If it appears, after claim therefor filed with the Department, that an amount of tax or penalty has been paid which was not due under this Act, whether as the result of a mistake of fact or an error of law, except as hereinafter provided, then the Department shall issue a credit memorandum or refund to the person who made the erroneous payment or, if that person has died or become a person under legal disability, to his or her legal representative, as such

Sec. 9d. If it appears, after claim therefor filed with the Department, that an amount of tax or penalty has been paid which was not due under this Act, whether as the result of a mistake of fact or an error of law, except as hereinafter provided, then the Department shall issue a credit memorandum or refund to the person who made the erroneous payment or, if that person has died or become a person under legal disability, to his or her legal representative, as such. If it is determined that the Department should issue a credit or refund under this Act, the Department may first apply the amount thereof against any amount of tax or penalty due under this Act or under the Cigarette Use Tax Act from the person entitled to such credit or refund. For this purpose, if proceedings are pending to determine whether or not any tax or penalty is due under this Act or under the Cigarette Use Tax Act from such person, the Department may withhold issuance of the credit or refund pending the final disposition of such proceedings and may apply such credit or refund against any amount found to be due to the Department under this Act or under the Cigarette Use Tax Act as a result of such proceedings. The balance, if any, of the credit or refund shall be issued to the person entitled thereto. If no tax or penalty is due and no proceeding is pending to determine whether such taxpayer is indebted to the Department for tax or penalty, the credit memorandum or refund shall be issued to the claimant; or (in the case of a credit memorandum) the credit memorandum may be assigned and set over by the lawful holder thereof, subject to reasonable rules of the Department, to any other person who is subject to this Act or the Cigarette Use Tax Act, and the amount thereof shall be applied by the Department against any tax or penalty due or to become due under this Act or under the Cigarette Use Tax Act from such assignee. As to any claim filed hereunder with the Department on and after each January 1 and July 1, no amount of tax or penalty erroneously paid (either in total or partial liquidation of a tax or penalty under this Act) more than 3 years prior to such January 1 and July 1, respectively, shall be credited or refunded, except that if both the Department and the taxpayer have agreed to an extension of time to issue a notice of tax liability under this Act, the claim may be filed at any time prior to the expiration of the period agreed upon. Notwithstanding any other provision of this Act to the contrary, for any period included in a claim for credit or refund for which the statute of limitations for issuing a notice of tax liability under this Act will expire less than 6 months after the date a taxpayer files the claim for credit or refund, the statute of limitations is automatically extended for 6 months from the date it would have otherwise expired. If the Department approves a claim for stamps affixed to a product returned to a manufacturer or for replacement of stamps, the credit memorandum shall not exceed the face value of stamps originally affixed, and replacement stamps shall be issued only in an amount equal to the value of the stamps previously affixed. Higher denomination stamps shall not be issued as replacements for lower value stamps. Distributors must prove the face value of the stamps which have been destroyed or returned to manufacturers when filing claims. Any credit or refund that is allowed under this Act shall bear interest at the rate and in the manner set forth in the Uniform Penalty and Interest Act. In case the Department determines that the claimant is entitled to a refund, such refund shall be made only from such appropriation as may be available for that purpose. If it appears unlikely that the amount appropriated would permit everyone having a claim allowed during the period covered by such appropriation to elect to receive a cash refund, the Department, by rule or regulation, shall provide for the payment of refunds in hardship cases and shall define what types of cases qualify as hardship cases. If the Department approves a claim for the physical replacement of cigarette tax stamps, the Department (subject to the same limitations as those provided for hereinbefore in this Section) may issue an assignable credit memorandum or refund to the claimant or to the claimant's legal representative. The provisions of Sections 6a, 6b and 6c of the Retailers' Occupation Tax Act which are not inconsistent with this Act, shall apply, as far as practicable, to the subject matter of this Act to the same extent as if such provisions were included herein. (Source: P.A. 102-40, eff. 6-25-21.)