GENERAL ASSEMBLY OF NORTH CAROLINA
1993 SESSION

CHAPTER 315
HOUSE BILL 173

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.
					."
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 as soon as possible together with any applicable 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) from the date that interest begins to accrue until a refund is paid.  A refund is considered paid on a date determined by the Secretary that is no sooner than five days after a refund check is mailed.
Interest on an overpayment of a tax, other than a tax levied under Article 4 of this Chapter, accrues from a date 90 days after the date the tax was originally paid by the taxpayer until the refund is paid.  Interest on an overpayment of a tax levied under Article 4 of this Chapter accrues from a date 45 days after the latest of the following dates until the refund is paid:
(1)	The date the final return was filed.
(2)	The date the final return was due to be filed.
(3)	The date of the overpayment.
The date of an overpayment of a tax levied under Article 4 of this Chapter is determined in accordance with section 6611(d), (f), (g), and (h) of the Code.
(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 reflected in final returns filed on or after the date of ratification.
In the General Assembly read three times and ratified this the 9th day of July, 1993.

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Dennis A. Wicker
President of the Senate

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Daniel Blue, Jr.
Speaker of the House of Representatives