Could a Texas city inspect confidential taxpayer records behind a sales-tax refund that reduced the city's tax allocation?

Texas AG Opinion JM-590: Sales Tax Refund Records

Plain-English summary

JM-590 concluded in 1986 that information a taxpayer submitted to support a sales-tax refund was confidential under the law then in force. The opinion specifically covered information identifying the parties and the amount of the transaction. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1986/jm0590.pdf

The opinion also concluded that a city whose sales-tax allocation was reduced by the refund had no special right to the Comptroller's confidential records. It rejected the argument that the Comptroller acted as the city's agent or fiduciary and said the city had "no greater right of access than any other requestor." Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1986/jm0590.pdf

The official landing page records later treatment: "Modified by ORD-624." ORD-624 narrowed language in JM-590 that could be read to protect every fact about a taxpayer's business, even when the information had no connection to records or examinations covered by the tax-confidentiality statutes. Sources: https://www.texasattorneygeneral.gov/opinions/jim-mattox/jm-0590 and https://www.texasattorneygeneral.gov/open-government/open-records-decisions/dan-morales/ord-624

Currency note

This opinion was issued in 1986. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Subsequent treatment

The Texas Attorney General's JM-590 landing page states:

"Modified by ORD-624"

Source: https://www.texasattorneygeneral.gov/opinions/jim-mattox/jm-0590

ORD-624 described the modification this way:

"We modify language in Attorney General Opinion H-223 and Attorney General Opinion JM-590 suggesting that sections 111.006, 151.027, and 171.206 of the Tax Code prohibit the comptroller from disclosing any and all information about the taxpayer's business affairs despite its lack of connection with the subject matter of those provisions."

Source: https://www.texasattorneygeneral.gov/open-government/open-records-decisions/dan-morales/ord-624

ORD-624 therefore limited JM-590's broad wording. It did not say that confidential information drawn from protected tax records or taxpayer examinations became public. Source: https://www.texasattorneygeneral.gov/open-government/open-records-decisions/dan-morales/ord-624

Who this opinion affected in 1986

Cities receiving local sales-tax allocations: JM-590 said an affected city had no greater access than another requester to confidential information about a taxpayer's refund. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1986/jm0590.pdf

The Comptroller's office: The opinion said the Comptroller could disclose the limited information that the Open Records Act expressly made public, but not the broader refund-support information protected by section 151.027. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1986/jm0590.pdf

Taxpayers: The opinion treated identifying transaction details, tax amounts, and business-affairs information drawn from protected tax materials as confidential under the statutes discussed in 1986. ORD-624 later clarified that the confidentiality rule did not automatically cover unrelated business information from other sources. Sources: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1986/jm0590.pdf and https://www.texasattorneygeneral.gov/open-government/open-records-decisions/dan-morales/ord-624

Common questions

Was the identity of the taxpayer or seller public?

JM-590 said the requested refund-support information was confidential, except for the narrow identifying information that section 6(6) of the former Open Records Act expressly made public. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1986/jm0590.pdf

Could the city see the amount of the refunded transaction?

No. The opinion treated the transaction amount and other refund-support information as protected by section 151.027 of the Tax Code. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1986/jm0590.pdf

Did the city's financial interest create a special access right?

No. JM-590 stated that the city had "no greater right of access than any other requestor" and found no principal-agent or fiduciary relationship that changed that result. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1986/jm0590.pdf

Could the Comptroller share the records if the city promised to keep them confidential?

No. The opinion said the statute listed the entities that could receive the information and did not include an affected municipality, so a confidentiality promise did not authorize the transfer. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1986/jm0590.pdf

What did ORD-624 change?

