This Policy Statement has been cited in PS 2001(1)
PURPOSE: The purpose of this Policy Statement is to explain the Department’s policies on issuing refunds of sales and use taxes.
EFFECTIVE DATE: Effective upon issuance and applicable to all open tax periods, except that the procedures for filing protests of refund disallowances are applicable to refund claims filed on or after July 1, 1997.
STATUTORY AUTHORITY: Conn. Gen. Stat. §12-39s; §12-415; §12-418; §12-425, as amended by 1997 Conn. Pub. Acts 243, §56; and Conn. Gen. Stat. §12-431, as amended by 1997 Conn. Pub. Acts 243, §31.
Conn. Gen. Stat. §12-39s(b) provides that if the Commissioner of Revenue Services determines that any tax, penalty or interest has been paid more than once or has been erroneously or illegally collected or computed, the Commissioner may either credit the amount against tax amounts then due and payable, or may refund it. The statute provides further that if a person is required to collect tax from another person and has collected the tax from the other person, any amount credited or refunded by the Commissioner shall be credited or refunded to the other person.
Conn. Gen. Stat. §12-425 sets out the specific procedures and requirements for refunds of sales and use taxes. No refund or credit will be allowed unless a claim is filed with the Commissioner within three years from the last day of the month next succeeding the period for which the overpayment was made. However, if the refund or credit relates to tax paid for an assessment made under §12-415 or §12-416, the refund claim must be made within six months after the assessment becomes final. Every claim must be in writing and must state the specific grounds on which the claim is founded.
Thus, a written refund claim that is timely and that states the specific legal and factual reasons for the claim will be considered properly filed for purposes of the statute. However, the Department will require additional documentation to substantiate a refund claim. These additional requirements are described in this Policy Statement.
There is no statutory provision for interest to be paid by the Department on sales and use tax refunds.
REFUND CLAIMS BY RETAILERS: Retailers may submit refund claims on behalf of purchasers using the following procedures:
2. Refunds by Retailers to Purchasers. If the Department determines that a retailer’s documentation is adequate, and that a refund claim should be allowed:
C. Calculation Errors. A retailer may sometimes make calculation errors or otherwise erroneously overpay tax, where the retailer has not incorrectly charged tax to its purchasers. If this occurs, the retailer should amend its sales and use tax returns, and if the Department confirms that errors were made, sales tax will be refunded to the retailer. If the retailer has claimed the refund during an audit, a refund of tax overpaid because of a calculation error may be used to offset the audit assessment for purposes of reducing the interest or penalty on the assessment.
REFUND CLAIMS BY PURCHASERS:Purchasers may submit refund claims using the following procedures:
A. When the Purchaser is not Under Audit. A purchaser that is not under audit must file its refund claim in writing with the Audit Division, Refunds, Clearance and Adjustments Unit, 25 Sigourney Street, Hartford, CT 06106.
B. When the Purchaser is Under Audit. A purchaser that is under audit must file its refund claim in writing with the Audit Division’s Revenue Examiner assigned to the audit.
REFUNDS OF USE TAX PAID ON MOTOR VEHICLES, SNOWMOBILES, VESSELS AND AIRCRAFT: Conn. Gen. Stat. §12-431(a), as amended by 1997 Conn. Pub. Acts 243, §31, provides that purchasers of motor vehicles, snowmobiles, vessels and aircraft other than from licensed motor vehicle dealers or lessors, snowmobile dealers, licensed marine dealers or retailers of aircraft will not pay sales tax to the sellers, but must pay use tax on such items, unless the purchases are exempt under the statute.
Conn. Gen. Stat. §12-431(b) and Conn. Agencies Regs. §12-431(b)-1 provide that the value of a motor vehicle in the current month’s N.A.D.A. Official Used Car Guide, Eastern Edition, is presumed to be the total purchase price of the vehicle. When the motor vehicle is registered, the Department of Motor Vehicles will collect use tax on the greater of the N.A.D.A. book value or the amount paid for the motor vehicle. If the purchaser can prove to the satisfaction of the Commissioner that the purchase price was lower than the N.A.D.A. book value, the purchaser may claim a refund of the excess use tax paid, using CERT-106, Claim for Refund of Use Tax Paid on Motor Vehicle Purchased from Other than a Motor Vehicle Dealer, and following the instructions on the form.
