### OMNEY GENERAL XAS

PRICE DANIEL Ac%wrXN 11. -a-EuAe ATTORNEY

GENERAL May 31, 1949

Hon. Robert S. ca1vert Comptroller ofPublic Accounts Austin, Texas Opinion No. V-835
Re: Imposition of penalties and interest for nonpayment ofmotor fuel taxes.
Dear Sir:
We quote the following from your letter ofApril 20, 1949:

“A distributor ofmotor fuel holding a Texas permit and operating a refinery in Corpus Christi, Texas, entered into a long term contract with another licensed distributor ofHouston, to sell and deliver to them approximately 3,780,OOO gallons ofmotor fuel per month during the period ofthe contract. Before making any ofthe deliveries the Corpus Christi distributor obtained written authority from the Comptroller to sell motor fuel tax free tothe Houston distributor, under the terms ofSection 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 inexport totheAtlantic Coast Area. Then during one month the Houston distributor ordered 360,841 gallons ofmotor fuel delivered into abarge for coastwise ship**ment** toa Texas port for the purpose oftaxable sales in intrastate commerce, andinasmuch as the sale and delivery was made pursuant tothe standing contract under which all prior purchases hadbeen made for the purpose ofexportation, the Corpus Christi distributor invoiced the motor fuel without including the tax through error, Approximately four months after the delivery ofthe 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 4cents 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 inpenalties and interest are involved inthe two cases.

w* * *

“Inview ofthe fact that inboth ofthe above cases the distributors omitted paying the taxes onthe 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 oflaw make itmandatory uponthe Comptroller to proceed for collection ofsaid penalties and interest? )) (Citations to statutes inparenthesis added.)
The relevant portion ofArticle 7065b-18, V. C. S., reads as follows:“Provided, however, that inaddition tothe penalties shown, ifany distributor or user does notmake 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 ofthe amount due; and ifnot 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 often (10) per cent per annum.” (Emphasis added.)
This directive is expressed in clear, unambiguous, and positive terms. Ifprescribes the results which will flow from noncompliance with its requirements. 3Southerland on**Statutory** Construction (3rd Ed. 1943) Sec. 5818j We are ofthe opinion that itis clearly mandatory in character.

When a statute expressly authorizes the imposition ofa penalty for failure to pay taxes when due, the general rule is that ifno legal excuse for nonpayment is shown, the taxpayer is subject tothe penalty prescribed by the statute. 61 C. J. 1488, Taxation, Sec. 2128. The fact that the tax.payer thought that hedid not owe the tax, or erroneously assumed that the property was not taxableHon. 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.). Inthe Dal- -Gas Co. case the defendant company resisted the imposi!tion of the tax both by asserting the invalidity ofthe taxing statute andby denying that it came within its terms. The court sustained the vai. lidity ofthe statute, held that its terms were applicable tothe company, and further held that the trial court had erred in refusing to include inthejudgment 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 topay any tax for thirty days’from the date when said tax is required by this chapter tobe paid, shall forfeit and pay tothe state ofTexas a penalty often per cent. upon the amount ofsuch tax.’
“Article 7388 also orovides for the recovery of such penalty ina suit brought by theAttorney General. The fact that appellant acted in good faith, or did not think it owed the tax, does not relieve itfrom 1iabiKty for the penalty, itit infact did not pay the taxes dueby it tothe state wtthm the 30 days prescribed by law. Under the undisputed facts inthe case, itappellant was due the amount sued for by the state as delinquent taxes, the statutory penalty had accrued, and thejudgment 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. Inthe absence ofsuch authorization the Comptroller cannot waive or reduce the stated statutory amount. 34 Tex. Jur. 439, 440, Public Officers, Sections 66, 67.

Our holding inthis matter is inaccord with Letter Opinion R-1332 ofthis office which held that the Secretary ofState had no authority towaive, 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 offranchise taxes).J ,

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

SUMMARY
The Comptroller has noauthority towaive or reduce the statutory amount ofpenalties 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