ORD-624 modified wording suggesting that all information about a taxpayer's business affairs was confidential. It tied protection to information connected with the subject matter of the cited tax-confidentiality provisions. Source: https://www.texasattorneygeneral.gov/open-government/open-records-decisions/dan-morales/ord-624

Background and statutory framework

The request arose after a home-rule city's local sales-tax payment was reduced to offset a large refund on a single transaction. The city asked the Comptroller for the seller's name and address, the transaction amount, and documents showing how the refund decision was made. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1986/jm0590.pdf

JM-590 relied principally on section 3(a)(1) of the former Open Records Act and section 151.027 of the Tax Code. The quoted version of section 151.027 made information in or derived from required tax records confidential and separately protected information obtained while examining a taxpayer's books, records, officers, or employees. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1986/jm0590.pdf

The opinion rejected the city's agency theory because an agent acts under the principal's control, while neither the city nor the Comptroller controlled the other in administering the local tax. It also found no statute giving the city a special access right. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1986/jm0590.pdf

Key source language

JM-590 stated:

"Such information is excepted from required public disclosure under section 3(a)(l) of the Open Records Act, article 6252-17a, V.T.C.S."

"The act affords the city no greater right of access than any other requestor."

"We conclude therefore that you may not transfer this information to such a city in return for a promise of confidentiality."

Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1986/jm0590.pdf

Citations and references

Statutes and former statutes:

• article 6252-17a, V.T.C.S. (Open Records Act), including sections 3(a)(1) and 6(6)
• section 151.027 of the Tax Code
• article 1066c, V.T.C.S. (Local Sales and Use Tax Act)
• Tax Code chapter 151

Cases:

• Thompson v. Schmitt, 274 S.W. 554 (Tex. 1925)
• Kopecky v. Yoakum, 52 S.W.2d 240, judgment adopted (Tex. Comm'n App. 1932)
• Crosthwait v. State, 138 S.W.2d 1060 (Tex. 1940)
• State v. Mauritz-Wells Co., 175 S.W.2d 238 (Tex. 1943)
• Federal Crude Oil Co. v. Yount-Lee Oil Co., 52 S.W.2d 56 (Tex. 1932)

Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1986/jm0590.pdf

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/jim-mattox/jm-0590
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1986/jm0590.pdf
• Modifying decision: https://www.texasattorneygeneral.gov/open-government/open-records-decisions/dan-morales/ord-624

Original opinion text

C

December 23, 1986

Honorable Bob Bullock
Comptroller of Public Accounts
L.B.J. State Office Building
Austin, Texas
78774

Opinion No. JM-590
Re: Whether information submitted by a taxpayer in support
of a request for a refund of
sales taxes paid is excepted
from disclosure under the Open
Records Act

Dear Mr. Bullock:
You ask us two questions regarding the applicability of the Open
Records Act, artikle 6252-17a. V.T.C.S., to certain information in
your possession and control. Your two questions are as follows:

1. Is information submitted by a taxpayer in
   support of a request for a refund of sales taxes
   paid excepted from disclosure under the Open
   This
   Records Act?
   information includes the
   ~identity of the parties to the transaction giving
   rise to the refund and the amount of the
   transaction.
2. Does a city whose sales tax allocation is
   affected by this refund have any greater right to
   this information than any other person?
   We answer your first question in the affirmative. Such information is
   excepted from required public disclosure under section 3(a)(l) of the
   Open Records Act, article 6252-17a, V.T.C.S. We answer your second
   question in the negative. The act affords the city no greater right
   of access than any other requestor.
   You inform us that a certain home rule city, which imposes a
   sales tax pursuant to article 1066~. V.T.C.S., (Local Sales and Use
   Tax Act). has requested from your office certain information regarding
   a specific sales tax refund. After the city was notified that a large
   tax refund on a single transaction was being offset against that
   city's current sales tax payment, it requested

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Honorable Bob Bullock - Page 2

(m-590)

