Honorable Ro’aert S. Calvert
Canptr .;ller of Public Accounts Opinion No. WW-1169
Capitol Station
Austin 11, Texas Re: Whether the Compkoller has the
authority to make refunds from
the Suspense Account to certain
persons who paid taxes under the
provisions of the unconstiktional
“Severance Beneficiary Gas Tax
Act” under the various fact
situations stated.
Dear Mr. Calvert:
By recent letter you have posed certain questions regarding refund
of protested tax payments under the unconstilutional Severance Beneficiary
Gas Tax Act (Article 22,Ol et seq., Title 122A, Taxation-General, Revised
Civil Statutes of Texas). You advise that the tax payments were deposited
to the suspense amount as “protested items” in conformance with the ,pro-
test statute (Article, 1.05, Title 122A, Taxation-General, Revised Civil
Statutes of Texas, formerly 705713, V.C,S.). You describe four different
factual sieuations pertaining to the protested payments; we quote from your
letter:
ill “American Smelting and Refining Company, and
others, properly instituted stiit within uinety (90)
days after date of the protested payments, however
as to some subsequent amendments of the suit the
Attorney General ~rrised by a special exception the
isaue that tke amendmenta had not been properly
made, rince they song@ to incorporate by reference
certain allegations of the original petitions and of
prior amendments., After thC Severance Beneficiary
Tax was declared uacon&titutional, American
Honorable Robert S. Calvert, page 2 lww-1169)
Smelting and Refining Company, and the others dis-
missed their law suits, relying on Attorney General
Opinion No. S-130, dated June 25, 1954, and requested
me to refund these moneys by virtue of the provi-
sions of Article 4388, Revised Civil Statutes of Texas.
All the moneys paid under protest have remained in
the suspense account.
[21 “A slightly different set of facts is involved with
respect to some of the money paid under protest. In
these cases, the moneys paid under protest were and
are still held in suspense, and the suits were timely
filed,but the Attorney General filed special exceptions
to the petitions and amended petitions, taking the posi-
tion that suit was not filed in the court in Travis
County having jurisdiction of the amount involved.
These cases, too, were dismissed and the taxpayers
have requested me to refund, under the provisions of
Article 4368, their moneys held in suspense.
“Under the above stated facts, I will appreciate
it if you will advise me whether or not I can legally
make the refunds from the suspense account.
“If your answer to the above question is in the
affirmative, I will appreciate your opinion based on the
following facts.
[31 “The taxpayer paid the tax under protest and the
moneys were placed in the suspense account by me, as
required by the protest statute. The petitions and
amended petitions were timely filed, however, several
of the amended petitions refer to a lesser amount of tax
than was actually paid under protest. The taxpayer has
accepted judgment based on the amount of tax included
in his suit and the amended petitions. Please advise me
whether or not I have the authority to refund the amount
of tax not included in the amended petitions and which
is still in the suspense account.
[41 “A taxpayer paid the tax under protest and the
Honorable Robert S. Calvert; page 3 (WW-U69)
money placed by me in the suspense account, as re-
quired by the protest statute. The suits were timely
filed but one or more of the amended petitions were
not filed within ninety (90) days from date of pay-
ment of some of the tax induded in the amended peti-
tions. The taxpayer has accepted judgment after ex-
cluding the amounts in which amended petitions were
filed after ninety (90) days from date of payment of
the tax. The amounts excluded are still in the sus-
pense account.
“Please advise me whether or not I have authority
to refund these amounts to the taxpayer.”
Article 4388 provides in pertinent part:
“The State Treasurer shall receive daily from
the head of each Department, each of whom is
specifically charged with the duty of making same
daily, a detailed list of all persons remitting,money
the status of which is undetermined or which is
awaiting the time when it can finally be taken into
the Treasury, together with the actual remittances
which the Treasurer shall cash and place in hiti
vaults or in legally authorized depository banks, if
the necessity arises . . . . A deposit receipt shall
be issued by the Comptroller fo? the daily total of
suchremittances from each Department; and the
Cashier of the Treasurer’s Department shall keep
a cashbook to be called ‘Suspense Cash Book, ’
in which to enter these deposit ,receipts, and any
others issued for cash received for which no deposit
warrants can be issued or when their,issuance is
delayed. As soon as the status of money so placed
with the Treasurer on a Deposit Receipt is deter-
mined, it shall be transferred from the Suspense
Account by placing the portion of it belonging to the
State in the Treasury by the issuance of a Deposit
Warrant, and the part found not to belong to the
State shall be refunded. , . . ” (Empha~sis supplied).
