              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.ouslgin pr6-
                                  vious gears-'cannotset off those
                                  payments against taxes due for the
                                  correct year.
              This is~ln answer to your inquiry in regard to ah ex-
   cess 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@iitthe stores in question were 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 chain but as an individual
      unit.
              "Is this department authorized to credit
       the taxes due by such corporation for a subee-
       quent 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 TtixLaw" (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. Rurt vs. Cooper, 130 Tex.
   433, 110 S.W. (2a) 896.
              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 fur-
    ther duty of the Comptroller to collect, superiilse,
    and enforce the cblle&tlon of all license and.ap-
    pllcation~fees that tig be due under the provisions
    of this Act and to that.end the salKComptroller 1s
    hereby vested with tillof the,,powerand authority
    conferred by this Act . . . .
           "Sec. ~3.    . . If an application is~founa
    to be satisfactoryf 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 copart-
    nership having a license shall Bpply tb the Comp-
    troller of Public Accounts for a renewa; license for
    the calendar year next ensulng. . . . .
           "Sec.5.   . . . The license fees herein pre-
    scribed 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
    herelntibovefixed 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 ac-
    count 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 subse-
quent 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 jurls-
dictions, that a person who has paid excessive taxes erroneotis-
ly in previous years cannot set-off those payments against taxes
    for the current year. the rule is stated in 3 Cooley on
diie-
Taxation, 4th Ed., 2640, par. 1336, as follows:
           ' 1336.~ Unless by express provision of sttitiite
    set-off is not~allowtidin suits for takes. 'So Illegal
    or excessive taxes paid itiprevious yeiirscannot be~set-
    off 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
    nolsthave present command of their current revenues.
    Property holders who have paid, whether voluntarily
    or by coercion, llle al taxes in former years, have
    no right to set off 7by 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 col-
   lector 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 col-
   lected 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 ofiinionthat the rule announced in the fore-
going 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 tiecell 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.-personwho vbliint&rllg;
                                       pegs en illegal tax
    has   no claim for Its repayment.
That stetemefitwas reiterated by the Supreme Court of Texas in
the recent case of~Nationa1 Blscult Coinpenyv. 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 tiineto decide the
question of whether or not the~leglsleture could euthoi+lzeyou
to give crdit for this over-payment-forrefund these taxes~er-
roneously paid. That would involve a construction of Artli9e
VIII., Sectlofi6 of th%Constltutlon-.of Texas. The Ieglsleture
has not yetmade such &uthori.zetiones faties this case Is con-
cerned.
           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