A purchaser claiming any other refund of use tax paid on the purchase of a motor vehicle, or a refund of use tax paid on the purchase of a snowmobile, vessel or aircraft, must file the claim with the Audit Division, Refunds, Clearance and Adjustments Unit, 25 Sigourney Street, Hartford, CT 06106.
TIME LIMITS FOR FILING REFUND CLAIMS: Conn. Gen. Stat. §12-425(1) has two different time limits for filing refund claims. A refund claim is considered to be "filed" on the date the claim is postmarked or hand delivered and date stamped by the Department.
In general, a refund claim must be filed within three years from the last day of the month next succeeding the period for which the refund claim is made. For example, a refund claim filed on July 31, 1998, may apply to tax paid with respect to the monthly or quarterly return for the period ending June 30, 1995. Tax periods held open by waiver under Conn. Gen. Stat. §12-415(8) will also be held open for purposes of filing refund claims.
If a refund claim relates to tax paid for an assessment made under Conn. Gen. Stat. §12-415 or §12-416, the claim must be filed within six months after the assessment becomes final. Section 12-418 provides that an assessment becomes final 60 days after service of the notice of assessment on the taxpayer, unless a petition for reassessment (protest) is filed. If a protest is filed, the assessment becomes final one month after service on the taxpayer of the Department’s final determination of the protest. For example, a refund claim that relates to tax paid for an assessment under Conn. Gen. Stat. §12-415 must be filed within 60 days plus six months from the date of the first billing of the audit assessment. However, if the taxpayer pays the tax and protests the assessment, the refund claim must be filed within seven months (one month plus six months) from the date of the Appellate final determination letter.
A taxpayer filing a refund claim with respect to tax paid for an assessment made under Conn. Gen. Stat. §12-415 or §12-416 must file it in writing with the Audit Division, Refunds, Clearance and Adjustments Unit, 25 Sigourney Street, Hartford, CT 06106.
DISALLOWANCE OF REFUND CLAIMS: Conn. Gen. Stat. §12-425(5), as amended by 1997 Conn. Pub. Acts 243, §56, sets out the procedures to be followed by the Department and taxpayers in connection with the disallowance of refund claims.
The Department’s notice of disallowance of a refund claim will be in writing and will be mailed to the taxpayer. Service of the notice is complete at the time of deposit in the United States post office or mail box.
In the case of a refund disallowance by the Refunds, Clearance and Adjustments Unit of the Audit Division, the taxpayer may file a written protest of the disallowance, setting forth the grounds on which the protest is based, within 60 days of the Department’s mailing of the notice of disallowance to the taxpayer.
In the case of a refund disallowance by a Revenue Examiner when the taxpayer is under audit, the taxpayer may file a written protest of the disallowance, setting forth the grounds on which the protest is based, within 60 days of the Department’s mailing of the written notice of disallowance to the taxpayer. (NOTE: In some cases, the notice of refund disallowance may be mailed to the taxpayer before an audit assessment bill is sent, thereby setting a different 60-day period within which to protest the refund disallowance than the period within which to protest the audit assessment.)
A taxpayer should address its protest of a refund disallowance to the Commissioner of Revenue Services, Appellate Division, 25 Sigourney Street, Hartford, CT 06106.
Within one month of the Department’s mailing of a notice of final determination following a protest of a refund disallowance, the taxpayer may appeal the determination to the Superior Court, under the procedures set forth in Conn. Gen. Stat. §12-422.
THE "BUY CONNECTICUT" REFUND PROVISION: The "Buy Connecticut" provision, 1997 Conn. Pub. Acts 243, §48, contains special rules to be followed to obtain refunds of sales and use taxes paid on tangible personal property to be transported outside Connecticut by businesses for exclusive use outside the state. See Special Notice 98(10), The "Buy Connecticut" Provision, for details.
EFFECT ON OTHER DOCUMENTS: This Policy Statement supersedes Policy Statement No. 91-3, Procedures Followed in Allowing or Disallowing Claims for Refund of Sales and Use Taxes that Purportedly Have Been Overpaid.
EFFECT OF THIS DOCUMENT: A Policy Statement is a document that explains in depth a current Department policy or practice affecting the liability of taxpayers. Unlike a Ruling, a Policy Statement does not apply a policy or practice to a specific set of facts but it may be referred to for general guidance by taxpayers. Unlike a Special Notice, it does not announce a new policy or practice in response to changes in state or federal laws or regulations or to judicial decisions.
FOR FURTHER INFORMATION: Please call the Department of Revenue Services during business hours, Monday through Friday:
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