(A) (1) (a) Civil actions to recover municipal income taxes and penalties and interest on municipal income taxes shall be brought within the later of:
1. Three years after the tax was due or the return was filed, whichever is later; or
2. One year after the conclusion of the qualifying deferral period, if any.
(b) The time limit described in division (A)(1)(a) above may be extended at any time if both the Tax Administrator and the employer, agent of the employer, other payer or taxpayer consent in writing to the extension. Any extension shall also extend for the same period of time the time limit described in division (C) below.
(2) As used in this section, QUALIFYING DEFERRAL PERIOD means a period of time beginning and ending as follows:
(a) Beginning on the date a person who is aggrieved by an assessment files with a local Board of Tax Review the request described in R.C. § 718.11. That date shall not be affected by any subsequent decision, finding, or holding by any administrative body or court that the local Board of Tax Review with which the aggrieved person filed the request did not have jurisdiction to affirm, reverse or modify the assessment or any part of that assessment; and
(b) Ending the later of the sixtieth day after the date on which the final determination of the local board of tax review becomes final or, if any party appeals from the determination of the local board of tax review, the sixtieth day after the date on which the final determination of the local board of tax review is either ultimately affirmed in whole or in part or ultimately reversed and no further appeal of either that affirmation, in whole or in part, or that reversal is available or taken.
(B) Prosecutions for an offense made punishable under a resolution or ordinance imposing an income tax shall be commenced within three years after the commission of the offense, provided that in the case of fraud, failure to file a return or the omission of 25% or more of income required to be reported, prosecutions may be commenced within six years after the commission of the offense.
(C) A claim for a refund of municipal income taxes shall be brought within the time limitation provided in R.C. § 718.19.
(D) Interest shall be allowed and paid on any overpayment by a taxpayer of any municipal income tax obligation from the date of the overpayment until the date of the refund of the overpayment, except that if any overpayment is refunded within 90 days after the final filing date of the annual return or 90 days after the completed return is filed, whichever is later, no interest shall be allowed on the refund. For the purpose of computing the payment of interest on amounts overpaid, no amount of tax for any taxable year shall be considered to have been paid before the date on which the return on which the tax is reported is due, without regard to any extension of time for filing that return. Interest shall be paid at the interest rate described in R.C. § 718.27(A)(5).
(E) Within 60 days after the final determination of any federal or state tax liability affecting the taxpayer’s municipal tax liability, that taxpayer shall make and file an amended municipal return showing income subject to the municipal income tax based upon such final determination of federal or state tax liability, and pay any additional municipal income tax shown due thereon or make a claim for refund of any overpayment, unless the tax or overpayment is less than $10.
(F) (1) Notwithstanding the fact that an appeal is pending, the petitioner may pay all or a portion of the assessment that is the subject of the appeal. The acceptance of a payment by the municipal corporation does not prejudice any claim for refund upon final determination of the appeal.
(2) If, upon final determination of the appeal, an error in the assessment is corrected by the Tax Administrator, upon an appeal so filed or pursuant to a final determination of the local board of tax review, created under R.C. § 718.11, of the state board of tax appeals, or any court to which the decision of the State board of tax appeals has been appealed, so that the amount due from the party assessed under the corrected assessment is less than the amount paid, there shall be issued to the appellant or to the appellant’s assigns or legal representative a refund in the amount of the overpayment as provided by R.C. § 718.19, with interest on that amount as provided by division (D) above.
(G) No civil action to recover municipal income tax or related penalties or interest shall be brought during either of the following time periods:
(1) The period during which a taxpayer has a right to appeal the imposition of that tax or interest or those penalties; and
(2) The period during which an appeal related to the imposition of that tax or interest or those penalties is pending.
(R.C. § 718.12) (Prior Code, § 35.19.01)