Is a self-service cardlock fueling site operator responsible for collecting Oregon's use fuel tax?

Plain-English summary

Oregon's Use Fuel Tax Law (UFTL) imposes a per-gallon excise tax on fuel used in motor vehicles. Sellers must collect the tax at the pump unless the vehicle bears a valid permit or user's emblem. Cardlock facilities (unattended self-service stations using encoded customer cards) raised a definitional puzzle. ODOT had been telling cardlock operators since at least 1986 that they weren't responsible for collecting the tax because they couldn't tell at the pump whether the fuel was going into a motor vehicle or some other receptacle.

Chief Counsel Donald Arnold reversed that long-standing administrative practice. The UFTL's definition of "seller" turned on whether the operator "delivered" or "placed" fuel for a price into a motor-vehicle receptacle. A self-service pump still "delivers" fuel: the operator (through automation) hands over and yields possession of the fuel; the customer is then billed. The administrative difficulty of identifying which sales were taxable did not excuse compliance with the statute. Practically, cardlock networks by 2003 could already distinguish taxable from non-taxable transactions, so the technical objection no longer held up.

Currency note

This opinion was issued in 2003. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: What's a cardlock facility?
A: An unattended fueling station typically used by commercial fleets. A customer inserts an encoded access card into a card reader, operates the pump themselves, and is billed periodically through a cardlock network's clearinghouse. There's usually no attendant on site.

Q: Why did ODOT think cardlock operators were excused?
A: Because the unattended site couldn't tell whether the fuel went into a motor vehicle (taxable) or into a container to be hauled to a job site (not taxable in the same way). A 1986 ODOT letter took the position that without an attendant, the operator simply couldn't know which sales to tax.

Q: Why did the 2003 opinion change course?
A: Two reasons. First, the statute's text didn't actually distinguish attended versus unattended fueling. ORS 319.520(10) defines selling fuel for motor vehicle use as "deliver[ing] or plac[ing] fuel for a price into a receptacle on a motor vehicle." That happens at a cardlock pump just as much as at an attended one. Second, by 2003, cardlock networks could electronically distinguish taxable from non-taxable sales, so the practical excuse had evaporated.

Q: Does this mean every transaction at a cardlock is taxed?
A: No. The tax applies only when fuel goes into the receptacle of a motor vehicle for propulsion. A customer who fills a separate container for off-road use is not making a taxable use-fuel sale. But the cardlock operator is the seller for purposes of the transactions that are taxable, and bears the collection and reporting obligation.

Q: What if the vehicle has a valid permit or emblem?
A: ORS 319.665(1) excuses the seller from collecting tax at the pump if the vehicle bears a valid use-fuel permit or user's emblem. The cardlock operator is still the seller, but the at-pump collection obligation is excused for permit holders.

Background and statutory framework

The UFTL (ORS 319.510 to 319.880) imposed a 24-cents-per-gallon excise on fuel used in motor vehicles (ORS 319.530(1)). The collection and reporting structure put the burden on the "seller," defined in ORS 319.520(9) as "a person who sells fuel to a user." ORS 319.520(10) defines selling fuel for motor vehicle use: "to deliver or place fuel for a price into a receptacle on a motor vehicle, from which receptacle the fuel is supplied to propel the motor vehicle."

The opinion applied the PGE v. BOLI text-and-context method. At step one, "deliver" plainly covers automated cardlock dispensing: the operator yields possession of the fuel to authorized cardholders who then run the pump. The text doesn't differentiate attended from unattended delivery. Step one resolved the question, and the opinion didn't reach legislative history.

The earlier administrative practice rested on practical concerns about identifying taxable transactions. Those concerns were policy considerations, not statutory text, and didn't survive the PGE method.

