Honorable Robert 9. Calved                opinion No. C- 29
Comptroller of Fubllo Aooounts
Capitol St at ton                         Re:   Whether taxpayers may
Austin, Texas                                   pay taxes accruing un-
                                                der the Limited Sales,
                                                ExOlse and Use Tax Act
                                                under protest purwant
                                                to the provisiona    of
                                                Arttiole 1.05, Title
                                                322A, 20A Tax.-Qen.
                                                arId At’tloit 7057b,
                                                Tltlt 122, 20, V.A.T.S.,
                                                or mustfollow the pro-,
                                                oedurt preaoFlbed in
                                                p&ole 20.10, Title
Dear Mr. Calverrtc                                  .
        We quote the foWw%ng axotrpt  &om your lettier re-
questing our opinion cn the above captloncd eubjeot:
                "The tW.ta~    $a3ea   ltxoise and Uee
          Tax Aat" ln ArtlcLe   26.10, provides the
          speoiflo    proowluma to Be tolLowed when
          requsetfng a remna of tree pata ta’the,
          Comptrcller undbr that Act. That Artl-
          010 al80 provides thth spaoiflo methods
          by which 8; taxpayer  inar bring aotlcn
          against t,he Ooaptmlli~ for the mtnwn
          ana, rrfuntl of tione pa,4 under the
          Ltilttd    SaWa Tut, 3;ob,
                “Stveral taxvayem havt paid      tht
          Liaited    &ltS               $PCteBt
                              %hX 'UlldtS'   ’ in
          aocordanoe with the term at Article
          1.05, Title lMA, an4 Artiole 7057b,
          Title 1e2 md have faiita to f01L0u
          glgrooe6uree   mt cut $81Artiole
             . .
              “Doe6 the taxpayerheve the right’
          to pay hie S&lea,,TaX12ablllty ‘under
          proteetl?   Is thd Comptroller justi-
          fied In dtpositing such Panda aa are
          paid Wdtr probsrst’ ti the general
.




    Honorable Robert S. Calvert,     Page 2             Opinion No. C- 29


               revenue fund without waiting for the
               lapse of the statutory ninety days?”
            Article 1.05, Title 122A, Ch. 1, 20A, Taxatlon-General,
    Vernonts Annotated Texas Statutes, Is derived from Acts 1933,
    43x-dLeg., Ch. 214, p. 637, end Acts 1939, 46th Leg., p. 643.
    Article 1.05 is, In fact, Identical with Article 7057b. Title
    122, Ch. 1, 20, V.A.T.S., except that certain seotlone have
    been renumbered, a few words omitted, and Section 5 (granting
    extensions to prior taxpayers), Section 6 (extending the pro-
    visions of the act to taxes theretofore  paid under protest),
    Section 7 (providing that the law shall be cumulative of all
    laws relating to the payment of taxes and fees of undetermined
    status) and Section 8 (providing a severability  clause) have
    been entirely omitted.
            Both of these Articles    contain the following     provl-
    elan:
                    “Any person, firm or corporatlon~ who
               may be required to pay to the head of
               any department of the State Government
               any oooupatlon, gross receipt,      franchise,
               license or other privilege     tax or fee,
               and who believes or contends that~ the
               same lb imlawful and that such public
               offlolal   Is not lawfully entitled to
               demand or collect    the same. shall,
               nevertheleae, be required to pay such
               amount   86 such pub110 olflolal    charged
               ulth the collection    thereof may deem
               to be due the State, an@ shall be en-
               titled to aooompany suoh payment with
               a written plVotest, setting out fully
               and ln detail ‘each and every ground
               or reason why it is contended that
               such demand is unlawful or unauthorized.”
            Both provide that after suoh protested payment, the
    taxpayer has ninety days from the date of such payment to
    file suit In Travis County against the public offlolal
    oharged with the duty of collecting     such taxes or fees, the
    State Treasurer and the Attorney General.       The issues to be
    determined In such suits are limited to those raised In the
    written  protest.   Detalled.provlslons   ares made with regard
    to these suite.
            Both ArtloleB require that the taxes be held In a
    eimpense account with the State Treasurer and provlde that if
    suit is nat brought wlthin the time and manner provided, or
Honorable Robert S. Calvcrt, Page 3                 Oplnlon No. c- 29


In the event that It be finally determined In any such suit
~that the protested payment or any portion thereof, together
with the pro ,rata interest earned thereon, if any, belong8
to the State, then the State Treasurer shall transfer such
money from the suapense account to the proper fund In the
State Treasury.    In the event the taxpayer IS successful In
hle suit, the,State Treasurer must then refund the amount of
the protested payment, together with the pro rata interest
earned thereon, if any.
         Article 20.10, as amended Acts 1961, 57th Leg., 1st
C.S., Ch. 24, Article I, Sec. 1, p. 71, contains specific
provisions with regard to overpayments and refunds of taxes
collected under the Limited Sales, Excise and Use Tax Aat,
commonly known as the Texas Sales Tax Act.
       We quote the following   excerpt from Article    20.10:

