Ideally, it should below the bottom of the tank, and
 close to the tank.  That's the ideal spot.  But I'v
seen them mounted along a frame rail ahead of the axle
with good results.  A lot of it depends on the type of
pump, and where it will fit.
   You should be using a 100micron filter ahead of the
pump, and a 10 micron after the pump.