(a) General rule. -- In the case of erroneous payment of the tax imposed by this article, or the erroneous payment of additions to tax, penalties or interest imposed, pursuant to article ten of this chapter, with respect to the tax imposed by this article, the Tax Commissioner shall, subject to the provisions of this section, refund to the taxpayer the amount of the erroneous payment or, if the taxpayer so elects, apply the same as a credit against the taxpayer's liability for this tax for other periods. The amount refunded or credited shall include any interest due the taxpayer under the provisions of section seventeen, article ten of this chapter.
(b) Claim for refund or credit. -- No refund or credit shall be made unless the taxpayer filed a timely claim for refund or credit with the Tax Commissioner setting forth the amount to be refunded along with the reason or reasons why the taxpayer believes the amount should be refunded, or credited to taxpayer's account, and a copy of any papers supporting the taxpayer's claim. A person against whom an assessment, or an administrative decision, has become final with respect to this tax is not entitled to pay the amount thereof and then file a claim for refund or credit of the amount paid. The Tax Commissioner shall determine the validity of the taxpayer's claim and notify the taxpayer in writing of his or her determination.
(c) Petition for refund or credit; hearing. -- If the taxpayer is not satisfied with the Tax Commissioner's determination of his or her claim for refund or credit, or if the Tax Commissioner has not determined the taxpayer's claim within ninety days after the claim was filed, the taxpayer may file with the Tax Commissioner, either by personal service or by certified mail, a petition for refund or credit: Provided, That no petition for refund or credit may be filed more than sixty days after the taxpayer is served with a notice of the denial of his or her claim. The petition for refund or credit shall be in writing, verified under oath by the taxpayer or his or her duly authorized agent having knowledge of the facts, and shall set forth with particularity the items of the determination objected to, together with the reasons for the objections. When a petition for refund or credit is properly filed, the procedures for hearing and for decision prescribed in section nine, article ten of this chapter shall be followed.
(d) Appeal. -- An appeal from the Tax Commissioner's decision upon the petition for refund or credit may be taken by the taxpayer in the same manner and under the same procedure as that set forth in section eleven, article ten of this chapter relating to an appeal from the Tax Commissioner's decision on a petition for assessment, but no bond shall be required of the taxpayer.
(e) Decision of the court. -- Whenever an appeal is to review an administrative decision on a petition for refund or credit, the court may determine the legal rights of the parties but in no event shall it enter a judgment for money.
(f) Refund made or credit established. -- The Tax Commissioner shall promptly issue his or her requisition on the treasury or establish a credit, as requested by the taxpayer, for any amount finally administratively or judicially determined to be an erroneous payment of any tax administered under this article. The Auditor shall issue his or her warrant on the treasurer for any refund requisitioned under this subsection payable to the taxpayer entitled to the refund, and the treasurer shall pay such warrant out of the fund into which the amount so refunded was originally paid.
(g) Forms for claim for refund or credit. -- The Tax Commissioner may prescribe by rule or regulation the forms for claims for refund or credit.
(h) Remedy exclusive. -- The procedure provided by this section constitutes the sole method of obtaining any refund or any credit, it being the intent of this section that the procedure set forth in this article is in lieu of the procedure set forth in section fourteen, article ten of this chapter, and in lieu of any other remedy, including the uniform declaratory judgments act embodied in article thirteen, chapter fifty-five of this code and the provisions of section two-a, article one of this chapter.
(i) Erroneous refund made or credit established. -- If the Tax Commissioner believes that an erroneous refund has been made or an erroneous credit has been established, he or she may proceed to investigate and may make an assessment to recover the amount of such refund or credit within two years after the date the refund was paid or the credit was established, unless a fraudulent claim was filed. In that event, the two statutes of limitations shall be six years.
(j) Limitation on claim for refund or credit.
(1) General rule. -- Whenever a taxpayer claims to be entitled to a refund or credit for erroneous payment of any tax, additions to tax, penalties or interest paid into the treasury of this state, the taxpayer shall, except as provided in subsection (d) of this section, file his or her claim within three years after the due date of the return in respect of which the tax was imposed or within two years from the date the tax was paid, whichever of such periods expires later, or if no return was filed by the taxpayer, within two years from the time the tax was paid, and not thereafter.
(2) Extension of time for filing claim by agreement. -- The Tax Commissioner and the taxpayer may enter into written agreement to extend the period within which the taxpayer may file a claim for refund or credit, which period shall not exceed two years. The period agreed upon may be extended for additional periods not in excess of two years each by subsequent agreements in writing made before the expiration of the period previously agreed upon.
(3) Special rule where agreement to extend time for making an assessment. -- Notwithstanding subdivisions (1) and (2) of this subsection, if an agreement is made under the provisions of section fifteen of this article extending the time period in which an assessment of a tax can be made, then the time period for filing a claim for refund or credit for an erroneous payment of the same tax made during the periods subject to assessment under the erroneous payment of this tax made during the periods subject to assessment under the extension agreement shall also be extended for the period of the extension agreement plus ninety days.
(k) "Erroneous payment" defined. -- The term erroneous payment means a payment of the tax imposed by this article or the additions to tax, penalties or interest imposed with respect to this tax pursuant to article ten of this chapter, when such payment is due to a mathematical or clerical error or when such payment is collected after the period of limitation properly applicable thereto.