CSHB 341(RES): "An Act relating to consideration and determination by the superior court of disputes involving certain taxes and penalties due, and amending provisions relating to the assessment, levy, and collection of taxes and penalties by the state and to the tax liability of taxpayers; and amending Rule 609(b) of the Alaska Rules of Appellate Procedure; and providing for an effective date."
00CS FOR HOUSE BILL NO. 341(RES) 01 "An Act relating to consideration and determination by the superior court of 02 disputes involving certain taxes and penalties due, and amending provisions relating 03 to the assessment, levy, and collection of taxes and penalties by the state and to 04 the tax liability of taxpayers; and amending Rule 609(b) of the Alaska Rules of 05 Appellate Procedure; and providing for an effective date." 06 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 07 * Section 1. AS 22.10.020(d) is amended to read: 08 (d) The superior court has jurisdiction in all matters appealed to it from a 09 subordinate court, or administrative agency when appeal is provided by law. The 10 hearings on appeal from a final order or judgment 11 (1) of a subordinate court [OR ADMINISTRATIVE AGENCY] shall 12 be on the record unless the superior court, in its discretion, grants a trial de novo, in 13 whole or in part; 14 (2) of the Department of Revenue in matters relating to fixing the
01 amount of, or imposing a penalty on, a tax levied and collected by the state when 02 appeal is taken under AS 43.05.242(c)(1) shall be heard as a trial de novo as a 03 matter of right; 04 (3) of the Department of Revenue in matters relating to fixing the 05 amount of, or imposing a penalty on, a tax levied and collected by the state when 06 appeal is taken under AS 43.05.242(c)(2) shall be on the record unless the 07 superior court, in its discretion, grants a trial de novo, in whole or in part; 08 (4) of an administrative agency, except for a matter described in 09 (2) or (3) of this subsection, shall be on the record unless the superior court, in 10 its discretion, grants a trial de novo, in whole or in part. 11 * Sec. 2. AS 37.10.410 is amended to read: 12 Sec. 37.10.410. "ADMINISTRATIVE PROCEEDINGS INVOLVING TAXES" 13 DEFINED. (a) The following money received by the state is considered to be 14 received as a result of the termination of an administrative proceeding for purposes of 15 applying art. IX, sec. 17(a), Constitution of the State of Alaska: 16 (1) past due taxes that are received by the state for each tax year for 17 which a request for an informal conference under AS 43.05.240(a) is made to the 18 Department of Revenue, together with penalties and interest on the taxes; 19 (2) past due taxes that are received by the state after a request for a 20 formal hearing under AS 43.05.240(b)(1) is made to the Department of Revenue, 21 together with penalties and interest on the taxes. 22 (b) Money received by the state under the following conditions is not 23 considered to be received as the result of the termination of an administrative 24 proceeding for purposes of applying art. IX, sec. 17(a), Constitution of the State of 25 Alaska: 26 (1) taxes that are not due at the time the request for the proceeding was 27 made under AS 43.05.240(a) or (b)(1) or 43.05.242(b); 28 (2) taxes set out in a return not audited by the Department of Revenue 29 at the date of collection; or 30 (3) taxes collected for a tax year for which the taxpayer did not give 31 notice of appeal of an assessment made by the Department of Revenue.
01 * Sec. 3. AS 43.05.240 is amended by adding a new subsection to read: 02 (e) The provisions of this section do not apply to the action of the department 03 in fixing the amount of a tax or in imposing a penalty related to a tax described in 04 AS 43.05.242(a). 05 * Sec. 4. AS 43.05 is amended by adding new sections to read: 06 Sec. 43.05.242. APPEAL OF CERTAIN TAXES AND RELATED 07 PENALTIES. (a) The provisions of this section apply to a matter relating to fixing 08 the amount of, or imposing a penalty on, a tax levied and collected by the state under 09 (1) AS 43.19 and AS 43.20; 10 (2) former AS 43.21; 11 (3) AS 43.55; 12 (4) AS 43.65; 13 (5) AS 43.75. 14 (b) A person aggrieved by the action of the department in fixing the amount 15 of a tax or in imposing a penalty may apply to the department within 60 days from the 16 date of mailing the notice required to be given to the person by the department, giving 17 notice of the grievance, and requesting an informal hearing. At the informal hearing, 18 the person aggrieved may present arguments and evidence relevant to the amount of 19 tax or penalty due the state. If the department determines that a correction is 20 warranted, the department shall make the correction. 21 (c) A person aggrieved by the action of the department under (b) of this 22 section in fixing the amount of a tax or in imposing a penalty may 23 (1) within 30 days after decision resulting from the informal hearing, 24 appeal to the superior court in the judicial district in which the person resides; when 25 an appeal is taken under this paragraph, 26 (A) the taxpayer shall be given access to the file of the 27 department in the matter for preparation of the appeal; 28 (B) if, after the appeal is heard, 29 (i) it appears that the tax was correct, the court shall 30 confirm the tax; 31 (ii) it appears that the tax was incorrect, the court shall
