Sunoco, Inc. v. United States , 908 F.3d 710 ( 2018 )

United States Court of Appeals
for the Federal Circuit
______________________
SUNOCO, INC.,
Plaintiff-Appellant
v.
UNITED STATES,
Defendant-Appellee
______________________
2017-1402
______________________
Appeal from the United States Court of Federal
Claims in No. 1:15-cv-00587-TCW, Judge Thomas C.
Wheeler.
______________________
Decided: November 1, 2018
______________________
GREGORY G. GARRE, Latham & Watkins LLP, Wash-
ington, DC, argued for plaintiff-appellant. Also represent-
ed by ELANA NIGHTINGALE DAWSON, BENJAMIN SNYDER;
GEORGE MILLINGTON CLARKE, III, ERIC M. BISCOPINK,
VIVEK ASHWIN PATEL, KATHRYN E. RIMPFEL, Baker &
McKenzie LLP, Washington, DC; DANIEL ALLEN ROSEN,
New York, NY.
JUDITH ANN HAGLEY, Tax Division, United States
Department of Justice, Washington, DC, argued for
2 SUNOCO, INC. v. UNITED STATES
defendant-appellee. Also represented by GILBERT STEVEN
ROTHENBERG, RICHARD FARBER, DAVID A. HUBBERT.
______________________
Before REYNA, TARANTO, and HUGHES, Circuit Judges.
REYNA, Circuit Judge.
This case concerns whether, under 26 U.S.C. § 6426, a
taxpayer that is entitled to an alcohol fuel mixture credit
may treat the credit as a tax-free direct payment regard-
less of excise-tax liability, or whether a taxpayer must
first use the mixture credit to reduce any excise-tax
liability before receiving payment for any amount of
mixture credit exceeding excise-tax liability. Sunoco, Inc.
appeals from the Court of Federal Claims’ grant of the
United States’ motion for judgment on the pleadings and
denial of Sunoco, Inc.’s cross-motion for partial summary
judgment. The Court of Federal Claims determined that
the alcohol fuel mixture credit must first be applied to
reduce a taxpayer’s gasoline excise-tax liability, with any
remaining credit amount treated as a tax-free payment.
We affirm.
BACKGROUND
1. Statutory Framework
Since 1932, the United States has imposed an excise
tax on various types of fuel, including gasoline. See
Revenue Act of 1932, ch. 209, § 617(a), 47 Stat. 169 (1932)
(current version at 26 U.S.C. § 4081). 1 Excise taxes are
taxes collected on the “manufacture, sale, or use of goods,”
or “on an occupation or activity.” Excise, Black’s Law
Dictionary (10th ed. 2014). Under § 4081, the United
1 Unless otherwise specified, all sections referenced
in this opinion are to the Internal Revenue Code set forth
in Title 26 of the United States Code.
SUNOCO, INC. v. UNITED STATES 3
States imposes an excise tax upon the occurrence of
events involving the removal of gasoline from a refinery or
terminal; the entry of gasoline into the United States for
consumption, use, or warehousing; and the sale of gaso-
line to certain purchasers. § 4081(a)(1)(A). In particular,
§ 4081 imposes an excise tax of 18.3 cents per gallon of
gasoline (other than aviation gasoline). § 4081(a)(2)(A)(i). 2
Pursuant to § 9503, the § 4081 gasoline excise tax is
used to fund the Highway Trust Fund, created by the
Federal-Aid Highway Act of 1956 (“Highway Revenue
Act”), Pub. L. No. 84-627, § 209, 70 Stat. 374, 397 (codified
at 26 U.S.C. § 9503). These funds are used to construct
and maintain the nation’s highways and other infrastruc-
ture.
In 1978, Congress started enacting tax incentives for
renewable fuels, such as alcohol fuel blends. See Energy
Tax Act of 1978, Pub. L. No. 95-618, § 221, 92 Stat. 3174,
3185. One of these tax incentives was a reduced excise-
tax rate for alcohol fuel mixtures. See Highway Im-
provement Act of 1982, Pub. L. No. 97-424, 96 Stat. 2097.
