Seattle Rule 5-012      Refunds.

 

(1)  Introduction. This section explains the procedures relating to refunds or credits foroverpayment of taxes, penalties, or interest. It indicates the statutory period for refunds.

 

(2) Statute oflimitations for refunds or credits. Time limit for a tax refund or Credit.

Withthe exception of (a) and (b) of this subsection, no refund or credit may bemade for taxes, penalties, or interest paid more than four years prior to thebeginning of the calendar year in which a refund or credit application is made or examination of records is completed. See SMC5.55.100.

(a) The execution of awritten waiver shall extend the time for applying for, or making, a refund or credit of any taxes paid during, orattributable to, the years covered by the waiver if, prior to the expiration ofthe waiver period, an application for refund of such taxes is made by thetaxpayer or the Director discovers that a refund or credit is due.

(b) Ataxpayer who obtains a license and pays taxes, whether through voluntarycompliance or discovery, after having commenced doing business in the City, andlater finds that he or she has incorrectly reported the tax or license fee, mayapply for a refund of the overpaid taxes or fees within four years from date ofpayment of the license fees and taxes.  

 

(3)  Refund/credit procedures.  How Do I get a Refund orCredit?

      (a) Departmental review.  When the Department audits or examines thetaxpayer's records and determines the taxpayer has overpaid its taxes,penalties, or interest, the Department will issue a credit. 

 

      (b) Refund of audit assessment.   If the taxpayer locates additional recordswhich were not and could not have been presented to the auditor at the time ofthe audit, but would have reduced the tax, penalties, or interest liability ifthe records had been available, then the taxpayer may contact the Department'saudit section, file a petition for a refund or credit of overpaid amounts, andrequest that a re-examination of the appropriate records be performed.  A petition for a refund of amounts paidpursuant to an audit assessment must be received by the Department within thestatute of limitations for refund or credit and may not be based upon any legalissues that the taxpayer could have or should have raised in an appeal of theassessment.  The amount of refund of anaudit assessment is limited to the additional amount assessed and paid on auditand does not open up for re-examination the entire audit period. 

 

      (c) Taxpayer request.  When a taxpayer discovers that he or she hasoverpaid taxes, penalties, or interest, he or she may file an amended return oran application for refund or credit with the Department.  The application must be submitted within thestatute of limitations as provided in subsection (2). Refund application formsare available from the following sources:

 

            -The Department's internet web siteat http:// http://www.seattle.gov/business-license-tax

            -By facsimile by calling206-684-5170

            -By writing to:

             Refunds

             City of Seattle/ License TaxAdministration

             P.O. Box 34214

             Seattle, WA. 98124

 

             The application form should besubmitted to the department at the following location:

             Via email/ tax@seattle.gov

             Via mail:

            

             Refunds

             City of Seattle/ License TaxAdministration

             P.O. Box 34214

             Seattle, WA. 98124

   

Taxpayers are encouraged to use theDepartment's refund application form to ensure that all necessary informationis provided for a timely valid application. However, while use of theDepartment's application form is encouraged, it is not mandatory and anywritten request for refund or credit meeting the requirements of this sectionshall constitute a valid application. Filing an amended return showing anoverpayment will also constitute an application for refund or credit, providedthat the taxpayer also specifically identifies the basis for the refund orcredit.

A taxpayer must submit a refundapplication within the time limits described in subsection (2)(a) of thissection.

 

An application must contain the followingfive elements:

 

(A) The taxpayer's name and SeattleCustomer number must be on the application.

 

(B) The amount of the claim must bestated. Where the exact amount of the claim cannot be specifically ascertainedat time of filing, the taxpayer may submit an application containing anestimated claim amount. Taxpayers must explain why the amount of the claimcannot be stated with specificity and how the estimated amount of the claim wasdetermined.

 

(C) The tax type and taxable period mustbe on the application.

 

(D) The specific basis for the claim mustbe on the application. Any basis for a refund or credit not specificallyidentified in the initial refund application will be considered untimely,except that an application may be refiled to add additional bases at any timebefore the time limits in subsection (2) of this section expire.

