Untitled Texas Attorney General Opinion

QBfficeof tiy ~ttotnep General &date of aexae DAN MORALES July 12, 1993 ATTORSEY GESERAL Honorable Luis V. Saenz OpinionNo. DM-235 Cameron county District Attorney Cameron County Courthouse Re: Whether a delinquent tax penalty 914 East Harrison Street adopted by the Cameron County Brownsville.Texas 78520 CommissionersCourt under section 33.07 of the Tax Code applies to delinquent taxes subject to insklbnent agreements entered into under section 33.02 of the Tax Code prior to July 1 of the year in which the taxes became delinquent (RQ-528) Dear Mr. Saenz: On behalf of the Tax Assessor-Collector of Cameron County (the “tax assessor- cokctor). you ask whether a delinquent tax penalty adopted by the Cameron County CkxnmissionersCourt under section 33.07 of the Tax Code applies to delinquent taxes subject to instaUmentrgreanents entered into under section 33.02 of the Tax Code prior to July 1 of the year in which the taxes became delinquent. Subsection (c) of section 6.30 of the Tax Code au&or&s the goveming body of a taxing tit to contract with any competent attorney to represent the tmit to enforce the collection of delinquent taxes. Section 33.07 authotizes a taxing unit to provide that tsxeJthat~delinquentonJuly1oftheyecrrinwhichthey become delinquent incur an additional penalty to d&y costs of CdlWtiO~ifthCUIlit... bas cmtracted wlth an attorney pmuant to Section 6.30 of this code. The amount of the penalty may not exceed 15 percent of the amount of taxes, penalty and interest due. You inform us that the Cameron County Commissioners CoUn has entered into an agreement with a law firm to collect delinquenttaxes in accordance with section 6.30, and has passed a resolution providing for a 15 percent penslty on taxes that remain delinquent on July 1 of the year in which they become delinquent pursuant to section 33.07. YOU state that “[t]he compensation under the contract with the kw fbm is the 15% penalty ~lecl by Section 33.07 and required by the CommissionersCourt.” You ask whether p. 1217 Honomb~eLuis V. Saenz - Page 2 (D&235) ~Sl~pacmtpenaltymayberawwArgaiaPtataxpclyawhohrr~~intom indbwnt apeanent with the taxing unit under section 33.02 prior to July 1 of the year inwhichtbetaxesbecmcdelinquent.’ Section 33.02, which authorizes the cokctor for a taxing unit to mta an agmeant with a person for the payment of delinquent taxes, penalties, and imerest in imtallments, provides in pertknt part: (a) The collector fbr a taxing unit that cokts its own taxes mayenteranagreementwithapersonde&nquentinthepayomtof thelax,pendtieqandinterestininlrtalhnentr. Theagmemmtmust kiawriting~~ynotadmdforapaiodofmorrthan36 months. (b) Interest awrues as provided by Subsection (c) of Section 33.01ofthiswdeontheunpaidbalanceduringthepcriodofthe Igncment. (c) A property OWIEI’S execution of an b~al&nt agreement under this section is an irmwcable admissionof liabiity for all tax- penalties, and interest that are subject to the agreement. (d) Propatymaynotbeseitedmd~ldMdaarit~ynotbe 81ed to collect a delinquent tax subject to an bstalknt agreement2 lldeoEthCp~owner: (1) 5ilstomakeapaymentasrquiredbythergrramm; (2)failstopayotherpropertytaxesc4Alectedbytheunit whendueasmquiredbythe4kcto~or p. 1218 Honorable Luis V. Saenz - Page 3 (DM-235) (3) breaches any other condition of the agreement, . . Tax Code 0 33.02(a) - (d) (footnote added). The comptrolkr interprets section 33.02 to allow a delinquenttaxpayer who enters into an insmllmentagreement to avoid the imposition of titrther penalties. A letter to the tax assessor-wllector from the office of the comptroller states in pertinent part: Subsection (b) [of section 33.021 provides that interest accrues on the unpaid balance-the subsection does not provide for penalties to accrueonthatbalance.. . . We have wnsistently interpreted Section 33.02(b) to