Honorable Robert 9. Calved 

Comptroller of Fubllo Aooounts 

Capitol St at ton 

Austin, Texas 

opinion No. C- 29 

Re: Whether taxpayers may 

pay taxes accruing under the Limited Sales, 

ExOlse and Use Tax Act 

under protest purwant 

to the provisiona of 

Arttiole 1.05, Title 

322A, 20A Tax.-Qen. 

arId At’tloit 7057b, 

Tltlt 122, 20, V.A.T.S., 

or must follow the pro-, 

oedurt preaoFlbed in 

Dear Mr. Calverrtc 

p&ole 20.10, Title 

. 

We quote the foWw%ng axotrpt &om your lettier requesting our opinion cn the above captloncd eubjeot: 

"The tW.ta~ $a3ea ltxoise and Uee 

Tax Aat" ln ArtlcLe 26.10, provides the 

speoiflo proowluma to Be tolLowed when 

requsetfng a remna of tree pata ta’ the, 

Comptrcller undbr that Act. That Artl010 al80 provides thth spaoiflo methods 

by which 8; taxpayer inar bring aotlcn 

against t,he Ooaptmlli~ for the mtnwn 

ana, rrfuntl of tione 

Ltilttd SaWa Tut, 3; 

pa,4 under the 

ob, 

“Stveral taxvayem havt paid tht 

Liaited <S %hX 'UlldtS' $PCteBt ’ in 

aocordanoe with the term at Article 

1.05, Title lMA, an4 Artiole 7057b, 

Title 1e2 md have faiita to f01L0u 

glgrooe6uree mt cut $81 Artiole 

. . 

“Doe6 the taxpayer heve the right’ 

to pay hie S&lea,,TaX 12ablllty ‘under 

proteetl? Is thd Comptroller justified In dtpositing such Panda aa are 

paid Wdtr probsrst ’ ti the general 
. 

Honorable Robert S. Calvert, Page 2 Opinion No. C- 29 

revenue fund without waiting for the 

lapse of the statutory ninety days?” 

Article 1.05, Title 122A, Ch. 1, 20A, Taxatlon-General, 

Vernonts Annotated Texas Statutes, Is derived from Acts 1933, 

43x-d Leg., Ch. 214, p. 637, end Acts 1939, 46th Leg., p. 643. 

Article 1.05 is, In fact, Identical with Article 7057b. Title 

122, Ch. 1, 20, V.A.T.S., except that certain seotlone have 

been renumbered, a few words omitted, and Section 5 (granting 

extensions to prior taxpayers), Section 6 (extending the provisions of the act to taxes theretofore paid under protest), 

Section 7 (providing that the law shall be cumulative of all 

laws relating to the payment of taxes and fees of undetermined 

status) and Section 8 (providing a severability clause) have 

been entirely omitted. 

Both of these Articles contain the following provlelan: 

“Any person, firm or corporatlon~ who 

may be required to pay to the head of 

any department of the State Government 

any oooupatlon, gross receipt, franchise, 

license or other privilege tax or fee, 

and who believes or contends that~ the 

same lb imlawful and that such public 

offlolal Is not lawfully entitled to 

demand or collect the same. shall, 

nevertheleae, be required to pay such 

amount 86 such pub110 olflolal charged 

ulth the collection thereof may deem 

to be due the State, an@ shall be entitled to aooompany suoh payment with 

a written plVotest, setting out fully 

and ln detail ‘each and every ground 

or reason why it is contended that 

such demand is unlawful or unauthorized.” 

Both provide that after suoh protested payment, the 

taxpayer has ninety days from the date of such payment to 

file suit In Travis County against the public offlolal 

oharged with the duty of collecting such taxes or fees, the 

State Treasurer and the Attorney General. The issues to be 

determined In such suits are limited to those raised In the 

written protest. Detalled.provlslons ares made with regard 

to these suite. 

Both ArtloleB require that the taxes be held In a 

eimpense account with the State Treasurer and provlde that if 

suit is nat brought wlthin the time and manner provided, or 
Honorable Robert S. Calvcrt, Page 3 Oplnlon No. c- 29 

In the event that It be finally determined In any such suit 

~that the protested payment or any portion thereof, together 

with the pro ,rata interest earned thereon, if any, belong8 

to the State, then the State Treasurer shall transfer such 

money from the suapense account to the proper fund In the 

State Treasury. In the event the taxpayer IS successful In 

hle suit, the,State Treasurer must then refund the amount of 

the protested payment, together with the pro rata interest 

earned thereon, if any. 

