A-99385, DECEMBER 3, 1938, 18 COMP. GEN. 493

A-99385: Dec 3, 1938

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FROM THE ASSISTANT COMPTROLLER OF YOUR ADMINISTRATION IS AS FOLLOWS: REFERENCE IS MADE TO BUREAU VOUCHER NO. 1331 (D.O. BUREAU VOUCHER NO. 1331 WAS SUBMITTED TO YOUR OFFICE WITH MY LETTER OF AUGUST 29. SUBSEQUENTLY PAYMENT WAS MADE BY CHECK DATED SEPTEMBER 13. THIS OFFICE WAS UNDER THE IMPRESSION THAT THE 1936 AND 1937 TAXES AS SET FORTH ON THE VOUCHER REPRESENTED THE BASIC AMOUNT OF THE TAXES AND DID NOT INCLUDE INTEREST OR PENALTIES. SUBMITTED HEREWITH FOR PREAUDIT IS BUREAU VOUCHER NO. 3319. IT IS THE VIEW OF THIS OFFICE THAT NO INTEREST OR PENALTIES CAN BE CHARGED AGAINST THE UNITED STATES FOR ANY PERIOD SUBSEQUENT TO THE DATE THAT TITLE TO THE PROPERTY IN QUESTION IS VESTED IN THE UNITED STATES.

A-99385, DECEMBER 3, 1938, 18 COMP. GEN. 493

REAL ESTATE - ACQUISITION - GOVERNMENT TAX, INTEREST, ETC., LIABILITY THE RIGHT OF A STATE TO THE PAYMENT OF TAXES, INTEREST, OR PENALTY ACCRUING ON PRIVATE PROPERTY PRIOR TO THE DATE THE TITLE PASSES TO THE UNITED STATES BECOMES FIXED AS OF THAT DATE, AND NO INTEREST OR OTHER PENALTY MAY BE ASSESSED AGAINST THE UNITED STATES ON THE PROPERTY ON OR AFTER THAT TIME.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE GOVERNOR, FARM CREDIT ADMINISTRATION, DECEMBER 3, 938:

LETTER DATED OCTOBER 31, 1938, FROM THE ASSISTANT COMPTROLLER OF YOUR ADMINISTRATION IS AS FOLLOWS:

REFERENCE IS MADE TO BUREAU VOUCHER NO. 1331 (D.O. VOUCHER NO. 386,535), PAYABLE TO THE COUNTY TREASURER, KIT CARSON COUNTY, BURLINGTON, COLORADO, IN THE AMOUNT OF $492.08, COVERING TAXES FOR THE CALENDAR YEARS 1936 AND 1937 ON PROPERTY LOCATED AT BETHUNE, COLORADO, AND ACQUIRED BY THE UNITED STATES (FARM CREDIT ADMINISTRATION) ON MAY 10, 1938, BY FORECLOSURE. BUREAU VOUCHER NO. 1331 WAS SUBMITTED TO YOUR OFFICE WITH MY LETTER OF AUGUST 29, 1938, AND SUBSEQUENTLY PAYMENT WAS MADE BY CHECK DATED SEPTEMBER 13, 1938.

AFTER THE CHECK HAD BEEN FORWARDED TO THE TREASURER OF KIT CARSON COUNTY, THIS OFFICE REQUESTED A FORMAL RECEIPT FOR PAYMENT OF THE TAXES AND CORRESPONDENCE WITH THE COUNTY TREASURER DEVELOPED THE FACT THAT THE COUNTY AUTHORITIES DO NOT CONSIDER THE CHECK IN THE AMOUNT OF $492.08 AS PAYMENT IN FULL OF THE TAXES, DUE TO INTEREST AND PENALTIES ACCRUED. WHEN I SUBMITTED TO YOUR OFFICE BUREAU VOUCHER NO. 1331, WITH MY LETTER OF AUGUST 29, 1938, THIS OFFICE WAS UNDER THE IMPRESSION THAT THE 1936 AND 1937 TAXES AS SET FORTH ON THE VOUCHER REPRESENTED THE BASIC AMOUNT OF THE TAXES AND DID NOT INCLUDE INTEREST OR PENALTIES.

SUBMITTED HEREWITH FOR PREAUDIT IS BUREAU VOUCHER NO. 3319, PAYABLE TO THE COUNTY TREASURER, KIT CARSON COUNTY, BURLINGTON, COLORADO, IN THE AMOUNT OF $6.68, REPRESENTING BALANCE DUE ON 1936 AND 1937 TAXES AND INTEREST THEREON TO OCTOBER 15, 1938, RELATIVE TO THE PROPERTY LOCATED AT BETHUNE, COLORADO, AND ACQUIRED BY THE UNITED STATES ON MAY 10, 1938, BY FORECLOSURE. THE STATEMENT OF BALANCE DUE, ATTACHED TO THE VOUCHER AND MADE A PART THEREOF, SETS FORTH IN DETAIL THE BASIC AMOUNTS OF THE 1936 AND 1937 TAXES AND THE METHOD OF COMPUTING THE INTEREST AND PENALTIES THEREON UNTIL DATE OF PAYMENT.

