HB 1755 -- Taxation:  Credits and Refunds

Sponsor:  Froelker

This bill makes changes to the conditions for allowing income
tax and sales tax refunds or credits and for the payment of
interest on certain overpayment or underpayment of taxes.

Under current law, any balance resulting from the offset of any
income or withholding tax overpayment to satisfy other debts
owed the state by the taxpayer must be refunded to the
taxpayer.  The bill will allow the balance to be credited to the
taxpayer's account instead of being refunded.

The bill also requires the payment of interest at the statutory
adjusted rate to an income taxpayer when an overpayment of taxes
resulted from the taxpayer filing an amended return after the
due date of the original return.  Under current law, the
taxpayer would receive 6% per annum interest under this
circumstance.

Under current law, interest is paid on any balance that results
after the crediting of any overpayment of sales tax against the
current sales tax liability of a taxpayer.  The bill requires
interest to be paid prior to the crediting of overpayments
against a taxpayer's current liability.  The Director of the
Department of Revenue will be required to refund the balance
within 120 days from the date the tax was collected after
receiving proper documentation from the taxpayer.

The bill also limits the recovery in any action taken to recover
erroneous refund claims from a sales/use tax filer to 6 months
from the date of the alleged erroneous refund.