## THEAYTORNEY GENERAL OFTEXAS
GERALD C. MANN

Honorable George H. Sheppard Comptroller.

of PublicAccounts Austtn, Texas
Dear Sir: OpinionNo. 

### 0-2079 'Re: Persons~pagingexcessive chain store taxes errone.ouslg in pr6- vious gears-'cannot set off those payments against taxes due for the correctyear. This is~ln answer to your inquiry in regard to ah excess payment of chain store taxes,which lnqutrgreads inpart as follows:
"A corporation (a), eitherunder 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 questionwere not a chain and that such corpbration ha3 overpaid the amount of tax required, ana that.the stores ijaiaon are not subject to the tax as a chainbut as an individual unit.
"Is this department authorized to credit the taxes due by such corporation for a subeequent sear with the excessiveamount of money collected for the prior year?"

"
. . . upon receipt of the moneys paid bg the corporationas chain store tax suchmoney 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" (HouseBill 

### 1.8, 44th Leg., First C.S., 

### 1935),codified as Article lllld'ofVernon'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. 

### 433,110S.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 herebymade the further duty of the Comptroller to collect, superiilse, and enforce the cblle&tlon of all license and.appllcation~feesthat tig be due under the provisions of this Act and to that.end the salKComptroller 1s hereby vestedwith tillof the,,power and authority conferredby this Act
. . . .

"Sec.

## ~3. to be satisfactoryf . . If an application is~founa and If the filing and license fee as herein prescrlbed.shallhave been paid, the ComptPolleP of PublicAccbunts 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 shallbe so issued as to expire on the thirty-firstday ofDecember of eachyear. On or before the thirty-firstday of December of each years, every'person,agent,~redelver, trustee, firm, corporatlon,~ association or copartnership having a license shall Bpply tb the Comptroller of PublicAccounts for a renewa; license for the calendaryear next ensulng.

. . . .

"Sec.5.
. . .The license fees hereinprescribed shallbe 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 shallbe collected such fractionalpart of the license herelntibove

fixed as the remainingmonths in the calendaryear (Inclualngthe month in which such license i&issued) bears to the twelve month period."

"Sec.

## 9.

. . .All modes collectedby the Comptroller of PublicAccounts under the provisions of this Act shallbe pald by him into the State Treasurydally as received; one-fourthof same shall be credited to the account of the Available School Fund and.the remainder shallbe credited to the account of the General Fund.

. . . ." There is no provision in "TheChain Store Tax Law" thist. provides that where a person has erroneouslypaid more chain store taxes than was **due** he should receive credit for this excess or erroneouspaymentwhen he makes his next oi" a subsequent chain store tax payment. It is significantthat there 15 such a provision In some of the other tax laws of this state, anHonorable GeorgeH. Sheppard, page 

### 3 O-2079

examplebeing the gross production 011 tax law (codifiedas Article 7057a of Vernon's Annotated Revised Civil Statutes).

It isa general rule of law, adhered to In most jurlsdictions, that a personwho has paid excessive taxes erroneotisly in previous years cannot set-off those payments against taxes diie- for the currentyear. 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. 'SoIllegal or excessive taxes paid iti previous yeiirs

cannot be~setoff agaInat current tax'aemanas. 'Any agreementbetween tax officersand a taxpayer that a pre-existing claim may be set-offagainst texes is of no eff&t, at least where the tax officers have no power to make such an agreement."

In the case ofDarby v. City ofVldalla, (Sup.Ct. Ga.) 168 Ga. 842, 149 S.E. 

### 223,the court said:

"'Asmatter of public policy, founded on the exlgancles of government, mnlcipal corporations nolsthave present command of their current revenues. Property holderswho have paid, whether voluntarily or by coercion, llle al no right to set off 7 taxes in formeryears, 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:

"Wemust presume that the defendant tax collector discharged this **duty** as prescribedby law, and It seems clear that his account for the tax year of 1914 was thereby effectuallydetached from h1s accdunt for the ensufngyear, 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 cannotbe apulled as e credit on the fund due to be accounted for by the tax collector, for any otheryear,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. (Underscoringours,)

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 foregoingreasons aid authoritle's;buttiecell attention to the statement In the case of-AustinNationalBank v. Sheppard, 

### 123T&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 reiteratedby the Supreme Court of Texas in the recent case of~Nationa1Blscult Coinpeny v. State, 135 S;W/ 2nd' 

### 687. 'To the same effectare-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 tiineto decide the question of whether or not the~leglsleturecould 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-.ofTexas. The Ieglsleture has not yetmade such &uthori.zetion es fati

es this case Is concerned. 

### Ouranswer to your inquiry Is that you are not auttiorlzecl

IX'credlt the chain store taxes now owed by'the c‘dT- @orationwith-the money erroneouslypaid 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 CommltteeBy s/BWB Chairman