allow a taxpayer to stop . the imposition of penalties on delinquent taxes by enteting mto an insmlhnent agreement. Throughout the Tax Code, the Legislature specifies “interest”when it means interest and “penalties”when it means penalties. Further, we think the clear intent of Section 33.02 was to allow a taxpayer to formally agree to pay delinquent taxes and avoid the imposition of further penalties or a suit to wllect taxes-a taxpayer would have little or no incentive to enter into an insmlhnent agreement if penalties wntinued to accrue or he wuld still be sued for wlkction. Uaderourimezpraation,atwpc?yacwldnotbe~leforthe 15 percent additionalpenalty ifhe entered into the instaumentagrmment before July 1. Section 33.02 does not permit penshies to accrue after the agreement is made and Section 33.07 does not permit the 15 percentadditionalpenaltytoattachuntUJuly1. Thishssbeenour wnsistent administrativewnstruction of the law. Letter to Antonio Yzaguirre, Jr., Tw Assessor-Collector, Cameron County, from Ray Bonilla, General Counsel, Comptroller of Public Accounts, dated April 16, 1993 (emphasis in the originsl). You disagree with the wmptroller’s wnchrsion. You contend that the phrase “taxes that remain delinquent on July 1 of the year in which they bewme delinquent incur an additional penalty” in section 33.07 refers to delinquent taxes subject to an installment agreement. You base your contention on that fan that section 31.02(a), the provision which establishes the date upon which tsxes become delinquent, sets forth cettain exceptions, namely taxes paid under sections 31.02(b), 31.03 and 31.04, but does not except taxes subject to an installmentagreement under section 33.02. We wncur with the wmptroUer’sinterpretation of section 33.02, and tind your contention unpemuasive. p. 1219 Honomble LadsV. Saenz - Page 4 (DM-235) Fbst, we agree with the wmptrokr that it ia dkpoMve that section 33.02 acprrsslyprovidesthatimaenwntimreoto~eontheunpaidbalaaccbutdoesnot dmitrlyprovidethatpwelti~wiUwn&etoiccrw. Again,subaection(b)ofsection 33.02 statesthat “[i]nrcrr.rraccruesasprovidedby Subsection (c) of Section33.01 of this wdeonthetmpaidbalancedtuingthepekdoftheylrrsment: (Emphasisadded.) Subsection (b) does not provide that penalffes will wntinue to be imposed. Significantly, rcction33.01ppovidertorbathtbercaurlofintaat~theimporitiw0fpeaaltia. %bsection (a) of section 33.01, for example,provides: Adelitquenttaxincucsrpenaltyofsixpercentoftheamountof the~forthe~crladumonShitirdelinqucntpl~onepaccllt foreachdditionalmonthorportionofamonththetaxrem8ins unpaid prior to July 1 of the yeu in which it bewmes delinquent. However,ataxdeUtquentonJuly1incursatotalpenaltyoftwelve percentoftbeamountoftbede&nquenttaxwitbout~tothe mmberoftnontbsthetahasbeatdeUnquent. In~~webclim~itisinsieaificMtthlltpeaiw31.02(a)doesnotaccept instdment agreements. Section 31.02(a) establishes the date upon which taxes become delinquent. It does not impose pen&k, nor do the provisions it excepts.) The imposition of penalties is speciiically lddrrsred in sections 33.01.33.02, end 33.07. We w~withthecomprrolldsw~onthat~provirionsdoaot~aturingunit to imposea penaltyadoptedpursunt to section33.07 on a taxpayerwi20hasenteredinto p. 1220 HonorableLuisV. Saenz - Page 5 W-235) mstabat agreemmt under section 33.02 prior to July 1 of the year in which the mes ikatne delinquent.’ SUMMARY A delinquenttax penalty adopted under section 33.07 of the Tax Code does not apply to delinquent taxes subject to &aliment agramam entered into under section 33.02 of the Tax Code prior toJuly1oftheyeuinwhichthetucesbecMledelinqumt. DAN MORALES Attorney Oeneral of Texas WJLL PRYOR FitSthSiStMtAttorlICyGenenl MARYKELLER Deputy Attomey Oend for Litigation RENBAHICK!J State Solicitor MADELEINE B. JOHNSON Chair, Opiion Committee PreprredbyMaryR(-- Assistmt Attorney Ckaaal p. 1221