§235-111  Limitation period for assessment,levy, collection, or credit; net operating loss carrybacks.  (a)  Generalrule.  The amount of income taxes imposed by this chapter (also the amount ofincome taxes imposed by any preceding law of the State) and the liability ofany employer in respect of wages, shall be assessed or levied and theoverpayment, if any, shall be credited within three years after filing of thereturn for the taxable year, or within three years of the due date prescribedfor the filing of the return, whichever is later.  No proceeding in courtwithout assessment for the collection of the taxes or the enforcement of theliability shall be begun after the expiration of the period.  Where theassessment of the tax imposed by this chapter has been made within the periodof limitation applicable thereto, the tax may be collected by levy or by aproceeding in court under chapter 231; provided that the levy is made or theproceeding was begun within fifteen years after the assessment of the tax.  Forany tax that has been assessed prior to July 1, 2009, the levy or proceedingshall be barred after June 30, 2024.

Notwithstanding any otherprovision to the contrary in this section, the limitation on collection afterassessment in this section shall be suspended for the period:

(1)  The taxpayer agrees tosuspend the period;

(2)  The assets of the taxpayerare in control or custody of a court in any proceeding before any court of theUnited States or any state, and for six months thereafter;

(3)  An offer in compromiseunder section 231-3(10) is pending; and

(4)  During which the taxpayeris outside the State for a continuous period of at least six months; providedthat if at the time of the taxpayer's return to the State the period oflimitations on collection after assessment would expire before the expirationof six months from the date of the taxpayer's return, the period shall notexpire before the expiration of the six months.

(b)  Limitations on credit or refund.  Claimfor credit or refund of an overpayment of any tax imposed by this chapter shallbe filed by the taxpayer or employer within three years from the time thereturn was filed or from the due date prescribed for the filing of the return,or within two years from the time the tax was paid, whichever is later.  Forthe purposes of this section, taxes paid before the due date of the returnshall be deemed to have been paid on the due date of the return determinedwithout regard to any extensions.

(1)  If the claim was filed by the taxpayer during thethree-year period prescribed in this subsection, the amount of the credit orrefund shall not exceed the portion of the tax paid within the period,immediately preceding the filing of the claim, equal to three years plus theperiod of any extension of time for filing the return.

(2)  If the claim was not filed within the three-yearperiod, the amount of the credit or refund shall not exceed the portion of thetax paid during the two years immediately preceding the filing of the claim.

(3)  If no claim was filed, the credit or refund shallnot exceed the amount which would be allowable under paragraph (1) or (2), asthe case may be, if the claim was filed on the date the credit or refund isallowed.

(c)  Exceptions; fraudulent return or no return. In the case of a false or fraudulent return with intent to evade tax orliability, or of a failure to file return, the tax or liability may be assessedor levied at any time; provided that the burden of proof with respect to theissues of falsity or fraud and intent to evade tax shall be upon the State.

(d)  Extension by agreement.  Where, before theexpiration of the time prescribed in subsection (a) for the assessment, levy,and collection of the tax or liability, or in subsection (b) for the credit orrefund of an overpayment, both the department and the taxpayer or employer haveconsented in writing to its assessment or levy after that date, the tax orliability may be assessed or levied or the overpayment, if any, may be creditedat any time prior to the expiration of the period previously agreed upon.  Theperiod so agreed upon may be extended by the subsequent agreements in writingmade before the expiration of the period previously agreed upon.

(e)  Overpayment of carrybacks.  If an overpaymentresults from a net operating loss carryback, the statute of limitations insubsections (a) and (b) shall not apply.  The overpayment shall be creditedwithin three years of the due date prescribed for filing the return (includingextensions thereof) for the taxable year of the net operating loss, or theperiod agreed to under subsection (d) with respect to the taxable year,whichever expires later. [L Sp 1957, c 1, pt of §2; am L Sp 1959 2d, c 1, §16;Supp, §121-45; HRS §235-111; am L 1969, c 274, §2; am L 1971, c 9, §1; gen ch1985; am L 1991, c 22, §1; am L 1993, c 257, §1; am L 1994, c 18, §1; am L2009, c 166; §6]

 

Note

 

  Applicability of 2009 amendment.  L 2009, c 166, §27.

 

Cross References

 

  Suspension of limitation period during bankruptcy proceedings,see §231-3.5.

 

Case Notes

 

  Applicable limitations period for refund claim for publicservice company taxes; when period starts to run.  68 H. 391, 716 P.2d 1138.