B-162452, MAY 27, 1968

B-162452, MAY 27, 1968

TO MR. C. W. LAMAR:

YOUR LETTER OF APRIL 24, 1968 (YOUR REFERENCE 9121:JEE:SN), REFERS TO OUR LETTER OF MARCH 5, 1968, B-162452, TO YOU, WHEREIN WE HELD THAT THE MAREMONT CORPORATION'S (CORPORATION) CLAIM AGAINST THE UNITED STATES, COVERING REFUND OF THE ILLINOIS RETAILERS' OCCUPATION TAX, COULD BE CERTIFIED FOR PAYMENT PROVIDED THE CORPORATION OBTAINED A FINAL DETERMINATION FROM THE STATE THAT ITS TAX CLAIM (AGAINST THE STATE) WILL NOT BE ALLOWED.

YOU ADVISE THAT YOU WROTE TO THE CORPORATION INFORMING IT OF THE ABOVE REQUIREMENT. IN REPLY THE CORPORATION ENCLOSED A LETTER FROM THE ILLINOIS DEPARTMENT OF REVENUE (DEPARTMENT) WHICH OUTLINES SECTION 6C OF THE RETAILERS' OCCUPATION TAX ACT. SECTION 6C PROVIDES, IN SUBSTANCE, THAT THE DEPARTMENT'S "NOTICE OF TENTATIVE DETERMINATION OF CLAIM" BECOMES FINAL IF A PROTEST IS NOT FILED WITHIN 20 DAYS.

YOU STATE THAT IT IS WELL ESTABLISHED THAT THE CORPORATION'S CLAIM FOR TAX REFUND WAS FILED WITH THE STATE ON JULY 19, 1961, AND THAT THE TENTATIVE DETERMINATION OF DENIAL WAS STATED ON AUGUST 22, 1966. YOU ADVISE THAT NO EVIDENCE HAS BEEN SUBMITTED WHICH WOULD INDICATE THAT A PROTEST WAS FILED WITHIN THE PRESCRIBED 20-DAY PERIOD; BUT THAT ON THE CONTRARY A LETTER FROM THE CORPORATION DATED NOVEMBER 20, 1967, STATES IN PART THAT:

"BASED ON YOUR LETTER (COPY ENCLOSED), THE CLAIM WAS NOT PURSUED ANY FURTHER THAN THE TENTATIVE DETERMINATION.' YOU REPORT THAT THE COPY OF YOUR LETTER, TO WHICH THE CORPORATION REFERS, WAS DATED FEBRUARY 23, 1967, AND WAS ONE WHICH WAS SENT TO ALL RETAILERS WHO HAD FILED CLAIMS FOR CREDIT AT YOUR DIRECTION.

YOU POINT OUT THAT OUR LETTER OF OCTOBER 6, 1967, B-162452 (CONCERNING THE SAME CLAIM), READS IN PART AS FOLLOWS:

"* * * FURTHER, WHILE THE CONTRACTOR STATES HE HAS NOT RECEIVED A REFUND OF THE TAX FROM THE STATE, IT IS NOT CLEAR FROM THE RECORD WHETHER A CLAIM FOR A REFUND OR CREDIT FOR THE TAX WAS FILED BY THE CONTRACTOR WITH THE STATE OR WHETHER OTHER APPROPRIATE ACTION WAS TAKEN BY THE CONTRACTOR TO SAVE OR PROTECT HIS RIGHTS (AND THEREBY THE GOVERNMENT-S) IN CONNECTION WITH THE TAX. * * *" YOU STATE THAT SINCE IT APPEARS FROM THE ABOVE THAT THE CORPORATION DID NOT PROTECT ITS INTEREST IN THE MANNER REQUIRED BY STATE LAW, YOU QUESTION WHETHER YOU CAN PROPERLY HONOR ITS CLAIM, EVEN THOUGH IT IS CLEAR THAT NO REFUND WILL BE MADE BY THE STATE.

ACCORDINGLY OUR DECISION IN THE MATTER IS REQUESTED.

ALTHOUGH THE CORPORATION FAILED TO PROTEST THE DEPARTMENT'S TENTATIVE DENIAL OF ITS CLAIM FOR CREDIT, IT APPEARS THAT A PROTEST WOULD NOT HAVE RESULTED IN ALLOWANCE OF THE CLAIM BY THE STATE IN THE INSTANT CASE. THIS ASSUMPTION IS BASED ON A STATEMENT IN 43 COMP. GEN. 721 TO THE EFFECT THAT A REPRESENTATIVE OF THE ILLINOIS DEPARTMENT OF REVENUE INDICATED (SOMETIME PRIOR TO MAY 6, 1964) THAT NO CLAIMS FORCREDIT WOULD BE ALLOWED AS A RESULT OF THE OLIN MATHIESON CASE UNTIL NEGOTIATIONS BETWEEN THE STATE AND THE DEPARTMENT OF JUSTICE HAVE BEEN CONCLUDED. FROM YOUR LETTER OF FEBRUARY 23, 1967, IT MAY REASONABLY BE ASSUMED THAT THE NEGOTIATIONS BETWEEN THE DEPARTMENT OF JUSTICE AND THE STATE HAVE BEEN CONCLUDED AND THAT THE STATE WILL DENY ALL CLAIMS FOR REFUND OR CREDIT PREDICATED SOLELY ON THE GROUND THAT THE TAXED SALES WERE MADE TO THE FEDERAL GOVERNMENT.

IN THE CIRCUMSTANCES THE VOUCHER MAY BE CERTIFIED FOR PAYMENT, IF OTHERWISE CORRECT. CF. 43 COMP. GEN. 721 AND 39 COMP. GEN. 432.