While these tax incentives popularized the production of
alcohol fuel mixtures, the lower excise-tax rate resulted in
fewer tax dollars flowing into the Highway Trust Fund.
Roberta F. Mann & Mona L. Hymel, Moonshine to Motor-
fuel: Tax Incentives for Fuel Ethanol, 19 Duke Envtl. L. &
Pol’y F. 43, 49 (2008). The depletion of funds caught the
attention of Congress and triggered a legislative response.
H.R. Rep. No. 108-548, pt. 1, at 141–42 (2004) (“Commit-
tee Report”).
2 The 18.3 cents per gallon excise tax for gasoline
increases to 18.4 cents per gallon after accounting for the
0.1 cents per gallon amount diverted to the Leaking
Underground Storage Tank Trust Fund. § 9503(a)(2)(B).
Certain exhibits thus refer to the excise-tax rate under
§ 4081 as being 18.4 cents per gallon.
4 SUNOCO, INC. v. UNITED STATES
On October 22, 2004, the American Jobs Creation Act
of 2004 (“Jobs Act”) passed. Pub. L. No. 108-357, 118
Stat. 1418. In the Jobs Act, Congress sought to increase
the flow of revenue to the Highway Trust Fund, but did
not want to eliminate the monetary incentives for produc-
ers to blend alcohol with fuel. Congress thus restructured
the relevant statutory framework in three respects: (1) it
eliminated the reduced excise-tax rate for alcohol fuel
blends under § 4081(c), thus leaving an 18.3 cents per
gallon excise tax on all non-aviation gasoline; (2) it enact-
ed an alcohol fuel mixture credit for producers of alcohol
fuel blends set forth in § 6426(b) (the “Mixture Credit”);
and (3) it amended § 9503 to appropriate all excise taxes
imposed under § 4081 to the Highway Trust Fund “with-
out reduction for credits under section 6426.” Jobs Act
§§ 301, 853. Congress stated that the Mixture Credit
“provide[s] a benefit equivalent to the reduced tax rates,
which are being repealed under the provision.” Commit-
tee Report, at 142.
By amending § 9503 of the Highway Revenue Act to
require the 18.3 cents per gallon excise tax be deposited
into the Highway Trust Fund in its entirety, and mandat-
ing that the new Mixture Credit be given to producers at
an amount equivalent to the now-eliminated reduced
excise-tax rate, Congress manufactured a way to shift
funds from the General Fund at the U.S. Department of
the Treasury (“Treasury”) to the Highway Trust Fund
without affecting revenue. See H.R. Rep. No. 108-755, at
305 (2004) (Conf. Rep.) (“Conference Report”) (“The provi-
sion also authorizes the full amount of fuel taxes to be
appropriated to the Highway Trust Fund without reduc-
tion for amounts equivalent to the excise-tax credits
allowed for alcohol fuel mixtures, and the Trust Fund is
not required to reimburse any payments with respect to
qualified alcohol fuel mixtures.”); see also Staff of Joint
Committee On Taxation, Estimated Budget Effects of the
Conference Agreement for H.R. 4520, the “American Jobs
SUNOCO, INC. v. UNITED STATES 5
Creation Act of 2004” (JCX-69-04) at Provision III.A.1
(listing the “excise tax credit (in lieu of reduced tax rate
on gasoline) to certain blenders of alcohol mixtures” as
having “No Revenue Effect”). Under this new regime, the
Highway Trust Fund would consistently receive 18.3
cents per gallon under § 4081 regardless of whether the
excise tax was actually paid by the taxpayer or obtained
from the General Fund at Treasury. In return, alcohol
fuel producers would receive the Mixture Credit without
impacting the Highway Trust Fund.
The statutory changes to §§ 4081, 6426, and 9503 also
led to the creation of § 6427(e)—added to account for the
Mixture Credit—which requires the Secretary of the
Treasury to pay, interest-free, to an alcohol fuel producer
“an amount equal to the alcohol fuel mixture credit.”