Article 20.10, as amended Acts 1961, 57th Leg., 1st 

C.S., Ch. 24, Article I, Sec. 1, p. 71, contains specific 

provisions with regard to overpayments and refunds of taxes 

collected under the Limited Sales, Excise and Use Tax Aat, 

commonly known as the Texas Sales Tax Act. 

We quote the following excerpt from Article 20.10: 

,,,;!$,d~e”c;~;~t~d ;;$$essI~~t 

Comptroller determines that aiy amount, 

penalty or Interest haa been paid more 

than once or has been erroneously or 

Illegally colleoted or computed, the 

ComptrolJer shall set forth that fact 

In his records, and the excess amount 

collected or paid may be credited on 

any amount then due and payable from 

the person under thla Chapter. Any 

balance may be refunded to the person 

by whom it was paid, or his succeasor.s, 

administrators or executors. 

Lti3~B~lo~lalms ‘#or Refund, Credit : 

. 

“(1) No refund shall be allowed 

unless a claim therefor is 

filed with the Comptroller 

by the person who overpaid 

the tax or his attorney, 

assignee, executor, or admlnletrator, within three (3) 

yearn from the lrst day of the 

month following the close of 

the quarterly~perlod for whlah 

the ovdrpagrmdht was made or 

within elx (6~ 

ii 

mmtha afier 

any deterniina ion becomes 

final under p~nsraph (A) 
. . 

Honorable Robert S. Calvert, Page 4 Opinion No. C- 29 

“(2) 

through (0) of Article 20.06 

or within alx (6) month9 from 

the date of overpayment with 

reapeot to euch determinations, 

whichever of these three (3) 

periods expire8 the later. 

No credit shall be allowed after 

the expiration of the period speakfled for flllng claims for refund 

unless a claim for credit Is filed 

with the Camptroller within such 

period, or unlees the credit relates 

to a period for whioh a waiver la 

given pursuant to paragraph (D) 

under Artlale 20.06. 

“(C) Credit or Refund for Uee Tax; Relmburaement of Retailer for Limited Sales Tax. 

No credit or refurid of any amount 

suant to paragraphs (A) through (L P 

aid purof Article. 20.03 shall be allowed on the ground that 

the storege, use or other ocneumptlon of the 

tangible personal property Is exempted under 

Artlale 20.04 unlese the person who paid the 

amount ~eimbursee hle retailer fOI, the amount 

of the llmlted sales tax Imposed upon his 

vendor wlth respect to the. Bale of the tangible personal property and paid by the vendor $0 the State. 

“(D) Claim for Refund, Credit: Form: : 

Contents. Every ala&n shall be in writing 

and a&all etate the specific ground8 upon 

which the claim If founded. 

Wal;!E) Effect of Failure t6 File Claim: 

Failure to file a claim within 

time pieecrlbed in paragraph (B) of this 

the 

Article conatitutees a waiver of any demand 

agalnet the State on aaoount of overpayment. 

ser;iF! Notice of Disallowance of Claim: 

Within thirty (39) days after 

dlsallok.ng any olaim in whole or ln part, 

the Comptroller shall serve notice of his 

action on the cla%mant In the manner prescribed for servlae of notice of a deflc lency determlnat ion. ‘1 
.+ . . . 

. 

Honorable Robert 9. Calvert, Page 5 Opinion No. C- 29 

Section (Ii) provides that no suit or proceeding may be 

maintained for recovery of any tax allegedly Illegally collected unless a claim for a refund has been du3y filed. WlthIn ninety days after the mailing of the Comptroller's notice 

rejecting a claim filed pursuant "to this Chapter", the 

claimant must bring an action in a court of competent jurlsdlctlon In Travis County, Texas, against the Comptroller on 

the grounds set forth ln the claim, or he will be deemed to 

have waived his claim. The claimant may also file suit If 

the Comptroller falls to act on a claim within six months 

after Its filing. The act provides that If judgment Is rendered for the plaintiff, It shall be granted as follows: 

"(a) If the judgment Is for a refund of taxes, 1t:shall be credited 

on any limited sales or use tax or 

amount of use tax due from the plalntiff. 

"(b) If the judgment la for a refund of use taxes, It shall be credited 

on any use tax or amount of use tax due 

from the plaintiff underthis Chapter. 

"(2) The balance of the judgment shall 

be refunded to the pl&lntlff." 

Provision Is made for payment of Interest at,the rate of 

6s per annum upon amounts found to have been Illegally collected from the date of payment to the date of allowance o? 

aredlt, or to a date preceding the date of the refund warrant 

but not more than thirty days, the date to be determined by 

the Comptroller. Further apeclflc provlslons are made for 

the recovery of erroneous refunds. 