Citations and references

Statutes:
- ORS 319.510 to 319.880, Use Fuel Tax Law
- ORS 319.530(1), excise tax rate
- ORS 319.520(9), definition of seller
- ORS 319.520(10), definition of selling fuel for motor vehicle use
- ORS 319.665(1), seller's tax collection obligation
- ORS 319.675, ORS 319.681, reporting and remittance

Cases:
- PGE v. Bureau of Labor and Industries, 317 Or 606, 859 P2d 1143 (1993), text-context method
- SAIF v. Walker, 330 Or 102, 996 P2d 979 (2000), statutory interpretation refinements

Source

• Landing page: https://www.doj.state.or.us/oregon-department-of-justice/office-of-the-attorney-general/attorney-general-opinions/
• Original PDF: https://www.doj.state.or.us/wp-content/uploads/2003/01/op2003-1.pdf

Original opinion text

HARDY MYERS

PETER D. SHEPHERD

Attorney General

Deputy Attorney General

DEPARTMENT OF JUSTICE
GENERAL COUNSEL DIVISION

January 21, 2003

Mike Marsh, Executive Deputy Director
Oregon Department of Transportation
355 Capitol Street NE, Room 101
Salem, OR 97301-3871
Re:

Opinion Request OP-2003-1

Dear Mr. Marsh:
You have asked us to address a question regarding the manner in which the Use Fuel Tax
Law applies to transactions at "cardlock" fueling facilities. We set out your question and our
short answer, followed by our full discussion.
QUESTION PRESENTED
Is the operator of a cardlock facility a "seller" of use fuel for the purposes of the Use Fuel
Tax Law?
ANSWER GIVEN
Yes.
DISCUSSION
Your question involves interpretation of provisions of the Use Fuel Tax Law of 1943
(UFTL), ORS 319.510 to 319.880. In interpreting the UFTL, our goal is to discern the intent of
the legislature. ORS 174.020; PGE v. Bureau of Labor and Industries, 317 Or 606, 859 P2d
1143 (1993). To do this, we first examine the text and context of the statute. The context
includes other provisions of the same statute, related statutes, and earlier versions of the statute at
issue. Id. at 611; SAIF v. Walker , 330 Or 102, 108-09, 996 P2d 979 (2000). When reviewing the
text and context, we consider dictionary definitions, rules of grammar and statutory and
judicially developed rules of construction that bear directly on how to read the text, such as
"words of common usage typically should be given their plain, natural, and ordinary meaning."
PGE, 317 Or at 611. At this first level, we also consider case law interpreting the statute at issue
and related statutes, including earlier versions of those statutes. SAIF , 330 Or at 109. If the
legislative intent is clear from the text and context, the search ends there. Only if the legislative
intent is not clear from the text and context of the statute, will we look to the legislative history
to attempt to discern that intent. PGE, 317 Or at 611-612. If, after considering text, context and

1162 Court Street NE, Salem, OR 97301-4096 Telephone: (503) 378-6003 Fax: (503) 378-6829 TTY: (503) 378-5938

Mike Marsh, Executive Deputy Director
January 21, 2003
Page 2

legislative history, the intent of the legislature remains unclear, we may resort to general maxims
of statutory construction to resolve any remaining uncertainty as to the meaning of the statute.
Id. at 612.
The UFTL imposes an excise tax "at the rate of 24 cents per gallon on the use of fuel in a
motor vehicle." ORS 319.530(1).1/ The collection and reporting of these taxes are largely the
responsibility of the "seller" of fuel for use in a motor vehicle.2/ The seller must "collect the tax
provided by ORS 319.530 at the time the fuel is sold, unless the vehicle into which the seller
delivers or places the fuel bears a valid permit or user's emblem issued by the Department of
Transportation." ORS 319.665(1). The seller must "report to the Department of Transportation,
on or before the 20th day of each month, the amount of fuel sold, during the preceding calendar
month, subject to the tax provided by ORS 319.530 and such other information pertaining to fuel
handled as the department may require," and must "remit to the Department of Transportation
with each report required by ORS 319.675 all the tax due on the amount of fuel sold less four
percent, which the seller shall retain." ORS 319.675; ORS 319.681.
At issue is whether the operator of a cardlock fueling station is a "seller" for purposes of
the UFTL. The UFTL defines a "seller" as "a person who sells fuel to a user." ORS 319.520(9).
ORS 319.520(10) provides that "'[t]o sell fuel for use in a motor vehicle' means to deliver or
place fuel for a price into a receptacle on a motor vehicle, from which receptacle the fuel is
supplied to propel the motor vehicle." (Emphasis added.) The answer to your question turns,
then, on whether the transaction that occurs at a cardlock facility constitutes the sale of fuel for
use in a motor vehicle within the meaning of ORS 319.520(10).
The principal distinguishing characteristic of a cardlock operation is that it is entirely
self-service. A customer of the facility inserts an encoded access card (or multiple cards) in a
cardreader and operates the pump that delivers fuel into the vehicle. The cost of the fuel
delivered and other salient information regarding the transaction is electronically recorded, and
the customer is periodically billed for accumulated sales.
You explained that, at least since 1986, "[t]he card lock operator has not been held
responsible for collecting the tax since the sites are unattended and the operators would have no
way of knowing if the sale was taxable or not." ODOT articulated this rationale in a 1986 letter
responding to questions from an attorney representing a cardlock company, observing that "[i]n
the case of a cardlock system, the fuel is withdrawn from a common storage tank by customers
of the system; thus the site operator is not capable of knowing whether fuel is placed in a
container for transport to a job site or into a motor vehicle."
We find nothing in the UFTL limiting the obligations imposed by ORS 319.665(1),
319.675 and 319.681 to sellers with attendants on duty at the site of sale or permitting a seller to
avoid the requirements of the UFTL simply by electing to employ a delivery system that makes it
more difficult to comply with the law. The fact that a station operator elects to employ a
delivery system that fails to distinguish taxable transactions from non-taxable transactions would
not excuse the operator from its responsibility to comply with the law.3/ Because the technical
difficulty of identifying taxable transactions does not except cardlock facility operators from the