IN VIEW OF YOUR DECISION PUBLISHED IN 15 COMPTROLLER GENERAL, PAGE 179, AS MODIFIED BY YOUR LETTER OF MARCH 29, 1938 (A-54351), IT IS THE VIEW OF THIS OFFICE THAT NO INTEREST OR PENALTIES CAN BE CHARGED AGAINST THE UNITED STATES FOR ANY PERIOD SUBSEQUENT TO THE DATE THAT TITLE TO THE PROPERTY IN QUESTION IS VESTED IN THE UNITED STATES, IN THIS CASE MAY 10, 1938. ACCORDINGLY, IT IS THE VIEW OF THIS OFFICE THAT TAXES ON THE PROPERTY LOCATED AT BETHUNE, COLORADO, SHOULD HAVE BEEN COMPUTED AS FOLLOWS:

CHART TAXES FOR CALENDAR YEAR 1936 -------------------------------- - $228.62 INTEREST ON FIRST HALF OF 1936 TAXES (6 PERCENT PER ANNUM ON

$114.31 FROM MARCH 1, 1937 TO AUGUST 1, 1937) -------------- 2.87 INTEREST ON 1936 TAXES FROM AUGUST 1, 1937, TO MAY 10, 1938

(8 PERCENT PER ANNUM ON $228.62 FROM AUGUST 1, 1937, TO

MAY 10, 1938) ---------------------------------------------- 14.13 TAXES FOR CALENDAR YEAR 1937 ---------------------------------- 238.31 INTEREST ON FIRST HALF OF 1937 TAXES (6 PERCENT PER ANNUM ON

$119.16 FROM MARCH 1, 1938, TO MAY 10, 1938) --------------- 1.37

TOTAL TO MAY 10, 1938 ------------------------------------485.30 PAID TO TREASURER OF KIT CARSON COUNTY, BY CHECK DATED

SEPTEMBER 13, 1938--- D.O. VOUCHER NO. 386535 -------------- 492.08

OVERPAYMENT ---------------------------------------------- 6.78

ACCORDING TO THE ABOVE CALCULATION, IT APPEARS THAT THE CHECK IN THE AMOUNT OF $492.08, DATED SEPTEMBER 13, 1938, OVERPAID THE LIABILITY OF THE UNITED STATES TO KIT CARSON COUNTY, AND THAT A REFUND IS DUE IN THE AMOUNT OF $6.78. THEREFORE, BUREAU VOUCHER NO. 3319 DOES NOT HAVE THE APPROVAL OF THIS OFFICE.

IT WILL BE APPRECIATED IF YOU WILL NOTIFY THIS OFFICE OF THE ACTION TAKEN BY YOU WITH RESPECT TO THE OVERPAYMENT.

IT IS WELL ESTABLISHED THAT PROPERTY OF THE UNITED STATES IS NOT SUBJECT TO TAXATION BY THE STATES AND THAT THE RIGHT OF A STATE TO TAX PRIVATE PROPERTY CEASES WHEN THE TITLE THERETO PASSES TO THE FEDERAL GOVERNMENT. ACCORDINGLY, WHEN PROPERTY IS ACQUIRED BY THE UNITED STATES, THE RIGHT OF THE STATE TO THE PAYMENT OF TAXES, INTEREST, OR PENALTY ACCRUING PRIOR TO THE DATE THE TITLE PASSES TO THE UNITED STATES BECOMES FIXED AS OF THAT DATE, AND NO INTEREST OR OTHER PENALTY MAY BE ASSESSED AGAINST THE UNITED STATES ON THE PROPERTY ON OR AFTER THAT TIME (15 COMP. GEN. 179; 17 ID. 526).

THE VOUCHER PROPOSES THE PAYMENT OF $6.68 TO THE COUNTY TREASURER, KIT CARSON COUNTY, COLORADO, AS INTEREST OR PENALTY ON TAXES PREVIOUSLY ASSESSED BUT ACCRUING AFTER THE TITLE PASSED TO THE UNITED STATES, AND IS THEREFORE DISAPPROVED, NO PAYMENT BEING AUTHORIZED. IN VIEW OF YOUR REPORT OF THE OVERPAYMENT OF $6.78 ON VOUCHER 386535 IN FAVOR OF THE SAME PAYEE A CHARGE WILL BE RAISED IN THIS OFFICE AGAINST THE TREASURER OF KIT CARSON COUNTY FOR THE AMOUNT OF SUCH OVERPAYMENT.