Wisenbaker v. State

Decision Date11 August 1993
Docket NumberNo. 3-91-443-CR,3-91-443-CR
Citation860 S.W.2d 681
PartiesHouston Madison WISENBAKER, Appellant, v. The STATE of Texas, Appellee.
CourtTexas Court of Appeals

Roy E. Greenwood, Austin, for appellant.

Ronald Earle, Dist. Atty., Patricia Robertson, Asst. Dist. Atty., Austin, for appellee.


CARROLL, Chief Justice.

A jury found Houston Madison Wisenbaker guilty of the failure to remit motor fuel taxes and assessed punishment, enhanced by prior felony convictions, at seventeen years' imprisonment and a $10,000 fine. Finding error during the punishment phase, we will reverse the judgment and remand the cause for a new hearing on punishment.


Appellant operated two truck-stop businesses located along Interstate-10 between San Antonio and Houston. The State contends appellant devised and implemented a scheme to avoid paying state motor fuel taxes on diesel fuel sold at these facilities. Appellant and D.H.B. Petroleum, Inc., a bonded supplier of diesel fuel, agreed that D.H.B. would sell fuel to the truck stops tax-free. As authorization for the tax-free sales, appellant provided D.H.B. with a supplier permit number for B.B. Fuels, Inc. B.B. Fuels was the ostensible intermediary for the transactions; however, the fuel was delivered by D.H.B. directly to the truck stops.

Appellant further insulated himself from the transactions by setting up a trust to control the truck stops and by appointing his brother-in-law, Rafael Gonzales, as trustee. Additionally, most of the truck stops' dealings with D.H.B. were conducted by appellant's employee, Sonny Adams. Later, some tax-free fuel sales to the truck stops were made pursuant to a permit issued to North Wey Trading Company and pursuant to a "signed statement" executed by K.C. Gathering Company. Some tanker truck manifests were falsified to show that deliveries to the truck stops were made to other locations.

From September 1987 to June 1988, over two million gallons of diesel fuel were sold by D.H.B. to the truck stops through B.B. Fuels, North Wey, and K.C. Gathering. The fuel was sold tax-free by D.H.B. and later sold by the truck stops at the retail price to truck drivers. State motor fuel taxes were never paid to the State on the fuel sold from the two truck stops. An investigation of D.H.B. by the Comptroller of Public Accounts in turn led to an investigation of B.B. Fuels. The investigation revealed that over four hundred thousand dollars in motor fuel taxes were owed to the State on fuel sold at the truck stops.

B.B. Fuels's tax-free permit indicated that its owner was Steve A. Smith. Smith apparently was never involved in these transactions, and it is unclear whether such a person exists. The social security number provided for Smith on B.B. Fuels's permit application is assigned to a different person, a child living in Minnesota. Comptroller investigators could not locate Smith or any other official of B.B. Fuels. Appellant had previously mentioned, in a joking manner, that he intended to start a company called "B & B Fuels" or "B & B Oil Company" and that the initials stood for Bob Bullock, who at that time was the Comptroller of Public Accounts.

In the indictment, the State alleged a single offense: On or about April 25, 1988, appellant, "while acting as a supplier of diesel fuel, intentionally and knowingly fail[ed] to remit to the Comptroller of Public Accounts of the State of Texas, diesel fuel tax funds collected by [appellant]" that he was required "to remit ... under Chapter 153, Section 153.221(a) of the Texas Tax Code." (Emphasis added). See Act of June 10, 1981, 67th Leg., R.S., ch. 389, sec. 1, § 153.221(a), 1981 Tex.Gen.Laws 1490, 1623-24 (Tex.Tax Code Ann. § 153.221(a), since amended); Tex.Tax Code Ann. § 153.403(29) (West 1992). 1 These charges were enhanced by prior felony convictions set out in the indictment. At trial, the jury returned a guilty verdict and imposed a sentence of seventeen years' imprisonment and a fine of $10,000. Appellant urges fifteen points of error.


The Tax Code sets out a complicated system for the taxation of motor fuel transactions. Appellant has attempted to circumvent this system. Generally, under the motor fuel tax provisions, all diesel fuel sold in Texas is subject to the tax unless an exemption applies. The provisions are structured so that all diesel fuel that is ultimately used for a nonexempt purpose is taxed at some point in the distribution chain. Ultimately, the "user" bears the tax. See Tex.Tax Code Ann. § 153.206(a)-(c) (West 1992). There is a presumption that, absent documentation showing an applicable exemption, a sale is for a taxable purpose. See Tex.Tax Code Ann. § 153.013(a) (West 1992).

