(a) Taxes erroneously paid shall not be refunded unless a claim for a refund is made. Claims for refund of municipal income taxes must be brought within three (3) years after the tax was due or the return was filed, whichever is later. However, the following shall apply regarding refunds of tax withheld from non-qualified deferred compensation plans (NDCP):
(1) A taxpayer may be eligible for a refund if the taxpayer has suffered a loss from a NDCP. The loss will be considered sustained only in the taxable year in which the taxpayer receives the final distribution of money and property pursuant to the NDCP. Full loss is sustained if no distribution of money and property will be made by the NDCP.
(2) A taxpayer who receives income as a result of payments from a NDCP, and that income is less than the amount of income deferred to the NDCP and upon which municipal tax was withheld, then a refund will be issued on the amount representing the difference between the deferred income that was taxed and the income received from the NDCP. If different tax rates applied to the tax years in which there were deferrals, a weighted average of the different tax rates will be used to compute the refund amount.
(3) Refunds shall be allowed only if the loss is attributable to the bankruptcy of the employer who had established the NDCP, or the employee's failure or inability to satisfy all of the employer's terms and conditions necessary to receive the nonqualified compensation.
(b) Should it appear that any taxpayer has paid more than the amount of the tax to which the City is entitled under the provisions of this chapter or should it be found that the tax paid or withheld was done so in error, a refund of the amount so over paid shall be made, provided that a timely claim for refund has been filed by the taxpayer.
(c) For tax years prior to 2004, the Administrator or an authorized agent may extend the time for filing of the annual return of the taxpayer for a period equivalent to any extension granted by the Internal Revenue Service for the filing of the federal income tax return for the applicable tax year provided such request for extension is filed not later than the annual return date for the applicable tax year. For taxable year 2004 the extended due date shall be the last day of the month following the month to which the due date of the federal income tax return has been extended. For taxable years subsequent to 2004 the extended due date shall be the last day of the month to which the due date of the federal income tax return has been extended. The Administrator may deny the extension if the taxpayer's income tax account with the City is delinquent in any way.
(d) A copy of the Federal extension request must be filed with the City by the original due date of the City income tax return. The Administrator may require a tentative return, accompanied by payment of the amount of tax shown to be due thereon by the date the return is normally due. No penalty shall be assessed in those cases in which the return is filed and the final tax paid within the period as extended.
(e) Income tax that has been deposited with the City, but should have been deposited with another municipality, is allowable by the City as a refund but is subject to the three-year limitation on refunds. Income tax that should have been deposited with the City, but was deposited with another municipality, shall be subject to recovery by the City. The City will allow a non- refundable credit for any amount owed the City that is in excess of the amount to be refunded by the other municipality, as long as the tax rate of the other municipality is the same or higher than the City's tax rate. If the City's tax rate is higher, the tax representing the net difference of the
rates is also subject to collection by the City.
(Ord. 2004-26. Approved by voters 5-25-04.)