§ 6427(e)(1). But “[n]o amount shall be payable . . . with
respect to any mixture or alternative fuel with respect to
which an amount is allowed as a credit under section
6426.” Id. § 6427(e)(3).
2. Procedural History
Sunoco, Inc. (“Sunoco”), a petroleum and petrochemi-
cal company, blends ethanol with gasoline to create
alcohol fuel mixtures. Sunoco filed consolidated tax
returns for 2004 through 2009, and claimed the Mixture
Credit under § 6426 as a credit against its gasoline excise-
tax liability for the years 2005 through 2008. 3
In 2013, Sunoco changed its tax position by submit-
ting both informal and formal claims with the Internal
3 Sunoco only sought to recover income tax pay-
ments for the years 2005 through 2008, but included its
claims for years 2004 and 2009 because “changes to the
taxable income in those years affect the amount of the
refunds for the other years at issue in this case.” J.A.
1001–02.
6 SUNOCO, INC. v. UNITED STATES
Revenue Service (IRS) to recover over $300 million based
on excise-tax expenses for the years 2005 through 2008.
Sunoco claimed that it erroneously reduced its gasoline
excise tax by the amount of Mixture Credit it received,
which had the effect of including the Mixture Credit in its
gross income. In its view, Sunoco was entitled to deduct
the full amount of the gasoline excise tax under § 4081—
without regard to the Mixture Credit—and keep the
Mixture Credit as tax-free income. 4 On March 11, 2015,
the IRS issued a statutory notice of disallowance denying
Sunoco’s claims. 5 On June 10, 2015, Sunoco filed its
refund suit in the United States Court of Federal Claims
(“COFC”). Sunoco, Inc. v. United States, 129 Fed. Cl. 322,
324 (2016); J.A. 16, 1001–13.
On February 12, 2016, the Government moved for
judgment on the pleadings pursuant to Rule 12(c) of the
Rules of the Court of Federal Claims, 6 arguing that the
4 As a taxpayer that sells inventory in its trade or
business, a gasoline producer and fuel supplier like Suno-
co can recover expenses related to the gasoline excise tax
under § 4081 by subtracting, or deducting, the expense
from its gross income. These deductions are also known
as “cost of goods sold.” §§ 162, 263A; Treas. Reg. § 1.61-
3(a)(“Gross income derived from business.”). Applying
any such deduction under § 4081, i.e., including the
gasoline excise tax in the cost of goods sold, results in a
decrease in income tax liability.
5 The IRS also denied Sunoco’s request to increase
its 2009 net operating loss for additional deductions based
on its claim for an increased gasoline excise-tax deduc-
tion. J.A. 1011.
6 Rule 12(c) of the Rules of the Court of Federal
Claims is identical to its counterpart Rule 12(c) of the
Federal Rules of Civil Procedure. We apply the same law
to these comparable Rules. Kraft, Inc. v. United States,
SUNOCO, INC. v. UNITED STATES 7
Jobs Act requires a two-step, or “bifurcated,” approach, in
which first, the Mixture Credit reduces any excise-tax
liability, and then the taxpayer is compensated for any
remaining Mixture Credit via a direct payment pursuant
to § 6427. Sunoco, 129 Fed. Cl. at 325–26. Under the
Government’s interpretation, applying the Mixture Credit
to first reduce the excise-tax liability turns the Mixture
Credit into taxable income up to the point in which excise-
tax liability is reduced to zero. Id. at 329.
Sunoco responded with a cross-motion for partial
summary judgment on liability, arguing that the Mixture
Credit does not affect its excise-tax liability under § 4081.
Sunoco maintained that although the Mixture Credit can
be used to offset excise-tax liability, such liability remains
constant and does not reduce the cost of goods sold under
the statute, therefore making the excise-tax liability fully
deductible. Id. at 325–26. In Sunoco’s view, the entirety
of the Mixture Credit is a tax-free payment to the taxpay-
er under § 6427. Id. at 326.