Mike Marsh, Executive Deputy Director
January 21, 2003
Page 3

Use Fuel Tax Law, we must consider whether other characteristics of cardlock transactions take
those transactions outside the statutory definition of sale of fuel for use in a motor vehicle.
As noted above, the only salient difference between a cardlock transaction and a
transaction at an attended facility appears to be that the station operator or station employee is
not physically present to execute the transaction. You have explained that, apart from that, "a
cardlock user is billed for purchases from all affiliated cardlock sites just as a retail user would
be billed by Chevron for all Chevron credit card purchases from independently owned stations
affiliated with or accepting the Chevron card," and that the "site owner is subsequently
reimbursed for the cost of the use fuel sold from storage, plus profit, via the clearing house of the
cardlock association."
The mere absence of a station representative does not take the cardlock transaction
outside the statutory definition of a sale of fuel for use in a motor vehicle. The definition of
"deliver" that applies in this context is "GIVE, TRANSFER : yield possession or control of : make
or hand over : make delivery of : COMMIT, SURRENDER , RESIGN." WEBSTER'S THIRD NEW INT'L
DICTIONARY, 597 (unabridged ed 1993). Through automated self-service mechanisms, the
cardlock operator "hands over" and "yields possession" of use fuel to authorized customers. The
customer is billed by the cardlock network on behalf of the station operator, which is
compensated accordingly. Fuel to propel the vehicle is therefore "delivered" into the vehicle
"for a price" within the meaning of ORS 319.520(10).
We therefore conclude that the transaction that occurs at a cardlock facility constitutes
the sale of fuel for use in a motor vehicle within the meaning of ORS 319.520. The taxable sales
transaction occurs at the pump. The operator of the cardlock facility from which the fuel is
pumped is the "seller" for purposes of the UFTL, and is therefore responsible for reporting the
transactions, collecting and remitting taxes on the transactions and performing the other
responsibilities of a seller under the law.
Sincerely,
Donald C. Arnold
Chief Counsel
General Counsel Division
DCA:SAW:naw/GEND4517

1/ For purposes of the Use Fuel Tax Law, "'[f]uel' means any combustible gas, liquid or material of a kind used for the generation of power to propel a motor vehicle on the highways except motor vehicle fuel as defined in ORS 319.010." ORS 319.520(4). "Motor vehicle fuel," in turn, "means and includes gasoline and any other inflammable or combustible gas or liquid, by whatever name such gasoline, gas or liquid is known or sold, usable as fuel for the operation of motor vehicles, except gas or liquid, the chief use of which, as determined by the department, is for purposes other than the propulsion of motor vehicles upon the highways of this state." ORS 319.010(12).

2/ These duties were imposed on "sellers" by amendments to the UFTL enacted in 1959. Or Laws 1959, ch 188 (HB 243). Before those amendments, the user of the fuel was responsible for remitting the tax.

3/ Moreover, it appears that technological advances have overcome whatever practical difficulty might once have attended the sorting of transactions at cardlock facilities. Cardlock networks now routinely offer billing services that distinguish between taxable and tax-exempt transactions and provide detailed information on each transaction and its tax ramifications.