Untitled Texas Attorney General Opinion ( 1949 )

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
MMC /mwb
ACTING ATTORNEY GENERAL