Honorable Robert S. Calvert Opinion NO. M-140
Comptroller of Public Accounts
Austin, Texas Re: Construction of House Bill
143, Acts of the 60th Legis-
lature, Regular Session,
Chapter 447, and House Bill
144, Acts of the 60th Legis-
lature, Regular Session,
1967, Chapter 446, amending
Title 122A, Taxation General,
as they relate to refunds of
Dear Mr. Calvert: overpayment of taxes.
your request for an opinion poses the following ques-
tion:
"Please advise whether or not the
Comptroller may refund an overpayment
of tax (other than Limited Sales, Ex-
cise and Use Tax) made prior to July
1, 1967, in those instances wherein
the Comptroller,has determined that
such overpayment was through a mis-
take of law or fact."
Article l.llA of Title 122A, Taxation General, as added
by House Bill 143, Acts of the 60th Legislature, Regular Session,
1967, Chapter 447, provides in part:
"When the Comptroller deter-
mines that any person, firm or cor-
poration has through mistake of law
or fact overpaid the amount due the
State on any tax collected or admini-
stered by the Comptroller, the Comp-
troller may refund such overpayment
by warrant on the State Treasury from
any funds appropriated for such pur-
pose."
Paragraph A of Article 1.045, Title 122A, Taxation
General, as added by House Bill 144, Acts of the 60th Legislature,
- 651 -
Honorable Robert S. Calvert, page 2:(M-140)
Regular Session, 1967, Chapter 448 provides:
"Limitation. Except where a shorter
period of time is provided in this Title, the
Comptroller shall assess any tax imposed by
this Title within seven (7) years from the
date such tax is due and payable, and the
Comptroller may bring an action in the courts
of this State, or of any other state, or of
the United States within seven (7) years from
the date such tax is due and payable to col-
lect the amount delinquent together with penal-
ties and interest. No action may be commenced
to collect taxes imposed by this Title after
seven (7) years (or such other shorter period
of time as may be provided in this Title) from
the date such tax is due and payable, provided
that:
"'(1) In the case of a false or fraudu-
lent return with intent to evade the tax; or
returi’(2) In the case of failure to file a
i or
“‘(3) In the case of gross error in in-
formation reported in a return that would in-
crease the amount of tax payable by twenty-
five percent (25%) or more: the tax may be
assessed and collected, or a proceeding in
any court for the collection of such a tax
may be begun without assessment, at any time."'
Paragraph D of Article 1.045 provides:
"'Beginning of Period. The "date
such tax is due and payable" as used
in this Article, for purposes of any
tax imposed by this Title, shall mean
the day after the due date of the tax
payment as prescribed by the Article of
this Title imposing such tax, provided,
however, that with respect to any tax,
other than the Limited Sales, Excise and
Use Tax, required to be paid by this Title
prior to the effective date of this Article,
such term shall mean September 1, 1965.'"
Paragraph G of Article 1.045 provides:
-652, -
Honorable Robert S. Calvert, page 3 (M-140)
"'Limitation for Refunds and Credits.
Notwithstanding any provision of this Title,
the period of time during which the Comp-
troller may refund any overpayment of tax
or issue a credit for overpayment of any .,
tax imposed by this Title shall not expire
prior to the expiration of the period of
time within which the Comptroller may assess
a deficiency with respect to such tax. The
Comptroller shall not issue any such refund
or credit after the time for assessment of
a deficiency has expired unless such tax
was paid under protest and such refund or
credit is made under court order."'
The effective date of House Bill 144, adding Article
1.045, is stated in Section 3 to be July 1, 1967.
Section 44 of Article III of the Constitution of Texas
prohibits the Legislature from granting by appropriation or other-
wise any amount of money out of the Treasury of the State to
any individual on a claim real or pretended when the same shall
not have been provided for by pre-existing law. Both common
law and statutory right constitute pre-existing law within the
meaning of Section 44 of Article III of the Constitution of Texas.
123 Tex. 272, 71 S.W.Zd 242
Sheppard, 125 Tex. 339, 83
Life Insurance Co.,
taxesaid under axis-
take of fact as well as those paid under duress, either express
cr implied, establish a claim against the State for a refund
of such taxes if such payment constitutes either the overpayment
of a legal tax or the payment of an illegal tax. However, taxes
voluntarily paid under a mistake of law and in the absence of
duress, either express or implied, cannot be refunded.
Prior to the enactment of the above quoted Articles,
claims for refund had to be presented to the Claims Committee
of either the House of Representatives or the Senate and appro-
priation made therefor before the Comptroller was authorized
.to issue a warrant. Articles l.llA and 1.045, Title 122A, Taxa-
tion General, now authorize the Comptroller to pass upon the
validity of claims for refunds of taxes and issue warrants in
payment thereof without the necessity of presenting such claims
to the Legislature. Neither Article l.llA nor Article 1.045,
therefore, validates or invalidates any claim for refund of taxes.
Such Articles merely constitute statutory authorization for the
Comptroller to pass upon the validity of claims and issue war-
rants in payment of those claims which are supported by pre-
- 653 -
Honorable Robert S. Calvert, page 4 (M-140)
existing law. In other words, the time elements prescribed in
Article 1.045 are merely limitations prescribing the time with-
in which the Comptroller may’ pass upon such claims and make re-
funds and does not affect in any manner the validity of any claim
for a refund.
You are therefore advised that the Comptroller may,
within the limitation period provided in Article 1.045, refund
an overpayment of those taxes made prior to July 1, 1967, in
those instances wherein the Comptroller has determined that such
payment was made through a mistake of fact or was paid under a
mistake of law under duress, either express or implied, under
the principles of law announced in State ". Connecticut Gen-
-
eral Life Insurance co., supra.
--
SUMMARY
---a---
Articles l.llA and 1.045, Title 122A
Taxation General, now authorize the Comp-
troller, within the limitation period pro-
vided in Article 1.045, to pass upon the..:
validity of claims for refunds of taxes
paid prior to July 1, 1967, and issue
warrants in payment of those claims which
are supported by pre-existing law, viz.
taxes paid under a mistake of fact or
taxes paid under a mistake of law under
duress, either express or implied.
You&very truly,
Prepared by John Reeves
Assistant Attorney General
APPROVED:
OPINION COMMITTEE
Hawthorne Phillips, Chairman
Kerns Taylor, Co-Chairman
W. V. Geppert
W. 0. Shults
Jack Goodman
Arthur Sandlin
A. J. CARUBBI, JR.
Staff Legal Assistant
- 654 -