OMNEY GENERAL 

XAS 

PRICE DANIEL 

Ac%wrXN 11. -a-EuAe 

ATTORNEY GENERAL 

May 31, 1949 

Hon. Robert S. ca1vert 

Comptroller of Public Accounts 

Austin, Texas 

Opinion No. V-835 

Re: Imposition of penalties 

and interest for nonpayment of motor fuel 

taxes. 

Dear Sir: 

We quote the following from your letter of April 20, 1949: 

“A distributor of motor fuel holding a Texas permit 

and operating a refinery in Corpus Christi, Texas, entered into a long term contract with another licensed distributor of Houston, to sell and deliver to them approximately 3,780,OOO gallons of motor fuel per month during 

the period of the contract. Before making any of the deliveries the Corpus Christi distributor obtained written 

authority from the Comptroller to sell motor fuel tax 

free to the Houston distributor, under the terms of Section 5(a) of . . .(Article 7065b, V. C. S.) as long as such 

motor fuel was purchased for further refining or for exportation by the purchaser as authorized by the said Section 5(a). 

“For several months the motor fuel was delivered 

into tankers or barges for and upon orders from the 

Houston distributor who thereafter moved the product 

in export to the Atlantic Coast Area. Then during one 

month the Houston distributor ordered 360,841 gallons 

of motor fuel delivered into a barge for coastwise shipment to a Texas port for the purpose of taxable sales in 

intrastate commerce, and inasmuch as the sale and delivery was made pursuant to the standing contract under 

which all prior purchases had been made for the purpose 

of exportation, the Corpus Christi distributor invoiced 

the motor fuel without including the tax through error, 

Approximately four months after the delivery of the motor fuel. and before the Comptroller made its next periodical audit, the Corpus Christi distributor detected the 

error, collected the tax from the Houston distributor, 

and remitted the tax at 4 cents per gallon to the Comptroller without adding penalties and interest. 
.’ 

Hon. Robert S. Calvert, Page 2 (V-835) 

“A very similar transaction occurred between two 

distributors operating under a similar contract in 

Amarillo, who likewise caught the error and paid the 

tax some three months later before the Comptroller’s 

periodical audit was made. Around $6000 in penalties 

and interest are involved in the two cases. 

w * * * 

“In view of the fact that in both of the above cases 

the distributors omitted paying the taxes on the dates 

they became due under the law through unintentional 

errors, the delinquent taxes being paid volun@rily and 

before the delinquency was detected by the Comptroller 

audits, may the Comptroller waive or omit the 2% and 

8% penalties and the 10% interest prescribed . . . (by 

Article 7065b-18, V. C. S.) or does the . . . prescription 

of law make it mandatory upon the Comptroller to proceed for collection of said penalties and interest? )) 

(Citations to statutes in parenthesis added.) 

The relevant portion of Article 7065b-18, V. C. S., reads 

as follows: 

“Provided, however, that in addition to the penalties shown, if any distributor or user does not make 

remittance for any taxes collected, or pay any taxes 

due the State by said distributor or user, within the 

time prescribed by law, said distributor or user shall 

forfeit two (2) per cent of the amount due; and if not 

remitted or paid within twenty (20) days from the due 

date, he shall forfeit an additional eight (8) per cent 

penalty. All past due taxes and penalties shall draw 

interest at the rate of ten (10) per cent per annum.” 

(Emphasis added.) 

This directive is expressed in clear, unambiguous, and 

positive terms. If prescribes the results which will flow from noncompliance with its requirements. 3 Southerland on Statutory Construction (3rd Ed. 1943) Sec. 5818j We are of the opinion that it is 

clearly mandatory in character. 

When a statute expressly authorizes the imposition of a 

penalty for failure to pay taxes when due, the general rule is that 

if no legal excuse for nonpayment is shown, the taxpayer is subject 

to the penalty prescribed by the statute. 61 C. J. 1488, Taxation, 

Sec. 2128. The fact that the tax.payer thought that he did not owe 

the tax, or erroneously assumed that the property was not taxable 
Hon. Robert S. Calvert, Page 3 (V-835) 

does not defeat the penalty. 61 C. J. 1489, citing Dallas Gas Co. v. 

State, 261 S.W. 1063 (Tex. Civ. App. 1924, error ref.). In the Dal- 

-Gas Co. case the defendant company resisted the imposi!tion of 

the tax both by asserting the invalidity of the taxing statute and by 

denying that it came within its terms. The court sustained the vai. 

lidity of the statute, held that its terms were applicable to the company, and further held that the trial court had erred in refusing to 

include in the judgment the prescribed penalty prayed for by the 

State. The court said: 

“Article 7387, Revised Statutes 1911, provides the 

following which applies to the occupation tax due by 

appellant: 

* ‘Any person, company, corporation or association, or any receiver or receivers, failing to pay any 

tax for thirty days’from the date when said tax is required by this chapter to be paid, shall forfeit and pay 

to the state of Texas a penalty of ten per cent. upon the 

amount of such tax.’ 

“Article 7388 also orovides for the recovery of 

such penalty in a suit brought by the Attorney General. 

The fact that appellant acted in good faith, or did not 

think it owed the tax, does not relieve it from 1iabiKty 

for the penalty, it it in fact did not pay the taxes due by 

it to the state wtthm the 30 days prescribed by law. 

Under the undisputed facts in the case, it appellant was 

due the amount sued for by the state as delinquent taxes, 

the statutory penalty had accrued, and the judgment 

should also have included it.” (Emphasis added.) 

There is no statutory provision which would authorize the 

Comptroller to reduce or waive the penalties and interest here involved. In the absence of such authorization the Comptroller cannot 

waive or reduce the stated statutory amount. 34 Tex. Jur. 439, 440, 

Public Officers, Sections 66, 67. 

Our holding in this matter is in accord with Letter Opinion 

R-1332 of this office which held that the Secretary of State had no 

authority to waive, compromise, or reduce the penalties imposed 

for noncompliance with Articles 7089 (prescribingthe time for filing corporate reports) and 7090, V. C. S. (prescribing date for payment of franchise taxes). 
J , 

Hon. Robert S. Calvert, Page 4 (V-835) 

SUMMARY 

The Comptroller has no authority to waive or reduce 

the statutory amount of penalties and interest imposed 

for failure to pay motor fuel taxes when due. Dallas Gas 

Co. v. State, 261 S.W. 1063 (Tex. Civ. App. 1924, error 

ref.). 

Yours very truly 

ATTORNEY GENERALOFTEXAS 

MMC /mwb 

ACTING ATTORNEY GENERAL