Certain fuel transactions are tax exempt. In the immediate cause, only the exemptions for sales between permitted suppliers and sales pursuant to a "signed statement" are at issue. See Tex.Tax Code Ann. § 153.205(c) (West 1992); Act of June 10, 1981, 67th Leg., R.S., ch. 389, sec. 1, § 153.205, 1981 Tex.Gen.Laws 1490, 1616-17 (Tex.Tax Code Ann. § 153.205, since amended). A sale between two permitted suppliers is a transaction where the buyer is a permitted supplier who plans to resell the fuel to another nonconsumer. This exemption simplifies wholesale transactions. Depending on the nature of the resale, the subsequent transaction may or may not be taxable. A sale pursuant to a "signed statement" is a sale where the buyer provides a sworn document stating that the fuel will be used only for nonhighway use and will not be resold. See Tax Code § 153.205(a). This provision facilitates sales to entities, such as agricultural businesses, that buy and use fuel in large quantities for exempt purposes.

In most instances, a retail dealer will not be able to buy fuel tax-free because the dealer will not hold a supplier permit and will not be able to provide a signed statement that the fuel will be used for an exempt purpose. The dealer may recoup the tax it has paid to its supplier by passing through the tax in the retail price of the fuel. If the dealer resells the fuel in an exempt transaction, the dealer may apply to the State for a refund of taxes it has paid through its supplier. Act of June 10, 1981, 67th Leg., R.S., ch. 389, sec. 1, § 153.222(a), 1981 Tex.Gen.Laws 1490, 1624 (Tex.Tax Code Ann. § 153.222(a), since amended). If a dealer has not paid the tax to its supplier, however, the dealer must collect tax on all nonexempt sales and pay those taxes to the State. Tax Code § 153.206(b).

The last two transactions in the distribution chain--the sale by the final supplier to the dealer and the sale by the dealer to a consumer--usually will be taxable. See Cannon Ball Truck Stop, Inc. v. Mobil Oil Corp., 501 S.W.2d 927, 929 (Tex.Civ.App.--Houston [14th Dist.] 1973, writ ref'd n.r.e.). The key to appellant's scheme was the elimination of a clearly identifiable transaction between the final supplier and the truck stops.

Sufficiency of the Evidence

In his fifth point of error, appellant contends the evidence is insufficient to support the convictions because there is no evidence to show that he was a "supplier" of diesel fuel, and proof he was "acting as a supplier" is insufficient for prosecution.

The critical inquiry on review of the legal sufficiency of the evidence to support a criminal conviction is whether the record evidence could reasonably support a finding of guilt beyond a reasonable doubt. This Court does not ask whether it believes that the evidence at trial established guilt beyond a reasonable doubt. Instead, the relevant question is whether, after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt. Jackson v. Virginia, 443 U.S. 307, 318-19, 99 S.Ct. 2781, 2788-89, 61 L.Ed.2d 560 (1979); Griffin v. State, 614 S.W.2d 155, 159 (Tex.Crim.App.1981).

Appellant is charged with the failure to remit taxes he collected "while acting as a supplier." Accordingly, the State was limited to proving appellant was criminally liable as a "supplier." See Roberts v. State, 513 S.W.2d 870, 871 (Tex.Crim.App.1974); Easley v. State, 167 Tex.Crim. 156, 319 S.W.2d 325, 326 (Tex.Crim.App.1959). The elements of the offense charged by the State are as follows: (1) the defendant is a supplier, as defined under the Tax Code, (2) who intentionally and knowingly (3) sold diesel fuel in a taxable transaction and (4) failed to remit the fuel tax collected on that sale to the State.

The theme of the State's case is that appellant set up B.B. Fuels as a sham corporation and that appellant, acting as a supplier under B.B. Fuels's permit, failed to remit taxes collected from the sale of fuel to the truck stops. The State apparently asserts that appellant assumed two roles in these transactions: intermediate supplier and dealer. This gives rise to two potential scenarios of tax liability. First, appellant as a dealer failed to remit taxes he collected from sales to the public. Second, appellant as a supplier failed to remit taxes he collected from sales to himself as a dealer. In this case, the State, by the indictment, attempted to prove only the second scenario. 2

The real issue in this case is not whether appellant was liable for the taxes, but whether he was liable as a supplier, as alleged by the State. It is undisputed that appellant was a dealer in his operation of the retail truck stops. A "dealer" is a "person who is the operator of a service station or other retail outlet and who delivers motor fuel into the fuel supply tanks of motor vehicles or motorboats." Tex.Tax Code Ann. § 153.001(3) (West 1992). However, appellant disputes that he was also a supplier of diesel fuel.

A "supplier" is defined as a person who:

(A) refines, distills, manufactures, produces, or blends for sale or distribution diesel fuel in this...

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