          ,,,;!$,d~e”c;~;~t~d        ;;$$essI~~t
          Comptroller determines that aiy amount,
          penalty or Interest haa been paid more
          than once or has been erroneously or
          Illegally     colleoted or computed, the
          ComptrolJer shall set forth that fact
          In his records, and the excess amount
          collected     or paid may be credited on
          any amount then due and payable from
          the person under thla Chapter. Any
          balance may be refunded to the person
          by whomit was paid, or his succeasor.s,
          administrators or executors.
          Lti3~B~lo~lalms ‘#or Refund, Credit :
                     .
                “(1)   No refund shall be allowed
                       unless a claim therefor is
                       filed with the Comptroller
                       by the person who overpaid
                       the tax or his attorney,
                       assignee, executor, or admln-
                       letrator, within three (3)
                       yearn from the lrst day of the
                       month following the close of
                       the quarterly~perlod  for whlah
                       the ovdrpagrmdhtwas made or
                       within elx (6~ mmtha afier
                       any deterniinaii
                                      ion becomes
                       final under p~nsraph (A)
.   .




    Honorable Robert S. Calvert,       Page 4              Opinion No. C-   29


                               through (0) of Article  20.06
                               or within alx (6) month9 from
                               the date of overpayment with
                               reapeot to euch determinations,
                               whichever of these three (3)
                               periods expire8 the later.

                        “(2)   No credit shall be allowed after
                               the expiration of the period speak-
                               fled for flllng claims for refund
                               unless a claim for credit Is filed
                               with the Camptroller within such
                               period, or unlees the credit relates
                               to a period for whioh a waiver la
                               given pursuant to paragraph (D)
                               under Artlale 20.06.
                  “(C) Credit or Refund for Uee Tax; Relm-
              buraement of Retailer for Limited Sales Tax.
              No credit or refurid of any amount aid pur-
              suant to paragraphs (A) through (LP of Arti-
              cle. 20.03 shall be allowed on the ground that
              the storege, use or other ocneumptlon of the
              tangible personal property Is exempted under
              Artlale 20.04 unlese the person who paid the
              amount ~eimbursee hle retailer  fOI, the amount
              of the llmlted sales tax Imposed upon his
              vendor wlth respect to the. Bale of the tan-
              gible personal property and paid by the ven-
              dor $0 the State.
                  “(D) Claim for Refund, Credit:  Form:           :
              Contents.   Every ala&n shall be in writing
              and a&all etate the specific  ground8 upon
              which the claim If founded.
              Wal;!E) Effect of Failure t6 File Claim:
                        Failure to file a claim within the
              time pieecrlbed in paragraph (B) of this
              Article conatitutees a waiver of any demand
              agalnet the State on aaoount of overpayment.
              ser;iF!   Notice of Disallowance of Claim:
                          Within thirty (39) days after
              dlsallok.ng   any olaim in whole or ln part,
              the Comptroller shall serve notice of his
              action on the cla%mant In the manner pre-
              scribed for servlae of notice of a defl-
              c lency determlnat ion. ‘1
.+   .   .   .
                                                 .




     Honorable Robert 9. Calvert,    Page 5                Opinion No. C-   29



              Section (Ii) provides that no suit or proceeding may be
     maintained for recovery of any tax allegedly Illegally       col-
     lected unless a claim for a refund has been du3y filed.        Wlth-
     In ninety days after the mailing of the Comptroller's notice
     rejecting a claim filed pursuant "to this Chapter", the
     claimant must bring an action in a court of competent jurls-
     dlctlon In Travis County, Texas, against the Comptroller on
     the grounds set forth ln the claim, or he will be deemed to
     have waived his claim.      The claimant may also file suit If
     the Comptroller falls to act on a claim within six months
     after Its filing.     The act provides that If judgment Is ren-
     dered for the plaintiff,     It shall be granted as follows:
                       "(a) If the judgment Is for a re-
                 fund of taxes, 1t:shall be credited
                 on any limited sales or use tax or
                 amount of use tax due from the plaln-
                 tiff.
                     "(b) If the judgment la for a re-
                 fund of use taxes, It shall be credited
                 on any use tax or amount of use tax due
                 from the plaintiff underthis  Chapter.
                "(2)  The balance of the judgment shall
             be refunded to the pl&lntlff."
             Provision   Is made for payment of Interest    at,the
                                                              rate of
     6s per annumupon amounts found to have been Illegally   col-
     lected from the date of payment to the date of allowance o?
     aredlt, or to a date preceding the date of the refund warrant
     but not more than thirty days, the date to be determined by
     the Comptroller.  Further apeclflc provlslons are made for
     the recovery of erroneous refunds.
             It la evident that Article 20.10 has created a special
     method for the taxpayers I recovery    of sales taxes, which they
     deem to have been Illegally   collected,   and that this Article
     constitutes,  ln effect,  an exception to Articles 7057b and
     1.05. We think that this fact Is clear evidence of the legle-
     latlve intent that the epecfflc provisions embodied In Artl-
     cle 20.10 constitute an exclusive remedy and must be followed
     by taxpayers requesting a refund of taxes paid under the
     Sale8 Tax Act.
             We pass to a consideration of what action the Comptroller
     should take with regard to such funds a8 have been paid under
     Articles 7057b and 1.05 and are presently being held In the
     suspense account.