The COFC found the statutory scheme to be ambigu-
ous, but agreed with the Government’s interpretation and
granted the Government’s motion for judgment on the
pleadings. 7
85 F.3d 602, 605 n.6 (Fed. Cir. 1996), opinion modified on
other grounds on denial of reh’g, 96 F.3d 1428 (Fed. Cir.
1996).
7 During the pendency of this action before the
COFC, the IRS published a notice informing claimants
that they must apply fuel credits awarded under § 6426 to
their § 4081 excise-tax liability, and that a claimant can
only receive direct payments for credits under § 6427 for
fuel credits exceeding the claimant’s § 4081 liability.
I.R.S. Notice 2015-56, 2015 WL 4779497 (Aug. 15, 2015).
As part of the resolution of a discovery dispute, the COFC
8 SUNOCO, INC. v. UNITED STATES
Sunoco appeals. We have jurisdiction under 28 U.S.C.
§ 1295(a)(3).
STANDARD OF REVIEW
We review de novo the COFC’s grant of judgment on
the pleadings under Rule 12(c). Xianli Zhang v. United
States, 640 F.3d 1358, 1364 (Fed. Cir. 2011). We accept
the facts alleged by Sunoco as true and draw all reasona-
ble inferences in its favor. Id. (citing Cary v. United
States, 552 F.3d 1373, 1376 (Fed. Cir. 2009)). Statutory
interpretation is a legal question that we review de novo.
Id. (citing Norfolk Dredging Co. v. United States, 375 F.3d
1106, 1108 (Fed. Cir. 2004)); Shoshone Indian Tribe of
Wind River Reservation v. United States, 364 F.3d 1339,
1345 (Fed. Cir. 2004).
DISCUSSION
Sunoco asks this court to permit it to deduct, as a cost
of goods sold, an excise-tax expense that it never incurred
or paid. Neither the text of the Jobs Act nor its legislative
history supports such a reading of the Internal Revenue
Code.
A. Statutory Language
The parties agree there is no dispute as to the materi-
al facts in this case. J.A. 1044, 1085. Therefore, to de-
termine the tax treatment of the Mixture Credit, we start
with the plain language of the statute. Robinson v. Shell
Oil Co., 519 U.S. 337, 340 (1997). Our inquiry ends there
“if the statutory language is unambiguous and ‘the statu-
tory scheme is coherent and consistent.’” Id. (quoting
United States v. Ron Pair Enters., Inc., 489 U.S. 235, 240
(1989)); Conn. Nat’l Bank v. Germain, 503 U.S. 249, 254
determined that the IRS’s notice was not entitled to
deference under Skidmore v. Swift, 323 U.S. 134 (1944).
Sunoco, Inc. v. United States, 128 Fed. Cl. 345, 346 (2016).
SUNOCO, INC. v. UNITED STATES 9
(1992) (“When the words of a statute are unambiguous,
then, this first canon is also the last.”). Whether the
statutory language is unambiguous is determined by the
text itself, the context in which the language is used, and
the statutory scheme as a whole. Robinson, 519 U.S. at
341 (citing Estate of Cowart v. Nicklos Drilling Co., 505
U.S. 469, 477 (1992), and McCarthy v. Bronson, 500 U.S.
136, 139 (1991)).
Relevant here is the interrelationship among three
statutory sections of the Internal Revenue Code: §§ 6426,
6427, and 9503. Section 6426 provides for the Mixture
Credit, in relevant part, as follows:
(a) Allowance of credits.—There shall be al-
lowed as a credit—
(1) against the tax imposed by section 4081 an
amount equal to the sum of the credits described
in subsections (b), (c), and (e) 8 . . .
(b) Alcohol fuel mixture credit.—
(1) In general.—For purposes of this section, the
alcohol fuel mixture credit is the product of the
applicable amount and the number of gallons of
alcohol used by the taxpayer in producing any al-
cohol fuel mixture for sale or use in a trade or
business of the taxpayer.
§ 6426 (a), (b) (emphasis added).
