THEAYTORNEY GENERAL 

OFTEXAS 

GERALD C. MANN 

Honorable George H. Sheppard 

Comptroller. of Public Accounts 

Austtn, Texas 

Dear Sir: Opinion No. 0-2079 

'Re: Persons ~paging excessive chain 

store taxes errone.ouslg in pr6- 

vious gears-'cannot set off those 

payments against taxes due for the 

correct year. 

This is~ln answer to your inquiry in regard to ah excess payment of chain store taxes, which lnqutrg reads in part 

as follows: 

"A corporation (a), either under a mistake 

of law or a mistake of fact, pays Chain Store Tax 

0n.a number of stores. It 1s later determind 

th@iit the stores in question were not a chain and 

that such corpbration ha3 overpaid the amount of 

tax required, ana that.the stores ijaia on are not 

subject to the tax as a chain but as an individual 

unit. 

"Is this department authorized to credit 

the taxes due by such corporation for a subeequent sear with the excessive amount of money 

collected for the prior year?" 

" . . . upon receipt of the moneys paid bg 

the corporation as chain store tax such money was 

cleared through this department and placed in the 

State Treasury In the General Revenue, and sych 

money now rests In the General Revenue Fund. 

"The Chain Store Ttix Law" (House Bill 1.8, 44th Leg., 

First C.S., 1935), codified as Article lllld'of Vernon's Annotated 

Penal Code, provides for the payment of certain license fees for 

the pidvllege of operating stores, a license being required for 

each store. These license fees have been held by the Supreme 

Court of Texas to be occupation taxes. 

433, 110 S.W. (2a) 896. 

Rurt vs. Cooper, 130 Tex. 

The parts of this law with which we are concerned are 

as follows: 
Honorable George H. Sheppard, page 2 O-2079 

"Sec. 2. . . . It Is hereby made the further duty of the Comptroller to collect, superiilse, 

and enforce the cblle&tlon of all license and. appllcation~fees that tig be due under the provisions 

of this Act and to that.end the salKComptroller 1s 

hereby vested with till of the,,power and authority 

conferred by this Act . . . . 

"Sec. ~3. 

to be satisfactoryf 

. . If an application is~founa 

and If the filing and license 

fee as herein prescrlbed.shall have been paid, the 

ComptPolleP of Public Accbunts shall issue to the 

applicant a license for each store or mercantile 

establishment for which an application for a license 

shall have been made. . . . . .' 

"Sec. 4. All licenses shall be so issued as 

to expire on the thirty-first day of December of 

each year. On or before the thirty-first day of 

December of each years, every'person, agent,~redelver, 

trustee, firm, corporatlon,~ association or copartnership having a license shall Bpply tb the Comptroller of Public Accounts for a renewa; license for 

the calendar year next ensulng. . . . . 

"Sec.5. . . . The license fees herein prescribed shall be as follows: (Here Is set out the 

amount of the fees.) 

l, 0 . . Such fees are for the period of twelve 

(12) months, and upon the issuance of any license 

after the first day of ganuary of any one year, there 

shall be collected such fractional part of the license 

herelntibove fixed as the remaining months in the 

calendar year (Inclualng the month in which such 

license i&issued) bears to the twelve month period." 

"Sec. 9. . . . All modes collected by the 

Comptroller of Public Accounts under the provisions 

of this Act shall be pald by him into the State 

Treasury dally as received; one-fourth of same shall 

be credited to the account of the Available School 

Fund and. the remainder shall be credited to the account of the General Fund. . . . ." 

There is no provision in "The Chain Store Tax Law" 

thist. provides that where a person has erroneously paid more 

chain store taxes than was due he should receive credit for this 

excess or erroneous payment when he makes his next oi" a subsequent chain store tax payment. It is significant that there 15 

such a provision In some of the other tax laws of this state, an 
Honorable George H. Sheppard, page 3 O-2079 

example being the gross production 011 tax law (codified as 

Article 7057a of Vernon's Annotated Revised Civil Statutes). 