 

(E) The signature of the taxpayer or thetaxpayer's representative must be on the application. If the taxpayer isrepresented, the confidential taxpayer information waiver signed by thetaxpayer specifically for that refund claim must be received by the Departmentby the date the substantiation documents are first required, without regard toany extensions. If the signed confidential taxpayer information waiver for therefund claim lists the representative as an entity, every member or employee ofthat entity is authorized to represent the taxpayer. If the signed confidentialtaxpayer information waiver for the refund claim lists the representative as anindividual, only that individual is authorized to represent the taxpayer.

             (i) If the statute has run priorto the filing of the application, the Department will deny the application andnotify the taxpayer.

             (ii) If theDepartment determines that the taxpayer is not entitled to a refund as a matterof law, the application may be denied without requiring substantiation. Thetaxpayer shall be responsible for maintaining substantiation as may eventuallybe needed should taxpayer appeal.

             (iii) The taxpayer isencouraged to file substantiation documents at the time of filing theapplication. However, once an application is filed, the taxpayer must submitsufficient substantiation to support the claim for refund or credit before theDepartment can determine whether the claim is valid. The Department will notifythe taxpayer if additional substantiation is required. The taxpayer mustprovide the necessary substantiation within forty five days after such noticeis sent, unless an extension is granted in writing by theDirector, orthe documentation is under the control of a third party who is not affiliatedwith or under the control of the taxpayer, in which case the taxpayer will haveninety days to provide the documentation.

             

 (4) Ismy refund final? The Department may review a refund or credit providedon the basis of a taxpayer application without an examination by audit. If therefund or credit is granted and the Department subsequently determines that therefund or credit exceeded the amount properly due the taxpayer, the Departmentmay issue an assessment to recover the excess amount. This assessment must bemade within the time limits of SMC 5.55.100.

          

(5) What interest is due on my refund? Interest is due on a refund orcredit granted to a taxpayer.   The rateof interest on refunds and credits is the average of the federal short-termrate as defined in 26 U.S.C. Sec. 1274(d) plus two percentage points. The rateis adjusted on the first day of January of each year by taking an arithmeticalaverage to the nearest percentage point of the federal short-term rate,compounded annually, for the months of January, April and July of theimmediately preceding calendar year and October of the previous preceding year,as published by the United States Secretary of Treasury.

 

Start date forthe calculation of interest. If the taxpayer made all overpayments foreach calendar year and all reporting periods ending with the final monthincluded in a credit notice or refund on or before the due date of the finalreturn for each calendar year or the final reporting period included in thenotice or refund, interest is computed from either:

 

             (a) January 31stfollowing each calendar year included in a notice or refund; or

             (b) The last day ofthe month following the final month included in a notice or refund.

 

If the taxpayer did not make alloverpayments for each calendar year and all reporting

periods ending with the final monthincluded in the notice or refund, interest is computed from the last day of themonth following the date on which payment in full of the liabilities was madefor each calendar year included in a notice or refund, and the last day of themonth following the date on which payment in full of the liabilities was madeif the final month included in a notice or refund is not the end of a calendaryear.

  

(6) MayI get a refund of commercial parking tax or admission tax paid in error?

 

(a) Refundfrom the seller.  Both the Seattle Parking Tax and AdmissionTax are taxes that are due from the customer that are collected by the Sellerand remitted to the City of Seattle.  Ifa buyer pays commercial parking tax or admission tax on a transaction that thebuyer later believes was not taxable, the buyer should request a refund orcredit directly from the seller from whom the purchase was made.  If the seller determines the tax was not dueand issues a refund or credit to the buyer, the seller may seek its own refundfrom the Department. The seller has the records to know if commercial parkingor admission tax was collected on the original sale, knows the buyer, knows thecircumstances surrounding the original sale, is aware of any disputes betweenitself and the buyer concerning the sale, and may already be aware of thecircumstances as to why a refund of parking or admission tax is or is notappropriate.

 

 (b) Refundfrom Department. In certain situations where the buyer has notreceived a refund from the seller, the Department will refund commercialparking or admission tax directly to a buyer. The buyer must file a completerefund application as described in subsection (3)(b) of this section and eithera seller's declaration or a buyer's declaration, under penalty of perjury, mustbe provided for each seller.

