Dear Representative Lindley,

¶ 0 This Office has received your request for an Attorney General Opinion in which you ask, in effect, the following question:

May the Oklahoma Tax Commission, consistent with the rules ofthe Merit System of Personnel Administration, require itsemployees to timely file a State tax return and to pay any taxdue as a condition of employment?

¶ 1 In order to answer this question we must look at the statutes governing the Oklahoma Tax Commission and the policies and procedures implemented by the Oklahoma Tax Commission. Further, we must look at the statutes and rules governing the Merit System of Personnel Administration ("Merit System"), 74O.S. Supp. 1998, §§ 840-4.1[74-840-4.1] to 840-4.19.

¶ 2 The purpose of the Oklahoma Tax Commission ("Commission") is to foster, to the fullest extent possible, voluntary compliance with Oklahoma's revenue laws. In order to fulfill its mission, the Commission may "employ such employees and incur such expenses as may be necessary for the proper discharge of its duties." 68 Ohio St. 1991, § 104[68-104]. Pursuant to 74 O.S. Supp. 1998,§ 840-5.8[74-840-5.8], the Commission has been placed under the Merit System and as such, most of the employees and positions are classified and subject to the provisions of the Merit System. This statute provides in part:

The Oklahoma Tax Commission shall be under the Merit System. Except as otherwise provided in subsection B of this section, all offices, positions and personnel shall be classified and subject to the provisions of the Merit System of Personnel Administration and rules promulgated hereunder.

74 O.S. Supp. 1998, § 840-5.8[74-840-5.8](A).

¶ 3 This statute goes on to enumerate certain positions and employees which are unclassified and generally excluded from coverage under the Merit System, but who are subject to other provisions of the Oklahoma Personnel Act as well as to the rules of the Merit System relating to discipline in accordance with OAC530:10-1-2. The conduct of classified employees is set forth in Merit System which states in part:

Every classified employee shall fulfill to the best of his or her ability the duties of the office or position conferred upon the employee and shall behave at all times in a manner befitting the office or position the employee holds.

OAC 530:10-11-91(a).

¶ 4 The Merit System also provides for discipline of employees in OAC 455:10-11-1. This rule provides:

Each appointing authority shall establish written policies and procedures for progressive discipline of employees according to the rules established by the Oklahoma Merit Protection Commission [74:840-6.3]. Each appointing authority is responsible for developing and maintaining a safe and productive work environment. Each appointing authority and each supervisor is responsible for promptly applying discipline when necessary that is equitable and suitable for the offense considering the circumstances.

OAC 455:10-11-1.

¶ 5 Although these rules provide standards and guidelines for applying prompt discipline to classified employees, the rules also allow an appointing authority, such as the Commission, to use these disciplinary procedures with other employees. OAC455:10-11-2.

¶ 6 Pursuant to the Merit System, discipline consists of "informal discipline" such as verbal warnings and reprimands or corrective interviews, OAC 455:10-11-10; or, "formal discipline" such as written reprimands, suspension without pay, involuntary demotion or discharge. OAC 455:10-11-11. In both cases, the discipline is administered "to correct infractions of statute, rule, policy, practice or procedure regarding work performance or behavior. OAC 455:10-11-3 (emphasis added).

¶ 7 The Commission has published an employee Code of Conduct Handbook ("Handbook") and requires that all employees conduct themselves and their affairs in accordance with the provisions of the Handbook. Section 4 of the Handbook provides that "[a]ll Tax Commission employees are expected to fully comply with the letter and spirit of the Rules and Regulations contained in this HANDBOOK." Section 8 of the Handbook provides that all employees "shall comply with all of the policies and operating procedures of the agency/department in which they work." The Handbook enumerates various policies adopted by the Oklahoma Tax Commission, including Policy 102, titled "Mandatory Employee Compliance With Tax Obligations," which provides that every employee of the Commission who is required to file a Federal tax return must also timely file a State tax return. It also requires that employees pay any tax due or enter into an acceptable payment agreement for taxes owed. This policy states:

Every Commission employee who is required to file a Federal income tax return must timely file a State of Oklahoma individual income tax return, pay any tax due or enter into an accepted pay agreement. A "tax due" as used in the preceding sentence includes: (a) a balance on a State tax return; or (b) a State tax assessment where that Agency's statutes or regulations require immediate payment notwithstanding the fact that the tax assessment is being contested. Should the employee apply for an automatic extension of time to file his/her Federal return, the employee will be contacted by the Personnel Office of the Oklahoma Tax Commission and be required to sign a statement that he/she has made application for an extension from the Internal Revenue System for the periods from April 15 to October 15. If it is necessary for the employee to request the 2nd extension, it is the responsibility of the employee to submit proof of filing the request and proof of final approval from the IRS to the Personnel Office of the Oklahoma Tax Commission. . . .

¶ 8 This policy clearly states that every employee who must file a Federal tax return must also timely file a State tax return and pay any tax due or enter into an accepted payment plan of any tax due. Failure of an employee to do so is a violation of the policy of the Oklahoma Tax Commission and subjects the employee to disciplinary action up to, and including, discharge pursuant to the Merit System of Personnel Administration's rules OAC 455:10-11-1 through 455:10-11-18.

¶ 9 Therefore, it is the Opinion of the Attorney Generalthat: The Oklahoma Tax Commission may require, consistent with theMerit System of Personnel Administration's rules, and pursuant topolicies adopted in its Employee Code of Conduct Handbook, thatits employees who are required to file a Federal tax return,timely file a State tax return and pay any tax due or enter intoan accepted payment plan as a condition of employment.

W.A. DREW EDMONDSON ATTORNEY GENERAL OF OKLAHOMA

STEVEN K. SNYDER ASSISTANT ATTORNEY GENERAL