Honorable Robert 9. Calved

Comptroller of 

### Fubllo Aooounts Capitol Statton Austin, Texas opinion No. C- 29
Re: Whethertaxpayers may pay taxes accruing under the Limited Sales, ExOlse andUseTaxAct under protest purwant to the provisiona of Arttiole 1.05, Title 322A, 20A Tax.-Qen. arIdAt’tloit 7057b, Tltlt 122, 20, V.A.T.S., 

### or

## must follow the pro-, 

### oedurt preaoFlbedin DearMr.Calverrtc p&ole 20.10, Title

. Wequote the foWw%ngaxotrpt 

### &omyour lettier requesting our opinion 

### cn the abovecaptloncd eubjeot:

"The tW.ta~ $a3ea ltxoiseand Uee TaxAat" ln ArtlcLe 26.10, provides the 

### speoiflo proowluma to 

### BetolLowed 

### when requsetfng a remna 

### of tree pata ta’the, Comptrcller undbr 

### that Act. That Artl

### 010al80 provides ththspaoiflo methods bywhich8;taxpayer 

### inarbring aotlcn against t,heOoaptmlli~ for the mtnwn ana, 

### rrfuntlof tione Ltilttd SaWa Tut,3;

### pa,4 underthe ob, 

### “Stveral taxvayem havt paid tht Liaited <S %hX 'UlldtS'



## $PCteBt ’in aocordanoewith the term at Article 1.05, Title lMA, an4Artiole 7057b, 

### Title 1e2 md have faiita to f01L0u glgrooe6uree mt 

### cut $81 Artiole

. . “Doe6the taxpayer



### heve the right’ to payhie S&lea,,TaX 12ablllty ‘under 

### proteetl? Is thd Comptroller justi

### fied 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-dLeg., 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 paymentof 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:

“Anyperson, firm or corporatlon~ who

maybe 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, andwhobelieves or contends that~the same lb imlawful andthat such public offlolal Is not lawfully entitled to demandor collect the same.shall, 

### nevertheleae, be required to 

### pay such
amount 

### 86 such pub110olflolal charged ulth the collection thereof maydeem to be due the State, an@shall be entitled to aooompanysuoh paymentwith a written plVotest, setting out fully and ln detail ‘each andevery ground or reason whyit is contended that such demandis unlawful or unauthorized.” Both provide that after suoh protested payment, the taxpayer has ninety days from the date of such paymentto 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 aresmadewith 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 andmannerprovided, orHonorable Robert S. Calvcrt, Page 3 Oplnlon No. c- 29

In the event that It be finally determined In any such suit ~thatthe protested paymentor anyportion 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 amountof the protested payment, together with the pro rata interest earned thereon, if any. Article 20.10, as amendedActs 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 andUseTax Aat, commonlyknownas the Texas Sales TaxAct. Wequote the following excerpt from Article 20.10:
,,,;!$,d~e”c;~;~t~d ;;$$essI~~t Comptroller determines that aiy amount, penalty or Interest haabeen paid more than once or has been erroneously or Illegally colleoted or computed, the ComptrolJer shall set forth that fact In his records, andthe excess amount collected or paid maybe credited on any amountthen due andpayable from the person under thla Chapter. Any balance maybe refunded to the person by whom

it was paid, or his succeasor.s, administrators or executors. Lti3~B~lo~lalms ‘#or Refund, Credit :

.

“(1) Norefund shall be allowed unless a claim therefor is filed with the Comptroller by the person whooverpaid the tax or his attorney, assignee, executor, or admlnletrator, within three (3) yearn from the lrst day of the monthfollowing the close of the quarterly~perlod for whlah the ovdrpagrmdht

wasmade or within elx (6~

ii mmtha afier any deterniinaion 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) month9from the date of overpayment with reapeot to euch determinations, whichever of these three 

### (3) periods expire8 the later.
Nocredit 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 UeeTax; Relmburaement of Retailer for Limited Sales Tax. Nocredit 

### or refurid of any amount suant to paragraphs 

### (A) through (LP 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 whopaid the amount~eimbursee hle retailer fOI,the amount of the llmlted sales tax Imposedupon his vendor wlth respect to the. Bale of the tangible personal property andpaid 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 mannerprescribed for servlae of notice of a deflclency determlnation. ‘1.+

. . .

.

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

Section (Ii) provides that no suit or proceeding maybe 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 deemedto have waived his claim. Theclaimant mayalso file suit If the Comptroller falls to act on a claim within six months after Its filing. Theact 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 amountof use tax due from the plalntiff."(b) If the judgment la for a refund of use taxes, It shall be credited on anyuse tax or amountof use tax due from the plaintiff underthis Chapter. "(2) Thebalance of the judgment shall be refunded to the pl&lntlff." Provision Is madefor paymentof Interest at,the rate of 6s per annum

upon amountsfound to have been Illegally collected from the date of paymentto 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 madefor the recovery of erroneous refunds.

It la evident that Article 20.10 has created a special methodfor the taxpayers Irecovery of sales taxes, which they deemto have been Illegally collected, andthat this Article constitutes, ln effect, an exception to Articles 7057b and 1.05. Wethink that this fact Is clear evidence of the leglelatlve intent that the epecfflc provisions embodied In Artlcle 20.10 constitute an exclusive remedyandmust be followed by taxpayers requesting a refund of taxes paid under the Sale8 TaxAct. Wepass 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 andare presently being held In the suspense account.

-125-_. .

Honorable Robert S. Calvert, Page 

### 6 Opinion No. C- 29

Artlale 

### 20.13reads as follows:

“All fees, taxes, Interest andpenalties imposed, andall amountsof 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. TheComptroller shall remit all fees, taxes, interest andpenalties colleated under this Chapter to the State Treasurer to the depoalted In the State Treasury to the credit of the General RevenuePund. AmendedActs 

### 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 80traneferred. 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 

### 31,1962andAugust 

### 31, 1963. The appropriation of Line Items 

### 8 and 9 was made contingent upon the enactment of HouseBill 20, 57th Leg., 1st C.S. House Bill 20provides for the Limited Sales, Excise andUseTax, for Its administration and enforcement, andallocates the revenues derived therefrom. Theunexpendedbalances In Line Items 6 end 9, es of August 

### 31,1962,are reappropriated for the year beginnlng Septembw 1 1962with the approval of the Governor. Methods of flnanoing items 

### 8 and 9 are provided. Wequote the following exoerpt from page 272:

“Ae muchof the respeatlve taxes :oollected and administered by the Coariptroller a8mapbe 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 andcredit the excess amount ealIect.ed on any amount then due andpayable from the taxpayer. Anybalance maybe 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

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

As to funds which the Comptroller deemslegally collected, he maytreat protested paymentsas a "claim" within the meaningof 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 muatbe followed by the taxpayers andthe Comptroller.

.~.
SIJMMARY Article 20.10,,Tltle 122A, MA, Tax.- Gen., V.A.T.S., has provided an exclusive remedy which mustbe 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., maybe treated by the Comptroller a8 a "Claim" within the provisions of Section (D) of Article 20.10 if the protests are In writing andstate the specific grounds upon which the protests are founded. Thereafter, except as to funds which the Comptroller maydeemillegally collected andwhich 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 andthe taxpayera. Yours very truly, WAGGONER

CARR Attorney General of Texas

Asslatant Att W/jP APPROVED: OPINION

COMMITTEE: W. V. Geppert, Chairman J. C. Davis MaryK. Wall Ii. GradyChandler 'APPROVED

FORTHEATTORNEY

GENERAL By: Stanton Stone