Hon. Harry Ben&e Texas Employment Austin, Texas

Rear ~#r.

Crazier: q3itr’

‘jyil?=>&Q?ij

**~AUSTXX,,** ?t%?ZAS, **~.**

dune.29, 1948
Crazier, Chairman Commlssiotl **. ‘** 

**.**

Opinion No. v-620
Re: The authority of the Texas RmploymentCommission to grant a refund of taxes volun- ~tarilg paid, upon a finding that an incorrect rate of tax was paid.
We refer to~your letter wherein you req,uest the opinion of this office concerningwhether the Texas Employment Commissionhas the power, rightor authorlty~togrant under Article 5221b-12(j), V. C.~ S., (now Article 5221b-12(j) (l), V. C. 9.) a refund of unemploymentcompensationtaxes as applied for by ConsolidatedSteel Corporation.

As to the circumstancessurroundingthis application for a refund, we quote from your letter as follows:

'"The ConsolidatedSteel Corporation was assessed by this Commission unemplogment compensationtaxes forthe'%yearof 1944 at a rate of 2.7s. The Corporation voluntarilypaid the taxes for the first quarter of this year at the rate of 2.7s. At a later date and during the second quarter of 1944, the Corporationdecided that its rate for 1944 shouldbe 0.5s lnstead of 2.7% and paid its taxes for the second quarter of 1944 at the rate of 2.7$, but under protest, claiming the correct rate at which it should pay its taxes for 1944 was 0.5%. Suoh was likewise. .

*

88 Hon.'

Harry Benge Crosier, Page 2 (v-620)

the procedure It followed for the taxes that accrued during the third and fourth quarters of 1944.
“Suit was Institutedunder Article 7057b for the recovery of. the taxes paid under protest for the second, tI$rd and fourth quarters of 1944, e e D "Consolidated

Steel Corporat'io'n,pr.e- *vailed in the suit brought for the recov- ,, erg of the taxes paid under protest for the second,~

third and fourth quarters of 1944. ‘Nowthe Corporationcomes before this,Commission

and seeks a refund under particle

522ib-l2(,j~.)

of the taxesvoluntarily paid for'the first quarter of 1944 In excess of t'computation at the rate of 0.5%

. *:.;m,

. ., The'~exas'Employment Commission is given the'authority

to !&ke~

refunds by Artlc~e 5221b;l:2 (l), which reads: (j),~

:. “me,e ‘aby,, &&yi&: igit &~;na& a p&m&t to'

th.e .Comviiss,lon~,,'of

contr~ibut$oqq

~., .. alle'ged

to, be due, and Iti'

is J.a%er

determlped that'

'such ,contributions

were' not! due.,. id 'wholeor in'

part, the emp~oy@ig'unit '.:.j ~. :. making such payment. may make ,applic,ation :, to the Commission for an adjustmentthereof..i.n connectionwith contribution.payments then',due‘,

or for a refund thereof. becauh sudh adjustment cannot. be made',.~ :.I :, and if~the Commission shall determine that such contributions,:or penalty,

nor,a,ug

portion: thereof wereerroneously .coQected, the Commission shall allow such, employzng,'

:. unit to make an adj.ustment thereof Without i'uterest

inky connectionwith'.

contribu- : tionpayments then due by such emplogi,ng '~ unit, or,,if such adjustment cannot be, made, the.

Cdinmiss~oh~shall~

refund said ,amount witpout 'interest from the Fund,:

pro-",., vlded that"no applloation foradjustment. or refund 'shall

.ever be.~ consideredby'the Commissionunless the same. shall have been 

### fli& within.~four: (9). ,years ,fromthe'~date

.

. ._. ' <,.: ; 1.: -;,: ~~ . ,!' ,::,,I. ,5' ,',. :' : tEon. Harry Benge Crozier, Page 3'(V-620) 

### 89

on which such contributions or penalties would have become due, had such contributions been legally collectible by the Cornmission from such employingunit. For like cause, and within the same period, adjustment or refund may be so made on the Commission'sown initiative." Unquestionablythis article gives the Commission the authority to make adjustmentsor grant refunds of taxes where it has been determined that such~ taxes have been erroneouslycollected. As to the applicationof this statute, this Court in the case of ~James

v; ConsolidatedSteel Corporation, 19.5 9. W. (2d) 955, refused, R. R. E., held that it -"relates

to errors made either by the contributor or by,the.Commisslon In the calculationor collection of such taxes which have been paid voluntarily."

It has been determinedthat the taxes for which refund is here sought have been erroneously collectedunder the provisionsof the Texas UnemploymentCompensation Act. Rates at which taxes are paid are computed upon a calendaryear basis. Since the Court lnthe,case of James v. ConsolidatedSteel Corporation

held that the rate at which Consolidated shouldhave paid its taxes for the last three quarters of 1944 was .5$, it necessarilyfollows that the rate .atwhich it shouldhave r id its taxes for the first quarter of 1944 was .5 Instead of 2.7s; the rate at which its

paid the taxes for this quarter.
It is apparent from your request'thatCo.nsolidated's

application~for

a refund relates'to taxes voluntarilypaid through,errors of the contributor or the Commission in the calculationor collection thereof.

_.

Based upon the foregoing,it is our opinion that the Texas EmploymentCommission has the ~power, right and authority to grant the refund as applied for by ConsolidatedSteel Corporation.

The delay.in replying to this request has been occasionedby careful study and briefing and the holding of numerous conferences with reference to every phase of this question. As requestedwe are returning the applicationattached to your letter.

### 90 Eon.~HarryBenge Crazier,, Page 4 ,(v~620)

SUMMARY Th T&as'Bmploymelat Cotiis~sio~~~~s the power, 5221b-12(j)

right and authority under Art., (l),,V.C. S., -to

grant a re-, ‘fund of unemploymentcompensation taxes erroneouslypaid.

,
Very truly.yours, .~ ATTORNEY GENERAL OF TEXAS~

Robert 0. Koch Assistant

. .