01 determine the amount of the tax; if the person aggrieved is entitled to 02 recover the tax or part of it, the court shall order the repayment, and the 03 department shall immediately pay the amount due and attach a certified 04 copy of the judgment to the payment; or 05 (2) within 30 days after decision resulting from an informal hearing, 06 apply to the department and request a formal hearing; when a formal hearing is 07 requested under this paragraph, 08 (A) the department may subpoena witnesses, administer oaths, 09 and make inquiries necessary to determine the amount of the tax or penalty due 10 the state; 11 (B) the person aggrieved may present arguments and evidence 12 relevant to the amount of the tax or penalty due the state; and 13 (C) if the department determines that a correction is warranted, 14 the department shall make the correction. 15 Sec. 43.05.244. TAX, PENALTY, AND INTEREST PAYABLE BEFORE 16 APPEAL. (a) In an appeal from a decision of the department involving a deficiency 17 of taxes levied and collected by the state under a tax described in AS 43.05.242(a), the 18 taxpayer shall pay to the state the full amount of the tax, penalty, and interest in 19 respect of the amount of tax assessed that is not in dispute. The taxpayer shall post 20 a bond, obtain a letter of credit, or provide other evidence satisfactory to the tax court 21 that it is able to pay the amount of tax, penalty, and interest in respect of the amount 22 of tax assessed that is in dispute and that is the basis of the taxpayer's appeal. 23 (b) The tax and interest due under this section are the amounts stated in the 24 final order of the department from which the appeal is taken, or if the final order 25 appealed from is a summary judgment or partial summary judgment, the amount shall 26 be as originally assessed on the issue or issues disposed of. 27 * Sec. 5. AS 43.05.245 is amended to read: 28 Sec. 43.05.245. ASSESSMENT AND COLLECTION OF TAX, PENALTIES, 29 AND INTEREST. If a taxpayer fails to file a return or report required by this title in 30 the time required by law or regulation, or makes an erroneous or fraudulent return, the 31 department shall proceed to assess the license fees, tax, penalties, or interest and make
01 a return from information that [WHICH] it obtains. A return made and subscribed by 02 the department in accordance with this section is presumed sufficient for all legal 03 purposes. However, nothing prevents a taxpayer from presenting evidence or other 04 information on an appeal under AS 43.05.240 or 43.05.242 in order to rebut the 05 presumed sufficiency of a return made and subscribed by the department, nor does the 06 presumption of sufficiency alter the parties' respective burdens of proof once the 07 taxpayer has presented evidence or other material information to rebut that 08 presumption. The assessment of license fees, tax, penalties, or interest under this 09 section occurs when the department issues a notice and demand for payment of the 10 license fees, tax, penalties, or interest. The notice and demand for payment is issued 11 when the notice and demand is delivered to the taxpayer in person or placed in the 12 United States mail, addressed to the last known address of the taxpayer. Penalties and 13 interest assessed under this title shall be collected in the same manner as provided in 14 this title for the collection of tax or license fees. 15 * Sec. 6. AS 43.05 is amended by adding a new section to read: 16 Sec. 43.05.254. OVERPAYMENT. If it has been finally determined that an 17 overpayment exists, either the taxpayer or the commissioner may elect within 60 days 18 to credit the overpayment, including any interest accruing on the overpayment, against 19 the tax liability of the taxpayer for the current tax year and subsequent tax years. The 20 amount of the refund not credited within three years of the date of the election shall 21 be paid to the taxpayer, with interest accrued at the rate established in AS 43.05.280. 22 * Sec. 7. AS 43.20.200(a) is amended to read: 23 (a) As soon as practicable after a return is filed, the department may examine 24 it and determine the correct amount of the tax. If an error is disclosed by the 25 examination, the department shall so notify the taxpayer by first-class mail. The 26 taxpayer may petition for redetermination of deficiency as provided in AS 43.05.240 27 or 43.05.242. 28 * Sec. 8. AS 43.20.270(a) is amended to read: 29 (a) The department may collect taxes, with interest, penalties, and other 30 additional amounts permitted by law, by distraint and sale, in the manner provided in 31 this section, of the property of a person liable to pay the taxes, interest, penalties, or
01 other additional amounts, who neglects or refuses to pay them within 10 days from the 02 mailing of notice and demand for payment of them, and who has not appealed from 03 the assessment of the taxes, interest, penalties, and other additional amounts under 04 AS 43.05.240 or 43.05.242. 05 * Sec. 9. AS 43.55.013(g) is amended to read: 06 (g) The monthly production at the economic limit for a lease or property is 07 presumed to be 3,000 Mcf times the number of well days for the lease or property 08 during that month for which the tax is to be paid. The taxpayer may rebut this 09 presumption at a formal hearing under AS 43.05.242(c)(2) [AS 43.05.240] by 10 providing clear and convincing evidence of a different monthly production rate at the 11 economic limit for the lease or property. The hearing shall be held before February 15 12 of the year or within six months after commencement of gas production for a lease or 13 property. The monthly production rate at the economic limit for the lease or property 14 based upon the clear and convincing evidence of the taxpayer shall be calculated by 15 dividing the value determined under (i) of this section into the average monthly direct 16 operating cost determined under (h) of this section. 17 * Sec. 10. COURT RULE CHANGE; RULES OF APPELLATE PROCEDURE. The 18 provisions of AS 22.10.020(d)(2), added by sec. 1 of this Act, have the effect of changing 19 Rule 609(b) of the Alaska Rules of Appellate Procedure relating to the superior court's 20 exercise of its discretion to grant a de novo review of certain appeals of decisions of the 21 Department of Revenue involving taxes and related penalties. 22 * Sec. 11. This Act takes effect July 1, 1996.