Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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Annotation 465.0014


465.0014 Limitation Period—Correction of Notice of Redetermination. The Board issued a determination against a taxpayer on April 25, 1990. The taxpayer petitioned the determination and, after an adjustment was made to the tax liability, a Notice of Redetermination dated January 24, 1994 was issued. That Notice redetermined the amount of tax due, but a computer operator input error was made on the interest portion of redetermination resulting in an overall credit balance. The error in the calculation of interest seemed to indicate that, although an amount of tax was redetermined against the taxpayer and it had not made any payment toward that amount, the taxpayer was entitled to a refund. The taxpayer filed no claim for refund nor was any amount ever refunded by the Board on this erroneous credit balance. The interest error was thereafter discovered and the taxpayer was notified that the Board intended to collect the amount of tax redetermined, plus interest as required by law. The taxpayer claimed that the statute of limitations had expired and the Board had no legal basis to reissue the redetermination.

The statute of limitations does not apply to the above situation and, even if it did, the Board is not barred from collecting the correct amount due. The determination in this case was issued on April 25, 1990 for the period of April 1, 1985 through December 31, 1987, well within the statutory period (the taxpayer had not filed returns). In this case, the taxpayer knew that there was a tax deficiency owed for unpaid taxes. Likewise, the taxpayer knew, or should have known, of the error in calculating interest which resulted in a credit balance since the taxpayer had not made any payment on the deficiency. Had taxpayer believed the credit balance to have been correct, it would have presumably filed a claim for refund of the amount of that credit balance. However, the filing of such a claim would have triggered the Board's review which would have resulted in the Board correcting the mistake. The taxpayer did not file such a claim. The taxpayer owes the amount of tax reflected in the Notice of Redetermination with interest thereon in accordance with law. No further determination is required. 1/23/97.