Did Connecticut's tax department have to report a taxpayer on a current payment plan for an offset against state contract payments?

Plain-English summary

Connecticut's Deputy Attorney General concluded that the Department of Revenue Services was not required to report a taxpayer to the Comptroller for a state-payment tax offset when the department had accepted another payment arrangement and the taxpayer was keeping that agreement. Under the 1991 statute, the Comptroller had to reduce certain state payments after Revenue Services notified it that taxes were “due to the state.” The opinion read “due” in this setting as payable immediately or on demand. Payments governed by a current agreed plan were payable according to that plan.

The question arose after Revenue Services accepted a sales and use tax payment plan from CPI and its subsidiaries, then reported the delinquency to the Comptroller. The Comptroller intercepted state contract payments owed to CPI, which protested under its agreement. The opinion resolved whether notification was required while the plan was being honored. It did not state that the Comptroller had authority to ignore a notice already received, or decide how to restore an intercepted payment.

Currency note

This opinion was issued in 1991. 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.

Historical summary

For Revenue Services: The opinion rejected the view that the department had to report every delinquent taxpayer despite an agreed payment plan. Its conclusion was conditional: the department had accepted an alternative payment method and the taxpayer was not in default.

For contractors owing tax: CPI's agreement required timely filing and payment of current taxes and review every six months. The opinion treated taxes covered by a compliant plan as payable on that plan's terms for purposes of the notification duty; it did not declare that all tax debt disappeared.

For the Comptroller: Once the tax department notified the Comptroller that taxes were due, the statute's quoted text required withholding from covered state payments, subject to listed exceptions. The opinion focused on whether Revenue Services had to initiate that notice while the taxpayer complied with a plan.

Common questions

Does a tax payment plan automatically require a state contract payment offset?

The Attorney General said no. Revenue Services did not have to notify the Comptroller under Conn. Gen. Stat. § 12-39g when it had accepted a payment plan and the taxpayer was complying with it.

Was CPI's payment plan irrelevant because the underlying taxes were unpaid?

No. The opinion said the key question was whether the taxes were “due” in the sense of payable immediately or on demand. A current agreement set when payment was required.

Did the opinion order the Comptroller to repay CPI's intercepted funds?

It did not address a repayment remedy. It answered the narrower question whether Revenue Services was obliged to send a notice triggering the offset while CPI complied with its plan.

Background and statutory framework

Conn. Gen. Stat. § 12-39g directed the Comptroller to reduce covered amounts payable by the state after notice from the revenue commissioner that taxes, penalties, and interest were due. The quoted statute excluded certain wage payments and tax amounts subject to timely correction requests or pending court appeals. The Deputy Attorney General interpreted the statute's “due to the state” condition against the accepted payment schedule and found no mandatory notification for a taxpayer honoring that schedule.

Citations and references

The original text below quotes § 12-39g and explains why an agreed installment schedule mattered to the meaning of “due.”

Source

• Landing page: https://portal.ct.gov/AG/Opinions
• Opinion page: https://portal.ct.gov/ag/opinions/1991-formal-opinions/honorable-allan-a-crystal-department-of-revenue-services-1991034-formal-opinion-attorney-general-of

Original opinion text

Honorable Allan A. Crystal, Department of Revenue Services, 1991-034 Formal Opinion, Attorney General of Connecticut

Attorney General's Opinion

Attorney General, Richard Blumenthal

November 22, 1991

Honorable Allan A. Crystal

Department of Revenue Services

92 Farmington Avenue

Hartford, CT 06105

Dear Commissioner Crystal:

By letter of December 19, 1990, CPI and its subsidiaries proposed a payment plan for all unpaid sales and use taxes owed through October 31, 1991. The Department of Revenue Services ("the Department") responded by letter of December 27, 1990 accepting a payment plan on the terms stated in the Department's letter and on the specific condition that current taxes must be filed and paid timely and that the agreement would be subject to review every six months. At some time after the payment plan was initiated, the Department reported CPI's delinquency to the Comptroller pursuant to Conn. Gen. Stat. § 12-39g which provides as follows.

Upon notification to the comptroller by the commissioner of revenue services that any taxes, including penalties and interest related thereto, are due to the state from any person, the comptroller shall withhold any order upon the treasurer for payment of any amount payable by the state to such person unless the amount so payable is reduced by the amount of such taxes, penalties and interest, provided any such amount payable by the state shall not be so reduced if (1) such amount payable is a payment of salary or wages, or any payment in lieu of or in addition to such salary or wages, to a state employee, (2) such taxes, penalties and interest have been fixed by said commissioner pursuant to a request within the time allowed under this title to correct the amount thereof or (3) such taxes, penalties and interest have been determined by said commissioner to be due and such determination is the subject of an appeal pending before any court in this state. The comptroller shall promptly notify the commissioner of revenue services of any payment reduced under the provisions of this section.

Conn. Gen. Stat. § 12-39g (Emphasis added).

In accordance with this provision, the Comptroller intercepted funds owing to CPI under contracts with the State. CPI has protested that such action was not in accordance with the agreement embodied in its payment plan.

It has been suggested that the Department lacks discretion in this matter and that under section 12-39g it must report all delinquent taxpayers to the Comptroller regardless of any agreement for payment. Upon examination of the statute, however, it would appear that when alternative means of payment have been accepted by the Department and the taxpayer is not in default under its agreement, the Department is not required to notify the Comptroller that taxes "are due to the state."

It is a cardinal rule of construction that statutes must be construed to give effect to the intent of the legislature, State v. Parmalee , 197 Conn. 158, 161, 496 A.2d 186 (1985) quoting, State v. Campbell, 180 Conn. 557, 561, 429 A.2d 960 (1980), and where the language of the statute is clear and unambiguous, legislative intent is determined from the language of the act alone. Beloff v. Progressive Casualty Insurance Co., 203 Conn. 45, 54, 523 A.2d 477 (1987). Moreover, words and phrases used in a statute must be interpreted according to their ordinary meaning unless their context dictates otherwise. Kilpatrick v. Board of Education, 206 Conn. 25, 28, 535 A.2d 1311 (1988); State v. Bruney, 189 Conn. 321, 326,455 A.2d 1335 (1983); Conn. Gen. Stat. § 1-1(a).

The key issue in applying section 12-39g in this instance is whether taxes are in fact "due" within the meaning of the statute. In its common ordinary meaning the term "due" means "payable immediately or on demand." It is payable in accordance with the agreement of the parties. Accordingly, Conn. Gen. Stat. § 12-39g does not require the Department to notify the Comptroller that taxes "are due to the state" from a taxpayer which is complying with a payment plan.

Very truly yours,

Aaron S. Bayer

Deputy Attorney General

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