Section 6427(e) grants an interest-free payment to
taxpayers of an amount equal to the Mixture Credit,
when alcohol, biodiesel, or alternative fuels are used to
produce a mixture. Section 6427(e) states in relevant part
8 Subsections (c) and (e) refer to the biodiesel mix-
ture credit and the alternative fuel mixture credit, respec-
tively.
10 SUNOCO, INC. v. UNITED STATES
(e) Alcohol, biodiesel, or alternative fuel.—
Except as provided in subsection (k)—
(1) used to produce a mixture.—If any person
produces a mixture described in section 6426 in
such person’s trade or business, the Secretary
shall pay (without interest) to such person an
amount equal to the alcohol fuel mixture cred-
it. . . with respect to such mixture.
....
(3) coordination with other repayment pro-
visions.—No amount shall be payable under par-
agraph (1) or (2) 9 with respect to any mixture or
alternative fuel with respect to which an amount
is allowed as a credit under section 6426.
§ 6427(e)(1), (e)(3) (emphasis added). The IRS does not
tax as income direct payments to taxpayers made under
this subsection.
Section 6426(a)(1) explicitly provides that the “credit,”
i.e., the Mixture Credit, is applied “against” the gasoline
excise tax imposed under § 4081. In other words, the
Mixture Credit works to reduce the taxpayer’s overall
excise-tax liability. “[A] credit is any amount that is
allowable as a subtraction from tax liability for the pur-
pose of computing the tax due or refund due.” James
Edward Maule, 506-3rd T.M., Tax Credits: Concepts and
Calculation 43 (BNA 2018); see also id. at 1 (“Generally,
items that are allowable as credits decrease tax liability
by that amount.”); Tax Credit, Black’s Law Dictionary
(10th ed. 2014) (“An amount subtracted directly from
one’s total tax liability, dollar for dollar, as opposed to a
deduction from gross income.—Often shortened to cred-
it.”).
9 Subsection (e)(2) refers to alternative fuel.
SUNOCO, INC. v. UNITED STATES 11
Sunoco argues that a “credit” under § 6426 is a “pay-
ment” of its § 4081 excise-tax liability. We disagree. The
Jobs Act treats “credits” differently from “payments,” as
evidenced by the language in § 6427(e)(1), which grants
payment to a taxpayer in the same amount as the Mix-
ture Credit, to the extent the taxpayer’s excise-tax liabil-
ity is zero. Appellant’s Br. 10 (stating taxpayer receives
“tax-free payment” of the outstanding credit amount when
taxpayer has no excise-tax liability or the Mixture Credit
amount exceeds excise-tax liability); Appellee’s Br. 7–8
(same). That payment, however, is reduced by the
amount of Mixture Credit applied to offset the taxpayer’s
excise-tax liability: “No amount shall be payable under
paragraph (1) . . . with respect to which an amount is
allowed as a credit under section 6426.” § 6427(e)(3)
(emphasis added). The plain language of § 6427(e)(3)
therefore distinguishes the § 6426 “credit” from the “pay-
ment” allowable under § 6427(e)(1). See Randall v.
Loftsgaarden, 478 U.S. 647, 657 (1986) (stating benefit of
tax credit is the “use [of] tax credits to reduce the taxes
otherwise payable”); Schaeffler v. United States, 889 F.3d
238, 248–49 (5th Cir. 2018) (rejecting argument that
foreign tax credit is a payment under the Internal Reve-
nue Code).
Section 9503 only reinforces this reading of § 6426.
Section 9503 directs that the entirety of the 18.3 cents per
gallon gasoline excise tax under § 4081 be appropriated to
the Highway Trust Fund. In this particular instance—
financing the Highway Trust Fund—“taxes received
under sections 4041 and 4081 shall be determined without
reduction for credits under section 6426.” § 9503(b)(1)
(emphasis added).
