(a) Unpaid taxes recoverable as other debts.
(1) All taxes imposed by this chapter shall be collectible, together with any interest and penalties thereon, by suit, as other debts of like amount are recoverable. Such suit shall not be made after three years from the time the return was due or filed, whichever is later. However, in the case of fraud, omission of 25% or more of income subject to this tax, or failure to file a return, all additional assessments shall be made and all prosecutions to recover municipal income taxes and penalties and interest thereon shall be brought within six years after the tax was due or the return was filed, whichever is later. In those cases in which a Commissioner of Internal Revenue and the taxpayer have executed a waiver of the federal statute of limitations, the period within which an additional assessment may be made by the Administrator shall be one year from the time of the final determination of the federal tax liability.
(2) When deemed necessary, the Administrator may outsource the collection of delinquent accounts to a law firm or collection agency. The fees charged for outsourcing, including related court costs, shall be assessed and added to the delinquent taxpayers’ liability.
(b) Refunds of taxes erroneously paid. Taxes erroneously paid shall not be refunded unless a claim for refund is made within three years from the date on which such payment was made or the return was due, or within three months after the final determination of the federal tax liability, whichever is later. In addition, 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 an 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 an 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 deferrals, a weighted average of the different tax rates will be used to compute the refund amount; and
(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 non-qualified compensation.
(c) Refunds; recovery. 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.
(d) Overpayments of withheld tax. Overpayments of withheld tax that have resulted due to incorrect withholding of an employee by an employer, and are not due as a result of excess withholding requested by the employee, shall be refunded to the employer. It shall be the responsibility of the employer, and not the city, to refund such overpayment to the employee. However, nothing in this division (d) shall affect the right of a nonresident employee to apply directly to the city for refund of income tax withheld for days worked out of Solon.
(e) Payments on delinquent amounts. Payments on delinquent amounts shall be applied in the following order:
(1) To the taxes owed for any previous year in the order in which such taxes became due;
(2) To unpaid penalty and interest assessments in the order in which such assessments became due; and
(3) To the taxpayer’s current estimated tax liability.
(f) Amounts of less than $1. Amounts of less than $1 shall not be collected or refunded.
(Ord. 2007-217, passed 10-15-2007)