 

(i) If the buyeris able to obtain a waiver from the seller of the seller's right to claim therefund, the buyer should file a seller's declaration, under penalty of perjury,with the refund application. A seller's declaration substantiates that:

 

(A) CommercialParking or Admission tax was collected and paid to the Department on thepurchase for which a refund is sought;

(B) The seller hasnot refunded the Commercial Parking or Admissions tax to the buyer or claimed arefund from the Department; and

(C) The sellerwill not seek a refund of the Commercial Parking or Admission tax from theDepartment.

 

(ii) If the sellerno longer exists, the seller refuses to sign the declaration under penalty ofperjury, or the buyer is unable to locate the seller, the buyer should file abuyer's declaration under penalty of perjury with the refund application. Thebuyer's declaration explains why the buyer is unable to obtain a seller'sdeclaration and provides information about the seller and declares that thebuyer has not obtained and will not in the future seek a refund from the sellerfor that claim.

 

(iii) Seller'sdeclaration under penalty of perjury and buyer's declaration under penalty ofperjury forms are available from the following sources:

 

            The Department's internet web siteat http:// http://www.seattle.gov/business-license-tax            By facsimile by calling206-684-5170

            By writing to:

             Refunds

             City of Seattle/ License TaxAdministration

             P.O. Box 34214

             Seattle, WA. 98124

 

 (7) Taxpayer appeal of refund denial.  If the taxpayer believes that the Departmenthas erred in denying an application for refund, the taxpayer may appeal to theHearing Examiner within thirty (30) days of the date the notice denying therefund is mailed by the Department. 

           

Court decision.  Refunds will be made, or accounts credited bythe Department as required by decisions of any court of competent jurisdictionwhen the decision of the court is not being appealed.

                   

(8)  Prompt refunds.  Taxpayers may expect refund requests to beprocessed promptly by the Department. Refunds can generally be processed faster if the taxpayer provides thefollowing information at the time a refund application is made:

 

(a)  The taxpayer should include his or hercustomer number on all documents.

            (b)  Thetaxpayer should include the telephone number and name of the person theDepartment should contact in case the Department needs additional informationor has questions.

(c)  The taxpayer should include a detaileddescription or explanation of the claimed overpayment.

            (d) Amendedtax returns or worksheets should be attached to the refund or creditapplication and clearly identify the tax reporting periods involved.

 

* Please note thatif a taxpayer is under audit and submits a refund request for tax periods thatfall within the audit period, then the City of Seattle will generally considerthe refund request within the audit process. 

 

(9)  Offsetting overpayments againstdeficiencies.  Application or payment ofcredit.        

A credit will beapplied first against delinquent obligations, if any.  Any balance will be refunded to the taxpayer,unless the taxpayer timely instructs the Department, in writing, to apply thecredit to future tax obligations. The Department may apply overpayments againstexisting deficiencies/assessments for the same legal entity. 

 

(10) UnclaimedProperty.  Verified credits remaining inthe Department's possession two years after the date they become payable arepresumed abandoned and shall be treated as unclaimed property under RCW63.29.020 and 63.29.190.

 

(a) Verifiedcredit. A "verified credit" is an amount that the Department has determinedthrough investigation was paid in excess of taxes or fees due and that can notbe offset against valid debits.

(b) Verified credits are payable on the verificationdate.

(c) Where the Department is unable to locate therightful owner, verified credits will be remitted to the State of Washington,Department of Revenue, Unclaimed Property Division in the form and mannerproscribed by the Department of Revenue.

 

(11) Applicationof this rule.  This rule shall apply toChapters 5.35, 5.40, 5.45, 5.46, 5.48, and 5.52 of the Seattle MunicipalCode.  In the event of a conflict betweena rule adopted and an ordinance of The City of Seattle, the ordinance shallprevail.

 

DIRECTOR'S CERTIFICATION

I, Glen M. Lee, Finance Director of the City ofSeattle, do hereby certify

under penalty of perjury of law, that the within andforegoing is a true and

correct copy as adopted by the City of Seattle,Department of Finance and

Administrative Services.

 

     DATED this ______ day of July 2016.

                              CITY OF SEATTLE,

                              a Washingtonmunicipality

                         By:     ____________________________________

                                Glen M. Lee,Finance Director

                                Department ofFinance and Administrative Services

Effectivedate: July 14, 2016