Sunoco contends that this language shows Congress
did not intend the Mixture Credit to reduce excise-tax
liability because the Treasury would not “receive” the
amount of tax offset by the Mixture Credit. Sunoco’s
argument fails for a number of reasons. First, the statute
12 SUNOCO, INC. v. UNITED STATES
explicitly states that for § 9503(b) purposes only, the
amount of funds deposited into the Highway Trust Fund
is “equivalent to the” gasoline excise tax imposed under
§ 4081 “without reduction” for the Mixture Credit, mean-
ing that the funds deposited into the Highway Trust Fund
are not diminished by any amount of Mixture Credit that
might act against a taxpayer’s excise-tax liability. This is
a logical reading of the statute given that the Jobs Act
was enacted with the intention of maximizing funds
deposited into the Highway Trust Fund. Second, to
interpret § 9503 as Sunoco proposes would render a
portion of the statutory language unnecessary; there
would be no reason to explicitly state that the amount to
be deposited in to the Highway Trust Fund “shall be
determined without reduction for credits under section
6426” if the Mixture Credit were not to serve as an offset
of a taxpayer’s excise-tax liability imposed under § 4081.
Expressed differently, if the Mixture Credit were a tax-
free payment regardless of excise-tax liability, rather than
a reduction of the 18.3 cents per gallon gasoline excise
tax, portions of § 9503 would lack meaning. See TRW Inc.
v. Andrews, 534 U.S. 19, 31 (2001) (“It is a cardinal prin-
ciple of statutory construction that a statute ought, upon
the whole, to be so construed that, if it can be prevented,
no clause, sentence, or word shall be superfluous, void, or
insignificant.” (internal quotation marks omitted)).
Sunoco contends that where Congress intended a
credit to reduce a taxpayer’s excise-tax liability, it explic-
itly said so. Specifically, Sunoco points to §§ 45H and
280C, where a taxpayer’s deductions are “reduced by the
amount of the credit determined for the taxable year
under section 45H(a).” Appellant’s Br. 29. Indeed, no
such explicit language appears with respect to the Mix-
ture Credit, but §§ 45H and 280C operate differently from
§§ 4081 and 6426. Section 45H concerns income tax
credit for low sulfur diesel fuel production. § 45H(a).
Section 280C, titled “Certain expenses for which credits
SUNOCO, INC. v. UNITED STATES 13
are allowable,” simply prevents the taxpayer from obtain-
ing a double benefit by forbidding a deduction for expens-
es already contemplated by the § 45H income tax credit.
Cf. § 162(a) (allowing deduction of business expenses). In
contrast, the Mixture Credit described in § 6426 is a
credit, not an expense—Sunoco never pays it. See 6
William H. Byrnes, IV et al., Mertens Law of Fed. Income
Tax’n § 25:1 (Sept. 2018) (“Section 162 requires that
deductions for a business expense must have been paid or
incurred during the taxable year.”). Consequently, there
is no need to expressly include a provision prohibiting a
taxpayer from deducting the Mixture Credit because it is
not an expense incurred by the taxpayer.
B. Legislative History
The plain meaning of the statute is clear—the Mix-
ture Credit is a credit, not a payment, which must first be
used to decrease a taxpayer’s gasoline excise-tax liability
before receiving any payment under § 6427(e). To over-
come the plain meaning of the statute, Sunoco must show
that the legislative history “embodies an ‘extraordinary
showing of contrary intentions.’” Sharp v. United States,
580 F.3d 1234, 1238 (Fed. Cir. 2009) (quoting Glaxo
Operations UK Ltd. v. Quigg, 894 F.2d 392, 396 (Fed. Cir.
1990) (looking at legislative history “only to determine
whether a clear intent contrary to the plain meaning
exists”)). Sunoco has failed to satisfy this heavy burden.
Sunoco relies on a single sentence from the legislative
history to show that Congress intended the Mixture
Credit to be a payment of excise-tax liability, as opposed
to a reduction in that liability: “[t]he credit is treated as a
payment of the taxpayer’s tax liability received at the
time of the taxable event.” Conference Report, at 304.