It is a general rule of law, adhered to In most jurlsdictions, that a person who has paid excessive taxes erroneotisly in previous years cannot set-off those payments against taxes 

diie- for the current year. the rule is stated in 3 Cooley on 

Taxation, 4th Ed., 2640, par. 1336, as follows: 

' 1336.~ Unless by express provision of sttitiite 

set-off is not~allowtid in suits for takes. 'So Illegal 

or excessive taxes paid iti previous yeiirs cannot be~setoff agaInat current tax'aemanas. 'Any agreement between 

tax officers and a taxpayer that a pre-existing claim 

may be set-off against texes is of no eff&t, at least 

where the tax officers have no power to make such an 

agreement." 

In the case of Darby v. City of Vldalla, (Sup. Ct. 

Ga.) 168 Ga. 842, 149 S.E. 223, the court said: 

"'As matter of public policy, founded on the 

exlgancles of government, mnlcipal corporations 

nolst have present command of their current revenues. 

Property holders who have paid, whether voluntarily 

or by coercion, llle al 

no right to set off 7 

taxes in former years, have 

by Injunction or otherwise) such 

payment3 against executions issued for the taxes of 

later years.'" 

In the case of Shelton v. Blount County, (Sup. Ct. 

Ala.) 202 Ala. 620, 81 Sou.,562, the court said: 

"We must presume that the defendant tax collector discharged this duty as prescribed by law, 

and It seems clear that his account for the tax year 

of 1914 was thereby effectually detached from h1s 

accdunt for the ensufng year, and that those accounts 

were in no sense single or continuous. In line with 

this theory, it has b&en held that the takes collected for one year cannot be apulled as e credit on 

the fund due to be accounted for by the tax collector, 

for any other year, but must be paid end credit.& as 

for the year for which they were cbllected. State 

use of Winston County v. Tingle, Tax Collector, 196 

Ala. 505, 71 South, 991. (Underscoring ours,) 

It Is our ofiinion that the rule announced in the foregoing cases controls-'th& answer to your QuestIon. We“have-'been 

unable to find e Texas appellate court case on this same fact 
-. .T . 

Honorable George H. Sheppard, page 4 O-2079 

situation, but we see no reason why Texas shouldnot follow'the 

general rule. 

We are basing this opinion on the foregoing reasons 

aid authoritle's;but tie cell attention to the statement In the 

case of-Austin National Bank v. Sheppard, 123 T&x. 272, 71 S.W. 

2nd 242, as follows: 

"A.-person who vbliint&rllg; pegs en illegal tax 

has no claim for Its repayment. 

That stetemefit was reiterated by the Supreme Court of Texas in 

the recent case of~Nationa1 Blscult Coinpeny v. State, 135 S;W/ 

2nd' 687. 'To the same effect are-the~ca&es'of'City~ofXouston v. 

Felzer; 76 Tex. 365, 13 S.W. 266, end Marion v. Lockhart, 131 

Tex. ,175, 114 S. W. 2nd 216. 

We do not deem It necessary et this tiine to decide the 

question of whether or not the~leglsleture could euthoi+lze you 

to give crdit for this over-payment-for refund these taxes~erroneously paid. That would involve a construction of Artli9e 

VIII., Sectlofi 6 of th%Constltutlon-.of Texas. The Ieglsleture 

has not yetmade such &uthori.zetion es fati es this case Is concerned. 

Our answer to your inquiry Is that you are not 

auttiorlzecl IX'credlt the chain store taxes now owed by'the c‘dT- 

@oration with-the money erroneously paid by the corporation es 

chain store taxes for prior years. 

Yours very truly 

ATTORNEY GENFRAL OF TEXAS 

By s/Cecil C. Rotsch 

Cecil C. Rotsch 

Asslstant 

CCR:ew:wc 

APPROVED MAR 28, 1940 

s/Gerald C. Mann 

ATTORNEY GENERAL OF TEXAS 

Approved Opinion Commlttee By s/BWB Chairman