7

any documentation reflecting the name and address
of the seller, the total amount of the transaction, as well as any documentation including but
not limited to working papers of your office,
whereby [was made] the determination that the
exemption was valid.
Section 5(a) of article 1066c, V.T.C.S.. reposes in the
comptroller the duty to perform all functions incident to the
administration, collection, enforcement, and operation of the tax. As
a result, you are in possession of the information which the city
seeks.
Section 6(6), article 6252-17a, V.T.C.S., specifically makes
public "the name , place of business, and the name of the city to which
local sales and use taxes are credited, if any, for the named person,
of persons reporting or paying sales and use taxes under the Limited
Sales, Excise, and Use Tax Act." The information requested, however,
is much broader in scope. You claim that the requested information is
excepted from required public disclosure by section 3(a)(l) of the
Open Records Act which excepts "information deemed confidential by
law, either Constitutional, statutory, or by judicial decision,"
specifically, section 151.027 of the Tax Code. We agree.
Section 151.027 of the Tax Code provides the following:
5151.027. Confidentiality of Tax Information
(a) Information in or derived from a record,
report, or other instrument required to be
furnished under this chapter is confidential and
not open to public inspection, except for information set forth in a lien filed under this title or
a permit issued under this chapter to a seller and
except as provided by Subsection (c) of. this
section.
(b) Information secured, derived, or obtained
during the course of an examination of a
taxpayer's books, records, papers, officers, or
employees,
including
the
business
affairs,
operations, profits, losses, and expenditures of
the taxpayer, is confidential and not open to
public inspection except as provided by Subsection
(c) of this section.
(c) This section does not prohibit:

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Honorable Bob Bullock - Page 3

,(JM-590)

(1) the examination of information, if
authorized by the comptroller, by another state
officer or law enforcement officer, by a tax
official of another state, or by an official of
the United States if a reciprocal agreement
exists;
(2) the delivery to a taxpayer, or a taxpayer's authorized representative, of a copy of
a report or other paper filed by the taxpayer
under this chapter;
(3) the publication of statistics classified to prevent the identificationsof a particular report or items in a particular report;
(4) the use of records, reports, or
information secured, derived, or obtained by
the attorney general or the comptroller in an
action under this chapter against the same
taxpayer who furnished the information; or
(5) the delivery to a successor, receiver,
executor, administrator, assignee, or guarantor
of a taxpayer of information about items
included in the measure and amounts of any
unpaid tax or amounts of tax, penalties. and
interest required to be collected. (Emphasis
added).
This office has already declared in an earlier cpinion, Attorney
General Opinion H-223 (1974), that the predecessors to section 151.027
of the Tax Code, articles 1.031 and 20.11(G) of Title 122A, V.T.C.S.,
brought the information specified therein within the section 3(a)(l)
exception.
The opinion concluded that the comptroller is not
prohibited from disclosing the fact that an individual has requested a
redetermination or claim for refund hearing, but he is prohibited from
disclosing facts about that taxpayer's business affairs.
The
comptroller may disclose his resolution of the issues raised in such
administrative hearings, but he must not do so in a manner that will
make possible identification of the individual taxpayer ,involved. In
Attorney General Opinion H-661 (1975). this office further concluded
that section 151.027's predecessor statute prohibits the comptroller
from releasing information as to the amounts of the tax paid by a
particular taxpayer, nor may he release the amount of tax in
controversy in an administrative hearing prior to making a final
determination if doing so would indicate the amount of the taxpayer's
gross sales. Accordingly, we answer your first question in the
affirmative. With the exception of the information specifically made

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Honorable Bob Bullock - Page 4 (J-M-590)

