HRS § 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 [paragraph] (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.
(c) This subsection shall apply to all taxes.
(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 exceeds the amount determined to be the correct amount
of the tax due, whether or not the tax was paid by installments, and the
taxpayer requests a refund of the overpayment, the amount of the overpayment
shall be refunded in the manner provided in subsection (c) within ninety days
of the due date of the tax return or the date the tax return is filed,
whichever is later; provided that interest on the overpayment shall be paid:
(A) To the taxpayer if the amount overpaid is
not refunded within ninety days; and
(B) At the rate of one-third of one per cent
of the refund amount for each month or fraction thereof after the ninety-day
period, until the refund and any applicable interest is paid to the taxpayer;
(2) If any overpayment of taxes results or arises
from:
(A) The taxpayer filing an amended return; or
(B) A determination made by the director; and
the overpayment is not shown on the original
return as filed by the taxpayer, the amount overpaid shall be refunded to the
taxpayer within ninety days from the due date of the original return or the
date the overpayment is discovered under subparagraphs (A) or (B), whichever
occurred later; provided that interest shall be paid to the taxpayer if the
amount overpaid is not refunded within ninety days and at the rate of one-third
of one per cent of the refund amount for each month or fraction thereof after
the ninety-day period, until the refund and any applicable interest is paid 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; and
(4) In the case of credit, interest shall be paid in
the same manner as paragraph (1).