonably should know, that such special fuel is to be used or sold for the purpose of propelling motor vehicles on the public highways, shall be liable for the tax imposed by this chapter." [Note 5] The board concluded that the Commissioner lawfully could assess a special fuels tax on McCarthy, an unlicensed user-supplier who sold diesel fuel for use in motor vehicles driven on public highways. [Note 6]

Conceding that his liability or nonliability for the special fuels tax is determined by Section 15, McCarthy contends that this part of the statute cannot apply to a receiver of special fuels who resells to the public. According to McCarthy, the Legislature, in enacting Section 15, must have intended to impose tax liability only on suppliers of special fuels, since user-sellers or retailers would always know, or "reasonably should know," that the special fuels delivered will be used to propel motor vehicles on the highways. See G. L. c. 64E, Section 15.

Determining whether Section 15 applies to McCarthy, an unlicensed user-seller, "is a mixed question of fact and law. As the board is a State agency charged with administering the tax abatement process, its determination is due some deference." See French v. Assessors of Boston, 383 Mass. 481, 482 (1981). "It is a familiar principle that tax laws are to be strictly construed. The right to tax must be plainly conferred by the statute.

Page 633

It is not to be implied." Cabot v. Commissioner of Corps. & Taxation, 267 Mass. 338, 340 (1929). Moreover, "ambiguities in taxing statutes are to be resolved in favor of the taxpayer." Xtra, Inc. v. Commissioner of Revenue, 380 Mass. 277, 281 (1980). See Cabot v. Commissioner of Corps. & Taxation, supra.

Ordinarily, we do not resort to the legislative history of a statute where it is clear and unambiguous on its face. See Hoffman v. Howmedica, Inc., 373 Mass. 32, 37 (1977); Chouinard, petitioner, 358 Mass. 780, 782 (1971). The Commissioner argues that the statute is clear, and the words "any person" in Section 15 are unambiguous. Yet, in interpreting a general but undefined term used in a taxing statute, we have sanctioned an evaluation of the legislative history so as to reach a result consistent with the statute's purpose. See Xtra, Inc. v. Commissioner of Revenue, supra at 280-281. The word "person," as used in Section 15, could carry the ordinary meaning of "a living human being." See Commonwealth v. Welosky, 276 Mass. 398, 404 (1931), cert. denied, 284 U.S. 684 (1932). However, we have stated that the word "`person' by itself is an equivocal word." Id. at 406. It "has no fixed and rigid signification, but has different meanings dependent upon contemporary conditions, the connection in which it is used, and the result intended to be accomplished." Id. at 404.

The word thus should be construed so as to effectuate the intent of the drafters of the statute. See id. at 405-406. The present Section 15 was adopted by the Legislature in almost identical form from an amendment to a special fuels bill proposed by the Commissioner of Corporations and Taxation. Compare 1956 Senate Doc. No. 460, at 1 and 9, and 1956 Senate Doc. No. 638, at 7, with 1956 Senate Doc. No. 725, at 11, and G. L. c. 64E, Section 15. The purpose of the amendment was to make more efficacious the collection of special fuels taxes by imposing on suppliers, user-sellers, and sellers the responsibility to report the amount of special fuels sold, purchased, or used by them. See 1956 Senate Doc. No. 460, at 1-2. The Commissioner of Corporations and Taxation specifically stated that the special fuels tax could be levied against a supplier or a

Page 634

user-seller, who is either a retailer, such as McCarthy, dispensing special fuels into the fuel tanks of motor vehicles, or one who purchases special fuels for use in his own vehicles. By enacting the proposed amendment, which included Section 15, the Legislature accepted the recommendations of the Commissioner of Corporations and Taxation, and thus must have expected the statute to impose tax liability on an unlicensed user-seller such as the appellant. Compare 1956 Senate Doc. No. 460, at 9, with G. L. c. 64E, Section 15, and 1956 Senate Doc. No. 725, at 11.

The board's analysis of other sections of G. L. c. 64E supports the interpretation of Section 15 as applicable to a wide group of persons who sell or use special fuels in motor vehicles on public highways, including user-sellers. General Laws c. 64E, Section 3, imposes on all "licensees" the duty to keep available for inspection by the Commissioner, all records of all purchases, sales, and use of special fuels. General Laws c. 64E, Section 10, specifically states that purchasers of special fuels must bear the special fuels tax burden, and the amount of the tax always must be included in the sale price of the fuel. General Laws c. 64E, Section 14, requires that any licensee who no longer does business as a user-seller or supplier, and surrenders his license, must pay all accrued taxes on special fuels. Even a person who purchases the former licensee's business may become liable for these taxes under Section 14, unless the transferor properly notified the Commissioner of the sale of the business. Furthermore, G. L. c. 64E, Section 5, inserted by St. 1956, c. 619, Section 1, expressly states that any person who purchases and uses special fuels "in any manner except in the operation of motor vehicles upon . . . highways" (emphasis added), is not liable for the tax imposed on such fuels. [Note 7]

Page 635

The Appellate Tax Board correctly construed Section 15 as applicable to McCarthy. His knowledge that the diesel fuel he sold was "for the purpose of propelling motor vehicles on the public highways," as required by Section 15; is beyond dispute. Thus, the board properly upheld the tax assessed by the Commissioner.

Decision of the Appellate Tax Board affirmed.