§ 12-35f — Offset of tax refunds.

(a) For purposes of this section: (1) “Taxpayer” means any person identified by a claimant state to the Commissioner of Revenue Services under this section as owing taxes to such claimant state, including, in the case of a refund of any tax imposed upon the income of individuals, the spouse of the taxpayer, where such taxpayer filed a joint return with such spouse; (2) “Claimant state” means any other state or the District of Columbia that extends a like comity for the collection of taxes owed to this state; (3) “Taxes” means any amount of tax imposed under the laws of the claimant state, including additions to tax for penalties and interest, which is finally due and payable to the claimant state, and with respect to which any administrative or judicial remedies, or both, have been exhausted or have lapsed, and which is legally enforceable under the laws of the claimant state, whether or not there is an outstanding judgment for such sum; (4) “Refund” means any taxpayer's claim to repayment of an overpayment of a tax determined by this state to be owed to the taxpayer by this state; and (5) “Tax officer” means a unit or official of a claimant state, or the duly authorized agent of such unit or official, charged with the imposition, assessment or collection of taxes of that state. (b) (1) Upon the request and certification of the tax officer of a claimant state to the Commissioner of Revenue Services that a taxpayer owes taxes to such claimant state, the commissioner may withhold all or a portion of any refund to which such taxpayer would otherwise be entitled and pay over such withheld amount to the claimant state in accordance with the provisions of this section. The commissioner shall not withhold a refund unless the laws of the claimant state allow the Commissioner of Revenue Services to certify that a taxpayer owes taxes to this state and to request the tax officer of the claimant state to withhold all or a portion of any refund to which such taxpayer would otherwise be entitled, and provide for the payment over of such withheld amount to this state. (2) Such certification shall include the full name and address of the taxpayer; the taxpayer's Social Security number or federal employer identification number; the amount of taxes owed to such state; and a statement that any administrative or judicial remedies, or both, have been exhausted or have lapsed and that the amount of taxes is legally enforceable under the laws of such state. (3) Upon receipt by the commissioner of the required certification, the commissioner shall notify the taxpayer, if the taxpayer is otherwise entitled to a tax refund from this state, that the commissioner has received a request from the claimant state to withhold all or a portion of any refund, that the taxpayer has the right to protest the withholding of the refund, that failure to file a protest in accordance with subdivision (4) of this subsection shall constitute a waiver of any demand against this state on account of such withheld amount and that the withheld amount will be paid over to the claimant state. Thirty days after the date on which a notice under this subdivision is mailed, such notice shall be final except only for such amounts as to which the taxpayer has filed, as provided in subdivision (4) of this subsection, a written protest with the Commissioner of Revenue Services. (4) Any taxpayer notified in accordance with subdivision (3) of this subsection may, on or before the thirtieth day after the mailing of such notice by the Commissioner of Revenue Services, protest the withholding of all or a portion of a refund by filing with the commissioner a written protest in which the taxpayer shall set forth the grounds on which the protest is based. If a timely protest is filed, the commissioner shall impound the claimed amount of the refund, pay to the taxpayer the unclaimed amount, if any, of the refund, send a copy of the protest to the claimant state for determination of the protest on its merits in accordance with the laws of that state, and pay over to the taxpayer the impounded amount if the claimant state shall fail on or before the forty-fifth day after the sending of the copy of the protest by the commissioner to such claimant state to recertify to the commissioner that the claimant state has reviewed the stated grounds on which the protest is based, and to recertify the amount of taxes which is finally due and payable to the claimant state, which is legally enforceable under the laws of the claimant state against the taxpayer, and with respect to which any administrative or judicial remedies, or both, have been exhausted or have lapsed. (5) Where the amount withheld in accordance with this subsection is a refund of any tax imposed upon the income of individuals and in connection with which the taxpayer filed a joint return with his or her spouse, and the spouse is not a taxpayer, the spouse shall have the right to be paid his or her portion of the refund by establishing his or her share of such refund. The amount of such spouse's share of such refund shall be established by recomputing the spouse's share of the joint liability and subtracting that amount from the taxpayer's contribution toward the joint liability, provided the amount of the overpayment refunded to the spouse shall not exceed the amount of the joint overpayment. (6) Subject to the provisions of subdivisions (3), (4) and (5) of this subsection, the commissioner shall pay over to the claimant state the entire amount withheld or the amount certified, whichever is less; pay any refund in excess of the certified amount to the taxpayer; and, if the amount certified exceeds the amount withheld, withhold amounts from subsequent refunds due to the taxpayer, provided the claimant state agrees to withhold subsequent refunds due to taxpayers certified to the claimant state by the commissioner. (c) The commissioner may enter into agreements with the tax officers of claimant states relating to procedures and methods to be employed by a claimant state with respect to the operation of this section; safeguards against the disclosure or inappropriate use of any information that identifies, directly or indirectly, a particular taxpayer obtained or maintained pursuant to this subsection; and a minimum amount of taxes owed by a taxpayer to a claimant state, so that, if a taxpayer owes less than such amount to such claimant state, the claimant state will not avail itself of the provisions of this section with respect to that taxpayer. (d) The collection procedures prescribed by this section shall not be construed as a substitute for any other remedy available by law to the Commissioner of Revenue Services.

Legislative History

(P.A. 98-244, S. 2, 35; P.A. 11-61, S. 54; P.A. 17-105, S. 6.) History: P.A. 98-244 effective June 8, 1998; P.A. 11-61 amended Subsec. (b) to remove requirement that certification include detailed statement showing tax, interest and penalty in Subdiv. (2) and to require notification by commissioner if taxpayer is entitled to tax refund from this state, remove requirement that copy of certification by claimant state be included in notice and make technical changes in Subdiv. (3), effective June 21, 2011; P.A. 17-105 made technical changes in Subsec. (a)(2).