                                    -125-
         _.   .




              Honorable Robert S. Calvert,       Page 6             Opinion No. C- 29


                         Artlale   20.13 reads as follows:
                                “All fees, taxes, Interest and penal-
                            ties imposed, and all amounts of tax re-
                            quired to be paid to the State under’thla
                            Chapter shall be paid to the Comptroller
                            in the form of remlttanoes payable to
                            the Comptroller of Public Accounts of
                            Texas. The Comptroller shall remit all
                            fees, taxes, interest and penalties
                            colleated under this Chapter to the
                            State Treasurer to the depoalted In the
                            State Treasury to the credit of the
                            General Revenue Pund. Amended Acts 1961,
                                                  p. 71, ch, 24,

                  In view of this express pravlston of the Sales Tax Act, the
                  funds which are being held In the suepenae account should be
                  transferred to the Qeneral Revenue Fund. In the State Treasury.
                          We pass now to a ConsideratSon of the proper disposition
                  of the funds 80 traneferred.    Senate Bill  NO. 1, Chapter 62,
                  p.  203, Acts 57th Leg., First Called Seeslon (196x),being the
                  Qaneral Appropriation Bill, contains, at pages 271 and 272,
                  the appropriations. for the Comptroller of Public Accounts for
                  the years ending August 31, 1962 and August 31, 1963. The
                  appropriation   of Line Items 8 and 9 was made contingent upon
                  the enactment of House Bill 20, 57th Leg., 1st C.S. House
                  Bill 20 provides for the Limited Sales, Excise and Use Tax, for
                  Its administration and enforcement, and allocates    the revenues
                  derived therefrom.    The unexpended balances In Line Items 6
                  end 9, es of August 31, 1962, are reappropriated for the year
                  beginnlng Septembw 1 1962 with the approval of the Governor.
                  Methods of flnanoing items 8 and 9 are provided.     We quote
                  the following exoerpt from page 272:
                                 “Ae much of the respeatlve taxes
                            :oollected and administered   by the Coarip-
                            troller a8 map be necessary    la hereby
.*                          appropriated and set asldf? to pay re-
                            funds as provided by law.
                            Should the Comptroller determine that any of the funds In
                  question have been erroneously or Illegally     collected,  he Is
                  authorized under the provisions     of Artlole 20.10 (A) to set
                  forth that faot in his reoorda and credit the excess amount
                  ealIect.ed on any amount then due and payable from the taxpayer.
                  Any balance may be refUndet¶ to the taxpayer, his successors,
                  admlnletrators or executors.     The statute thus specifically
     i            authorizes refunds in suoh cases and an appropriation      has been
                  made therefor.

                                                -126
                                                                                  .     .
                                       .
                                                                                            &A
Honorable Robert 9. Calvert,    Page 7              Opinion No. C- 29


        As to funds which the Comptroller deems legally col-
lected, he may treat protested payments as a "claim" within
the meaning of Section (D) of Article 20.10 If the protests
are In writing and state the specific grounds upon which the
protests are founded. However, thereafter,   the procedural
steps provided by Article 20.10 muat be followed by the
taxpayers and the Comptroller.
                                                                        . ~.

                     SIJMMARY

               Article 20.10,,Tltle 122A, MA, Tax.-
       Gen., V.A.T.S., has provided an exclusive reme-
       dy which must be followed by taxpayers seeking
       to recover sales taxes which they claim have
       been Illegally   collected.  Such funds as have
       been paid under protest pursuant to Articles
       1.05 and 7057b, V.A.T.S., may be treated by
       the Comptroller a8 a "Claim" within the pro-
       visions of Section (D) of Article 20.10 if
       the protests are In writing and state the
       specific   grounds upon which the protests are
       founded. Thereafter, except as to funds which
       the Comptroller may deem illegally   collected
       and which could be credited or refunded as
       provided by Article 20.10, the procedural steps
       provided by Article 20.10 must be followed by
       both the Comptroller and the taxpayera.
                                Yours very truly,
                                WAGGONER CARR
                                Attorney General of Texas




 W/jP                          Asslatant Att
 APPROVED:
 OPINIONCOMMITTEE:
 W. V. Geppert, Chairman
 J. C. Davis
 Mary K. Wall
 Ii. Grady Chandler
'APPROVED  FORTHEATTORNEYGENERAL
 By: Stanton Stone