. .
Honorable Robert S. Calvert, page 4 (WW-1169)
In regard to Article 4388, the Court in Daniel v. Richcreek,
118 S.W.Zd 935 (Civ. App., 1938) stated at page s
“The Article is explicit in requiring the ‘trans-
fer’ to be made ‘as soon as’ which necessarily implies
‘not before’ the ‘status’ of the money is ‘determined.’
Clearly the word ‘status’ includes every essential fact
to its proper disposition, from the viewpoint of the Treasurer,
its then custodian. If it should belong to the State, it must
be deposited in the Treasury by means of a ‘Deposit
Warrant.’ If it does not belong to the State, it must be ‘re-
funded’ by means of a ‘refund warrant.’ Ascertainment
of the ‘status’ of the money involves determination of the
proper payee of such ‘Refund Warrant.’ Ordinarily ‘re-
fund’ means to pay back, thus implying that the payment is
to be made to the party from whom received. Such party
was the Racing Commission, concededly now defunct. In-
dependently of this fact, we think, contexually, the pres-
cribed ‘refund’ means to the palty legally entitled to
demand and receive it from the Treasurer.” (Emphasis
supplied).
Attorney General’s Opinion No. V-143 had the following to say with re-
gard to Article 4388 and the Richcreek case:
“We think a proper construction of the foregoing
provision of Article 4388, as to the meaning of ‘the
status of the money’ is whether it is State money or
subject to be refunded, as it should be if it does not
belong to the State. We believe a careful examination
of Daniel v. Richcreek, 118 S.W.2d 936 [sic] (Austin
C.C.A.) confirms this construction.” (Emphasis
supplied).
Attorney General’s Opinion No. V-1204 held that money held in suspense
may be refunded under Article 4388 although not actually paid under protest,
if such money was paid under compulsion or duress.
Attorney General’s Opinion No. WW-277 held that if the Comptroller
should determine that a decedent had been domiciled in California rather,
. .
Honorable Robert S. Calvert, page 5 (WW-1169)
than in Texas, inheritance taxes collected by The State of Texas should be
refunded under the provirions of Article 4388, although such taxes appar-
ently were not paid under protest,
Opinion No. S-~130, rendered by this office on June 25, 1954, furnishes
direct authority for an affirmative answer to the questions here presented.
The question there posed was whether a taxpayer initially pursuing his
remedy under Article ,7057b, VXS., could abandon such a suit and seek to
have tax payments refunded by virtue of Article 4388, V.C.S. In holding
that the Comptroller should make refund of such tax payments, the Opinion
stated:
“There exirta only one ‘Suspense Account’ ad-
ministered by the Treasury ,Department. Tax funds
are depodted into this account for one of two reasons:
(1) either the funds were paid under the protest statute
and are required by law to b,e placed in suspense, or
(2) the head of the collecting department cannot deter-
mine the status of funds paid without protest to the State.
“Article ~4388 pe~rmite ‘State departments to deposit
collected moneys of undetermined status into the Sus-
pense Account, Upon the determination of the status of
these moneys by the department head, the portion be-
longing to the State is deposited into the Treasury and
the balance is refunded to the proper party.”
From the facts set forth inyour letter, it appears that all tax pay-
ments described (1) are held in suspense, (2) were involuntarily paid
and (3) do not belong to the State. Therefore, in view of the foregoing
authorities, you are advised that you are not only authorized, but are ob-
ligated to make refunds of such moneys from the Suspense Account to the
parties legally entitled thereto.
SUMMARY
Under the authority of Article 4388, V.C.S., the
Comptroller of Public Accounts must refund
moneys paid under the unconstitutional “Sever-
ance Beneficiary Gas Tax Act” and held in the
.
Honorable Rdbert S. Calvert, page’ 6 (WW-1169)
Suspense Account to the partiee legally entitled
thereto.
,Youks very truly,
WILL WILSON
ATTORNEY GENERAL OF TEXAS
’ JACK N. PRICE
Aeeistant Attorney General
JNP:nb
APPROVED:’
‘OPINION COMMITTEE
W. V. Geppert, Chairman
~Arthur Sandlin
John Reeves
W. Ray Scrugge
Grady Chandler
REVIEWED FOR THE ATTORNEY GENERAL
BY: Houghton Brownlee, Jr.