GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1993

H	1 

HOUSE BILL 173

Short Title:  Interest on Income Tax Refunds.	(Public)
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Sponsors: Representatives Luebke, Gamble, Jarrell, Justus, Tallent; and Gottovi.
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Referred to:  Finance.
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February 17, 1993

A BILL TO BE ENTITLED
AN ACT TO PROVIDE THAT THE STATE SHALL PAY INTEREST ON INCOME TAX REFUNDS NOT REFUNDED TO THE TAXPAYER WITHIN FORTY-FIVE DAYS AFTER THE RETURN WAS FILED OR DUE TO BE FILED, WHICHEVER IS LATER.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 105-163.43 reads as rewritten:
"§ 105-163.43. Overpayment refunded.
If the amount of estimated tax paid under this Article exceeds the taxes against which the estimated tax is credited pursuant to this Article, the excess is considered an overpayment by the taxpayer and shall be refunded as provided in Article 9 of this Chapter."
Sec. 2.  G.S. 105-163.16 reads as rewritten:
"§ 105-163.16. Overpayment refunded.
	If the amount of wages withheld at the source under G.S. 105-163.2 exceeds the tax imposed by Article 4 of this Chapter against which the withheld tax is credited under G.S. 105-163.10, the excess is considered an overpayment by the employee.  If the amount of estimated tax paid under G.S. 105-163.15 exceeds the taxes imposed by Article 4 of this Chapter against which the estimated tax is credited under the provisions of this Article, the excess is considered an overpayment by the taxpayer.  An overpayment shall be refunded as provided in Article 9 of this Chapter.
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Sec. 3.  G.S. 105-266 reads as rewritten:
"§ 105-266.  Overpayment of taxes to be refunded with interest.
(a)	Refund. –  If the Secretary discovers that a taxpayer has overpaid the correct amount of a tax, that overpayment shall be refunded to the taxpayer within 60 days after it is ascertained together with interest.  The Secretary shall not refund an overpayment before the taxpayer has filed the final return for the tax period.  The Secretary may not refund any of the following:
(1)	An overpayment set off under Chapter 105A, the Setoff Debt Collection Act, or under another setoff debt collection program authorized by law.
(2)	An income tax overpayment the taxpayer has elected to apply to another purpose as provided in this Article.
(3)	An individual income tax overpayment of less than one dollar ($1.00) or another tax overpayment of less than three dollars ($3.00), unless the taxpayer makes a written demand for the refund.
(b)	Interest. – An overpayment of tax bears interest at the rate established in G.S. 105-241.1(i).  Interest on an overpayment of a tax levied under Article 4 of this Chapter accrues from a date 45 days after the latest of (i) the date the final return was filed, (ii) the date the final return was due to be filed, or (iii) the date of the overpayment, until the refund is paid.  Interest on an overpayment of another tax accrues from a date 90 days after the date the tax was originally paid by the taxpayer until the refund is paid.
For the purpose of this section, the date a tax is paid is determined in accordance with section 6611(d), (f), (g), and (h) of the Code.  For the purpose of this section, a refund is paid on a date determined by the Secretary preceding the date the refund check is mailed by not more than 30 days.
(c)	Statute of Limitations. –No overpayment shall be refunded, whether upon discovery or receipt of written demand, if the discovery is not made or the demand is not received within three years after the date set by the statute for the filing of the return or within six months after the payment of the tax alleged to be an overpayment, whichever is later.
(d)	Effect of Refund. – A refund made under this section does not absolve the taxpayer of a tax liability that may in fact exist; the Secretary may make an assessment for any deficiency as provided in this Article.
(e)	Scope. –   This section does not apply to interest required under G.S. 105-267.  This section applies to a refund payable to a husband and wife who filed a joint return."
Sec. 4.  This act is effective upon ratification and applies to overpayments made on or after the date of ratification.