public by section 6(6) of the Open Records Act, the information
requested of you is excepted from disclosure by section 3(a)(l) of
article 6252-17a.
Your second question asks whether a city whose sales tax revenue
is affected by a decision of your office has any greater right of
access to information regarding that decision than any other
requestor. It is suggested that such a city does. It is suggested
that you stand in a fiduciary relationship with each city for which
you administer a local tax, that you act as agent and that each city
stands in the position of a principal. The argument concludes that,
since a fiduciary is under a duty of disclosure to that party for whom
he acts as fiduciary, any disclosure by you to such city would not
constitute a public disclosure of such records.
We do not
characterize the relationship which exists between you and each city
for which you administer such a local tax to be one of principal and
agent. We further conclude that neither the Open Records Act nor any
other statute confers upon a city for which you administer a local tax
any special right of access not enjoyed by any other requestor.
Generally, "agency" is defined as the legal relationship, based
upon an express or implied contract of the parties or created by
operation of law, by virtue of which one party.
the agent. is
_
authorized to act for the other party, who is the principal. -See -s
V. Eikenberry. 122 S.W.2d 1045 (Tex. 1939); Thompson V. Schmitt, 274
S.W. 554 (Tex. 1925). A basic test of agency is the right of the
principal to control the actions of his agent. Vahlsing Christina
Corp. v. Ryman Well Service, Inc., 512 S.W.2d 803 (Tex. Civ. App. Corpus Christ1 1974, writ ref'd n.r.e.). No agency relationship can
be said to exist unless the actions of the alleged agent are within
the control of the principal. First National Bank of Mineola V.
Farmers and Merchants State Bank of Athens, 417 S.W.2d 317 (Tex. Civ.
In this instance, the
APP. - Tyler 1967, writ ref'd n.r.e.).
comptroller cannot be said to be an agent acting under the direction
or control of any principal.
Indeed, neither the city nor the
comptroller can be said to be acting at the control or discretion of
the other. -See V.T.C.S. art. 1066~; Tax Code ch. 151.
As to any general fiduciary duty owed by the comptroller, such
duty would appear to be owed to the state generally rather than to any
individual city in particular. Though public officers are for some
purposes agents of the public and of the policy that they represent,
Kopecky V. Yoakum, 52 S.W.2d 240, judgment adopted (Tex. Comm'n App.
1932); City of Hallettsville V. Long, 32 S.W. 567 (Tex. Civ. App.
1895, no writ), they are agents whose duty and authority are defined
and limited by law. Id.; see also Bayha V. Carter, 26 S.W. 137 (Tex.
Civ. App. 1894, no writ). An officer must look to that act by which
his office is created and its duties are defined in order to ascertain
the extent of his powers and the scope and nature of his duties; he

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Honorable Bob Bullock - Page 5

(JM-590)

may not transcend the former nor Vary the prescribed mode of
performance of the latter. Crosthwait v. State, 138 S.W.2d 1060 (Tex.
1940). We find no provision in any relevant statute which places the
comptroller in some sort of fiduciary relationship with the cities
whose local sales tax he must administer.
Finally, it is suggested that the relationship, by whatever term
it is called, which exists between the comptroller and each city for
which he administers the local tax confers upon such a city a special
right of access under the Open Records Act to the requested information. We disagree. The act itself confers no implied right of access
upon any requestor. See Attorney General Opinions MW-381 (1981);
Mu-95 (1979); Open Records Decision Nos. 330 (1982); 288 (1981).
Accordingly, we answer your second question in the negative; the city
whose sales tax revenue is directly affected by your decision
regarding a refund has no greater right to this information than any
other requestor.
Although a long line of Attorney General Opinions and Open
Records Decisions have concluded that information may be transferred
between governmental agencies which are subject to the Texas Open
Records Act without destroying its confidential character, Attorney
General Opinions H-917, H-836 (1976); H-242 (1974); M-713 (1970); Open
Records Decision Nos. 272 (1981); 183 (1978). this principle has never
been applied where a statute makes such information confidential.
Section 151.027 of the Tax Code enumerates those entities to which the
information may be disclosed; an affected municipality is not
included. The express mention or enumeration of one person, thing,
consequence, or class is tantamount to an express exclusion of all
others. State V. Mauritz-Wells Co.. 175 S.W.2d 238 (Tex. 1943);
Federal Crude Oil Co. V. Yount-Lee Oil Co., 52 S.W.2d 56 (Tex. 1932).
We conclude therefore that you may not transfer this information to
such a city in return for a promise of confidentiality.
SUMMARY
Information received by the Comptroller of
Public Accounts pursuant to article 1066c,
V.T.C.S., (Local Sales and Use Tax Act) and
chapter 151 of the Tax Code is excepted from
required public disclosure under the Open Records
Act by section 3(a)(l) of the act and by section
151.027 of the Tax Code.
A city whose sales tax revenue is affected by a
decision made by the comptroller of public
accounts regarding a sales tax refund has no
greater right of access than does any other
requestor under
the
Open
Records
Act ~to

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Honorable Bob Bullock - Page 6

(JM-590)

information in the custody of
concerning that refund.

the comptroller

JIM
MATTOX
Attorney General of Texas
JACK HIGHTOWER
First Assistant Attorney General
MARY KELLER
Executive Assistant Attorney General
RICK GILPIN
Chairman, Opinion Committee
Prepared by Jim Moellinger
Assistant Attorney General

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