                                      OMNEY               GENERAL

                                                    XAS

                                   Ac%wrXN     11. -a-EuAe
PRICE  DANIEL
ATTORNEYGENERAL
                                    May 31,    1949


    Hon. Robert S. ca1vert                            Opinion No. V-835
    Comptroller   of Public Accounts
    Austin, Texas                                     Re:    Imposition of penalties
                                                             and interest for non-
                                                             payment of motor fuel
                                                             taxes.

    Dear    Sir:

                   We quote the following    from    your letter   of April   20, 1949:

                  “A distributor   of motor fuel holding a Texas permit
           and operating a refinery in Corpus Christi, Texas, en-
           tered into a long term contract with another licensed dis-
           tributor of Houston, to sell and deliver to them approxi-
           mately 3,780,OOO gallons of motor fuel per month during
           the period of the contract.     Before making any of the de-
           liveries   the Corpus Christi distributor    obtained written
           authority from the Comptroller       to sell motor fuel tax
           free to the Houston distributor,     under the terms of Sec-
           tion 5(a) of . . .(Article  7065b, V. C. S.) as long as such
           motor fuel was purchased for further refining or for ex-
           portation by the purchaser      as authorized by the said Sec-
           tion 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
           in export to the Atlantic Coast Area.     Then during one
           month the Houston distributor     ordered 360,841 gallons
           of motor fuel delivered into a barge for coastwise      ship-
           ment to a Texas port for the purpose of taxable sales in
           intrastate  commerce,    and inasmuch as the sale and de-
           livery was made pursuant to the standing contract under
           which all prior purchases    had been made for the purpose
           of exportation,   the Corpus Christi distributor   invoiced
           the motor fuel without including the tax through error,
           Approximately    four months after the delivery of the mo-
           tor fuel. and before the Comptroller     made its next per-
           iodical audit, the Corpus Christi distributor    detected the
           error, collected the tax from the Houston distributor,
           and remitted the tax at 4 cents per gallon to the Comp-
           troller 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 in penalties
     and interest are involved in the two cases.

          w* * *

            “In view of the fact that in both of the above cases
     the distributors    omitted paying the taxes on the 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
     of law make it mandatory       upon the Comptroller     to pro-
     ceed for collection    of said penalties and interest? ))
     (Citations to statutes in parenthesis    added.)

              The relevant     portion   of Article   7065b-18,   V. C. S., reads
as follows:

            “Provided,  however, that in addition to the penal-
     ties shown, if any distributor    or user does not make
     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 of the amount due; and if not
     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 of ten (10) per cent per annum.”
     (Emphasis     added.)

           This directive is expressed   in clear, unambiguous,   and
positive terms.    If prescribes the results which will flow from non-
compliance   with its requirements.    3 Southerland on Statutory   Con-
struction (3rd Ed. 1943) Sec. 5818j We are of the opinion that it is
clearly mandatory in character.

           When a statute expressly   authorizes   the imposition of a
penalty for failure to pay taxes when due, the general rule is that
if no legal excuse for nonpayment is shown, the taxpayer is subject
to the penalty prescribed   by the statute.   61 C. J. 1488, Taxation,
Sec. 2128.   The fact that the tax.payer thought that he did not owe
the tax, or erroneously   assumed that the property was not taxable
Hon. 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.).      In the Dal-
-Gas      Co. case the defendant company resisted the imposi!tion of
the tax both by asserting   the invalidity of the taxing statute and by
denying that it came within its terms.     The court sustained the vai.
lidity of the statute, held that its terms were applicable to the com-
pany, and further held that the trial court had erred in refusing to
include in the judgment 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 associa-
    tion, or any receiver   or receivers, failing to pay any
    tax for thirty days’from   the date when said tax is re-
    quired by this chapter to be paid, shall forfeit and pay
    to the state of Texas a penalty of ten per cent. upon the
    amount of such tax.’

          “Article  7388 also orovides for the recovery    of
    such penalty in a suit brought by the Attorney General.
     The fact that appellant acted in good faith, or did not
    think it owed the tax, does not relieve it from 1iabiKty
    for the penalty, it it in fact did not pay the taxes due by
    it to the state wtthm the 30 days prescribed     by law.
    Under the undisputed facts in the case, it appellant was
    due the amount sued for by the state as delinquent taxes,
    the statutory penalty had accrued, and the judgment
    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 in-
volved.  In the absence of such authorization  the Comptroller  cannot
waive or reduce the stated statutory amount.    34 Tex. Jur. 439, 440,
Public Officers,  Sections 66, 67.

          Our holding in this matter is in accord with Letter Opinion
R-1332 of this office which held that the Secretary     of State had no
authority to waive, compromise,    or reduce the penalties imposed
for noncompliance    with Articles 7089 (prescribingthe     time for fil-
ing corporate reports) and 7090, V. C. S. (prescribing      date for pay-
ment of franchise   taxes).
                                                                      J   ,




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




                             SUMMARY

           The Comptroller has no authority to waive or reduce
    the statutory amount of penalties 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




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                        ACTING     ATTORNEY          GENERAL