But other relevant portions of the Conference Report belie
Sunoco’s position: “In lieu of the reduced excise tax rates,
the provision provides that the alcohol mixture credit
provided under section 40 may be applied against section
14 SUNOCO, INC. v. UNITED STATES
4081 excise tax liability.” Id. (describing the Mixture
Credit as “a benefit equivalent to the reduced tax rates”);
see also id. at 308 (“These payments are intended to
provide an equivalent benefit to replace the partial exemp-
tion for fuels to be blended with alcohol and alcohol fuels
being repealed by this provision.” (emphasis added)).
Thus, the tax benefit of the Mixture Credit is a reduction
in excise-tax liability intended to match the excise-tax
rate reduction in place prior to the enactment of the Jobs
Act.
In addition, the only payments contemplated by Con-
gress refer to those made to the taxpayer under § 6427(e):
Payments with respect to qualified alcohol fuel
mixtures
To the extent the alcohol fuel mixture credit ex-
ceeds any section 4081 liability of a person, the
Secretary is to pay such person an amount equal
to the alcohol fuel mixture credit with respect to
such mixture. These payments are intended to
provide an equivalent benefit to replace the par-
tial exemption for fuels to be blended with alcohol
and alcohol fuels being repealed by the provision.
Id. at 304; see also id. at 308. The Conference Report
further states that “if the person has no section 4081
liability, the credit is totally refundable.” Id. at 308; see
also id. at 303. Thus, Congress intended for any payment
of the Mixture Credit to go to the taxpayer only if the
taxpayer’s excise-tax liability is zero. The legislative
history is therefore at odds with Sunoco’s position and
supports the plain reading of the statute—that the Mix-
ture Credit must first be applied to reduce any § 4081
excise-tax liability, with any remaining Mixture Credit
paid to the taxpayer under § 6427(e).
The reason for this is simple: a taxpayer can claim
either an excise-tax benefit, i.e., the Mixture Credit, or an
SUNOCO, INC. v. UNITED STATES 15
income tax benefit, but not both. See id. at 304 (“The
benefit obtained from the excise tax credit is coordinated
with the alcohol fuels income tax credit.”); § 40(c); J.A.
1003. In Sunoco’s case, it wishes both to pocket the
Mixture Credit as a tax-free refundable payment and to
claim an income tax benefit by including in full its gaso-
line excise-tax liability in its cost of goods sold, thereby
reducing its total taxable income. But such double-
dipping was not intended by Congress. Cf. Conference
Report at 305–06 (stating biodiesel fuel credit, which is
similar to the Mixture Credit, “cannot be claimed for both
income and excise tax purposes”). Indeed, while not
probative of congressional intent in 2004, in 2009, mem-
bers of the Joint Committee on Taxation read § 6426 the
same way as this court does: “[t]he alcohol fuel mixture
credit must first be taken to reduce excise tax liability for
gasoline, diesel fuel or kerosene. Any excess credit may
be taken as a payment or income tax credit.” Joint Com-
mittee on Taxation, Tax Expenditures for Energy Produc-
tion & Conservation, JCX-25-09R at 24 (2009).
Sunoco wishes to treat the Mixture Credit as a de-
ductible expense because it considers the Mixture Credit
as a payment of its tax liability. But Sunoco never incurs
a cost equal to the Mixture Credit. Such a method of
accounting would result in an overall lower taxable in-
come, resulting in a windfall to Sunoco. We have already
established that Congress does not generally allow tax-
payers to receive a tax benefit twice. Nor has Sunoco
shown that Congress intended the Jobs Act to increase
excise-tax subsidies for fuel blenders. Sunoco has failed
to show that the legislative history extraordinarily con-
tradicts the plain reading of the Jobs Act.
CONCLUSION
In light of the plain language of the Jobs Act, we con-
clude that the § 6426(a) Mixture Credit is a reduction of
§ 4081 excise-tax liability, with any credit amount exceed-
16 SUNOCO, INC. v. UNITED STATES
ing said excise-tax liability to be paid to the taxpayer
under § 6427(e).
AFFIRMED
COSTS
No costs.