(a)(1) If any tax has been overpaid, the taxpayer may file a claim for refund in writing with the commissioner within three years from the due date for which such overpayment was made, stating the specific grounds upon which the claim is founded, provided if the commissioner has extended the time for the filing of an income tax return by the taxpayer, the taxpayer may file a claim for refund within three years after the date on which the income tax return is filed by the taxpayer or within three years after the extended due date of the income tax return, whichever is earlier. Not later than ninety days following receipt of such claim for refund the commissioner shall determine whether such claim is valid and, if so, said commissioner shall notify the State Comptroller of the amount of such refund and the State Comptroller shall draw an order on the State Treasurer in the amount thereof for payment to the taxpayer. For purposes of this section, a claim for refund that is filed before the last day prescribed by law or by a regulation adopted pursuant to law for the filing of an income tax return, determined without regard to any extension of time for filing, shall be deemed to be filed on such last day. To the amount of such refund, there shall be added interest at the rate of two-thirds of one per cent for each month or fraction thereof which elapses between (A) the ninetieth day following receipt by the commissioner of such claim for refund on a permitted form, containing the taxpayer's name, address and Social Security number or federal employer identification number, the required signature, and sufficient required information, whether on the return or on required attachments, to permit the mathematical verification of tax liability shown on the return, and (B) the date of notice by the commissioner that such refund is due. Failure to file a claim within the time prescribed in this section constitutes a waiver of any demand against the state on account of overpayment. If the commissioner determines that such claim is not valid, either in whole or in part, said commissioner shall mail notice of the disallowance in whole or in part of the claim to the claimant and such notice shall set forth briefly the commissioner's findings of fact and the basis of disallowance in each case decided in whole or in part adversely to the claimant. Sixty days after the date on which it is mailed, a notice of proposed disallowance shall constitute a final disallowance except only for such amounts as to which the claimant has filed, as provided in subdivision (2) of this subsection, a written protest with the commissioner.

(2) On or before the sixtieth day after the mailing of the proposed disallowance, the claimant may file with the commissioner a written protest against the proposed disallowance in which the claimant sets forth the grounds on which the protest is based. If a protest is filed, the commissioner shall reconsider the proposed disallowance and, if the claimant has so requested, may grant or deny the claimant or the claimant's authorized representatives an oral hearing.

(3) The commissioner shall mail notice of his determination to the claimant, which notice shall set forth briefly the commissioner's findings of fact and the basis of decision in each case decided in whole or in part adversely to the claimant.

(4) The action of the commissioner on the claimant's protest shall be final upon the expiration of one month from the date on which he mails notice of his action to the claimant unless within such period the claimant seeks judicial review of the commissioner's determination pursuant to section 12-730.

(b) (1) Notwithstanding the three-year limitation provided by subsection (a) of this section, if a taxpayer has timely complied with the requirements of subsection (b) of section 12-727, and, as a direct result of the change to or correction of the taxpayer's federal income tax return by the United States Internal Revenue Service or other competent authority, or as a direct result of a renegotiation of a contract or subcontract with the United States, the tax that has previously been reported to be due on a tax return under this chapter has been overpaid, or as a direct result of an amendment by the taxpayer of the taxpayer's federal income tax return, the tax that has previously been reported to be due on a tax return under this chapter has been overpaid, any claim for refund subsequently filed by such taxpayer will be deemed to be timely filed.

(2) Notwithstanding the three-year limitation provided by subsection (a) of this section, if a taxpayer has timely complied with the requirements of subsection (b) of section 12-704 and as a direct result of the change to or correction of taxpayer's income tax return by the tax officers or other competent authority of another state of the United States or a political subdivision thereof or the District of Columbia, the tax that has previously been reported to be due on a tax return under this chapter has been overpaid, or as a direct result of an amendment by the taxpayer of the taxpayer's income tax return to another state of the United States or a political subdivision thereof or the District of Columbia, the tax that has previously been reported to be due on a tax return under this chapter has been overpaid, any claim for refund subsequently filed by such taxpayer will be deemed to be timely filed.

(June Sp. Sess. P.A. 91-3, S. 83, 168; May Sp. Sess. P.A. 92-5, S. 22, 37; P.A. 95-26, S. 43, 52; P.A. 97-243, S. 63, 67; P.A. 98-244, S. 32, 35; P.A. 00-174, S. 43, 83.)

History: June Sp. Sess. P.A. 91-3, S. 83, effective August 22, 1991, and applicable to taxable years of taxpayers commencing on or after January 1, 1991; May Sp. Sess. P.A. 92-5 made various technical and minor changes and added Subsec. (b), effective June 19, 1992, and applicable to taxable years of taxpayers commencing on or after January 1, 1992; P.A. 95-26 amended Subsec. (a) to lower interest rate from 0.75% to 0.66% and to provide that a return filed before the last day prescribed by law or regulation is deemed as filed on the last day, effective July 1, 1995, and applicable to taxes due and owing on or after July 1, 1995, whether or not those taxes first became due before said date; P.A. 97-243 amended Subsec. (a) to require claim for refund on a form containing name, address, Social Security number or federal employer identification number, signature and sufficient information to verify tax liability, to provide for an administrative hearing with the department before taking an appeal to the Superior Court, establish the time for filing a claim and made technical changes, effective July 1, 1997, and applicable to claims for refund filed years commencing on or after said date; P.A. 98-244 added Subsec. (b)(2) providing that a claim for refund is timely filed if requirements of Sec. 12-704 are met, numbered existing text as Subdiv. (1) and made technical changes, effective June 8, 1998, and applicable to taxable years commencing on or after January 1, 1998; P.A. 00-174 amended Subdiv. (a)(1) to add provisions re filing a claim for refund in the case of an extension of filing and made a technical change for purposes of gender neutrality, effective May 26, 2000, and applicable to returns for taxable years commencing on or after January 1, 2000.

Cited. 44 CS 126.