§231-23 - Adjustments and refunds.

§231-23 Adjustments and refunds. (a)
This subsection shall apply to all taxes except those collected under chapter
247 and those collected under a chapter containing a provision for credit and
refund of the amount of tax paid in excess of the tax imposed by such chapter.
As to all tax payments for which a refund or credit is not authorized by this
subsection (including without prejudice to the generality of the cases of
unconstitutionality hereinafter mentioned in (1)(C)) the remedies provided by
appeal or under section 40-35 are exclusive.

(1) If the amount already paid exceeds that which
should have been paid under the chapter imposing a particular tax, or if the
amount already paid results in duplication of payment in whole or in part, the
excess so paid shall be refunded in the manner provided in subsection (c)
subject however to the following limitations:

(A) No refund shall be made unless an
application for the refund shall have been made within five years after the
amount to be refunded was paid;

(B) No recourse may be had except under
section 40-35 or by appeal for refunds of taxes paid pursuant to an assessment
by the director of taxation, provided that if the assessment by the director
shall contain clerical errors, transposition of figures, typographical errors,
and errors in calculation or if there shall be an illegal or erroneous
assessment, the usual refund procedures shall apply; or

(C) No refund or overpayment credit shall be
made unless the original payment of the tax was due to the law having been
interpreted or applied in respect of the taxpayer concerned differently than in
respect of taxpayers generally.

(2) In any case where a taxpayer is entitled to a
refund, the taxpayer, at the taxpayer's election, may apply the amount of the
refund as an overpayment credit to taxes subsequently accruing under the same
chapter as that under which the refundable amount was collected.

(b) This subsection shall apply to the taxes
collected under chapter 247.

There may be refunded in the manner provided in
subsection (c) such conveyance tax as has been erroneously or unjustly paid.

(1) All refunds shall be paid only upon a form to be
known as a "refund voucher" prepared by the collector. The refund
vouchers shall set forth all the details of each transaction, shall be approved
by the director, and shall be forwarded to the comptroller from time to time.
The comptroller shall issue a warrant, in the form prescribed by section 40-52,
for the payment of any such refund out of the tax reserve fund hereinafter
created; provided that if the person entitled to the refund is delinquent in
the payment of any tax, the comptroller, upon demand of the collector and after
notice to the delinquent taxpayer, shall withhold the amount of the delinquent
taxes, together with penalties and interest thereon, from the amount of the
refund and pay the same to the collector.

(2) There is hereby appropriated, from the general
revenues of the State not otherwise appropriated, the sum of $25,000 which
shall be set aside as a trust fund to be known as the tax reserve fund. All
refunds of taxes collected by the department under chapters of the law under
title 14 administered by the department shall be made out of the tax reserve
fund. The director of taxation, from time to time, may deposit taxes collected
under chapters of the law under title 14 administered by the department in the
state treasury to the credit of the tax reserve fund so that there may be
maintained at all times a fund not exceeding $25,000. The amounts deposited
shall be made from the taxes with respect to which a particular refund is made.

(d) This subsection shall apply to a refund
for an overpayment of a tax.

(1) If the tax return as filed by a taxpayer shows
the amount already paid, whether or not on the basis of installments, exceeds
the amount determined to be the correct amount of the tax due, and the taxpayer
requests a refund of the overpayment, the amount of overpayment together with
interest, if any, shall be refunded in the manner provided in subsection (c).
The interest shall be allowed and paid at the rate of one-third of one per cent
for each month or fraction thereof, beginning with the first calendar day after
the due date of the return or, if the return is filed after the prescribed due
date, the first month following the month the return is received, and
continuing until the date that the director approves the refund voucher. If
the director approves the refund voucher within ninety days from the due date
or the date the return is received, whichever is later, and the comptroller of
the State sends the taxpayer a refund warrant within forty-five days from the
date of the director's approval, no interest on the overpayment shall be allowed
or paid. However, if either the director or the comptroller exceeds the time
allowed herein, interest will be computed from the first calendar day after the
due date of the return or from the first month following the month the return
is received by the director if the return is filed after the prescribed due
date, until the date that the comptroller sends the refund warrant to the
taxpayer.

(2) If any overpayment of taxes results or arises
from (A) the taxpayer filing an amended return, or from (B) a determination
made by the director and the overpayment is not shown on the original return as
filed by the taxpayer, interest on the overpayment shall be allowed and paid
from the first calendar day after the due date of the original return or, if
the original return is filed after the prescribed due date, the first month
following the month the return is received, to the date that the director signs
the refund voucher. If the comptroller does not send the refund warrant to the
taxpayer within forty-five days after the director's approval, interest will
continue until the date that the comptroller sends the refund warrant to the
taxpayer.

(3) For purposes of a net income tax return, if any
overpayment of any taxes results from a carryback of a net operating loss, the
overpayment shall be deemed to have been made at the close of the taxable year
in which the net operating loss arises. To the extent that the carryback of
net operating loss results in reducing the amount of underpayment of taxes for
prior taxable year or years, interest that would be chargeable because of the
underpayment shall not be applicable with respect to that amount or amounts that
are carried back.

(4) In the case of credit, interest shall be allowed
and paid from the first calendar day after the due date of the return, the
first month following the month the return is received by the director, or the
date of payment, whichever is later, to the date the credit is taken; provided
that the director may make a refund of any credit to a taxpayer where the
taxpayer has no underpayment against which to apply the credit. [L 1939, c 213,
§1; RL 1945, §5130; am L 1949, c 205, §1; RL 1955, §115-28; am L 1957, c 152,
§1; am L Sp 1959 2d, c 1, §16; am L 1963, c 45, §1(c); am L 1966, c 10, §3; am
L 1967, c 134, §2; HRS §231-23; am L 1968, c 32, §3; am L 1971, c 10, §1; am L
1972, c 200, §5; am L 1974, c 12, §1; am L 1983, c 217, §6; am L 1985, c 16,
§5; gen ch 1985; am L 1986, c 340, §5; am L 1989, c 14, §4(4); am L 1991, c
136, §1 and c 263, §8; am L 1992, c 102, §1; am L 1995, c 66, §8; am L 2003, c
135, §2; am L 2009, c 40, §1]

Note

The 2009 amendment applies to claims for refund made on or
after January 1, 2009. L 2009, c 40, §3.

Case Notes

Mentioned with respect to applicable period for bringing
action for refund of general excise taxes. 53 H. 1, 486 P.2d 396.

Prohibits original actions by insurers to recover moneys paid
to State without protest under §431-318. 5 H. App. 122, 678 P.2d 1101.