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WAGNON v. PRAIRIE BAND POTAWATOMI NATION Opinion of the Court
§§ 79–3408(d)(1)–(2). The Nation argues that these exemp tions make it impossible for a distributor to calculate its “ul timate tax liability” without knowing “whether, where, and to whom the fuel is ultimately sold or delivered.” Brief for Respondent 15. The Nation infers from these provisions that the taxable event is actually the distributors’ postre ceipt delivery of fuel to retailers such as the Nation, rather than the distributors’ initial receipt of the fuel. The Nation’s theory suffers from a number of conceptual defects. First, under Kansas law, a distributor must pay the tax even for fuel that sits in its inventory—fuel that is not (or at least has not yet been) used, sold, or delivered by the distributor.3 But the Nation’s interpretation presumes that the tax is owed only on a distributor’s postreceipt use, sale, or delivery of fuel. As this interpretation cannot be recon ciled with the manner in which the Kansas motor fuel tax is 3
This understanding of the application of the Kansas fuel tax is con firmed by the form that fuel distributors are required to fill out each month pursuant to Kan. Stat. Ann. § 79–3410 (1997). See Kansas Form MF–52, available at http://www.ksrevenue.org/pdf/forms/mf52.pdf (as visited Nov. 21, 2005, and available in Clerk of Court’s case file). The form instructs distributors to enter in line 1 “the total net gallons of gasoline, gasohol and special fuel received or imported” during the preceding month. Id., at 2. The distributors may then “[e]nter the deductions that apply to your business” in lines 2(a)-to-(e) for the preceding month. Those deductions include “[n]et gallons of fuel exported from Kansas,” “[n]et gallons of fuel sold to the U. S. Government,” “[n]et gallons of fuel sold for aviation pur poses,” and “[n]et gallons of dyed diesel fuel received for the month,” the very deductions described in § 79–3408(d), ibid. (emphasis in original). The distributor’s tax liability is then calculated by subtracting the total deductions from the total fuel received, and applying the 2.5 percent han dling allowance to the difference. Thus, the event that generates a dis tributor’s tax liability is its receipt of fuel. And the distributor must pay tax on that fuel even if it is not subsequently delivered or sold. While a distributor may decrease its tax liability by engaging in transactions that entitle it to deductions, such as by selling or delivering fuel to an exempt entity like the United States, its tax liability is unaffected by sales or deliveries to nonexempt entities like the Nation.