It la evident that Article 20.10 has created a special 

method for the taxpayers I recovery of sales taxes, which they 

deem to have been Illegally collected, and that this Article 

constitutes, ln effect, an exception to Articles 7057b and 

1.05. We think that this fact Is clear evidence of the leglelatlve intent that the epecfflc provisions embodied In Artlcle 20.10 constitute an exclusive remedy and must be followed 

by taxpayers requesting a refund of taxes paid under the 

Sale8 Tax Act. 

We pass to a consideration of what action the Comptroller 

should take with regard to such funds a8 have been paid under 

Articles 7057b and 1.05 and are presently being held In the 

suspense account. 

-125- 
_. . 

Honorable Robert S. Calvert, Page 6 Opinion No. C- 29 

Artlale 20.13 reads as follows: 

“All fees, taxes, Interest and penalties imposed, and all amounts of tax required to be paid to the State under’thla 

Chapter shall be paid to the Comptroller 

in the form of remlttanoes payable to 

the Comptroller of Public Accounts of 

Texas. The Comptroller shall remit all 

fees, taxes, interest and penalties 

colleated under this Chapter to the 

State Treasurer to the depoalted In the 

State Treasury to the credit of the 

General Revenue Pund. Amended Acts 1961, 

p. 71, ch, 24, 

In view of this express pravlston of the Sales Tax Act, the 

funds which are being held In the suepenae account should be 

transferred to the Qeneral Revenue Fund. In the State Treasury. 

We pass now to a ConsideratSon of the proper disposition 

of the funds 80 traneferred. Senate Bill NO. 1, Chapter 62, 

p. 203, Acts 57th Leg., First Called Seeslon (196x), being the 

Qaneral Appropriation Bill, contains, at pages 271 and 272, 

the appropriations. for the Comptroller of Public Accounts for 

the years ending August 31, 1962 and August 31, 1963. The 

appropriation of Line Items 8 and 9 was made contingent upon 

the enactment of House Bill 20, 57th Leg., 1st C.S. House 

Bill 20 provides for the Limited Sales, Excise and Use Tax, for 

Its administration and enforcement, and allocates the revenues 

derived therefrom. The unexpended balances In Line Items 6 

end 9, es of August 31, 1962, are reappropriated for the year 

beginnlng Septembw 1 1962 with the approval of the Governor. 

Methods of flnanoing items 8 and 9 are provided. We quote 

the following exoerpt from page 272: 

“Ae much of the respeatlve taxes 

:oollected and administered by the Coariptroller a8 map be necessary la hereby 

.* appropriated and set asldf? to pay refunds as provided by law. 

i 

Should the Comptroller determine that any of the funds In 

question have been erroneously or Illegally collected, he Is 

authorized under the provisions of Artlole 20.10 (A) to set 

forth that faot in his reoorda and credit the excess amount 

ealIect.ed on any amount then due and payable from the taxpayer. 

Any balance may be refUndet¶ to the taxpayer, his successors, 

admlnletrators or executors. The statute thus specifically 

authorizes refunds in suoh cases and an appropriation has been 

made therefor. 

-126 

. 

. . 

&A 
Honorable Robert 9. Calvert, Page 7 Opinion No. C- 29 

As to funds which the Comptroller deems legally collected, he may treat protested payments as a "claim" within 

the meaning of Section (D) of Article 20.10 If the protests 

are In writing and state the specific grounds upon which the 

protests are founded. However, thereafter, the procedural 

steps provided by Article 20.10 muat be followed by the 

taxpayers and the Comptroller. 

. ~. 

SIJMMARY 

Article 20.10,,Tltle 122A, MA, Tax.- 

Gen., V.A.T.S., has provided an exclusive remedy which must be followed by taxpayers seeking 

to recover sales taxes which they claim have 

been Illegally collected. Such funds as have 

been paid under protest pursuant to Articles 

1.05 and 7057b, V.A.T.S., may be treated by 

the Comptroller a8 a "Claim" within the provisions of Section (D) of Article 20.10 if 

the protests are In writing and state the 

specific grounds upon which the protests are 

founded. Thereafter, except as to funds which 

the Comptroller may deem illegally collected 

and which could be credited or refunded as 

provided by Article 20.10, the procedural steps 

provided by Article 20.10 must be followed by 

both the Comptroller and the taxpayera. 

Yours very truly, 

WAGGONER CARR 

Attorney General of Texas 

W/jP Asslatant Att 

APPROVED: 

OPINION COMMITTEE: 

W. V. Geppert, Chairman 

J. C. Davis 

Mary K. Wall 

Ii. Grady Chandler 

'APPROVED FOR THE ATTORNEY GENERAL 

By: Stanton Stone