Title 13. Procedure — Subtitle 9. Refunds and Offsets

erroneously pays to the State a greater amount of tax, fee, charge, interest, or penalty than is properly and legally payable;

pays to the State a tax, fee, charge, interest, or penalty that is erroneously, illegally, or wrongfully assessed or collected in any manner; or

pays a tax qualifying for refund under subsections (b) through (h) of this section.

buys alcoholic beverages that are exempt under § 5–104(b) of this article;

discontinues an alcoholic beverage business;

discontinues the sale and delivery in the State of alcoholic beverages in certain container sizes; or

holds alcoholic beverages for sale that:

A claim for refund of income tax may be filed by a claimant whose Maryland taxable income is decreased as a result of a federal contract renegotiation under § 1481 of the Internal Revenue Code.

A claim for refund of income tax under this subsection or subsection (a) of this section may be filed:

the Maryland estate tax is decreased as a result of:

the Maryland generation–skipping transfer tax is decreased as a result of a decrease in the federal generation–skipping transfer tax on the generation–skipping transfer.

the claimant has provided the security required for a motor carrier under § 13–825 of this title; or

the Comptroller has audited the records of the claimant.

Except as provided in paragraph (3) of this subsection, a claim for refund of motor fuel tax may be filed by a claimant who pays the tax on:

A refund based on a claim under paragraph (1)(ii)4 of this subsection may not exceed the following percentages of the motor fuel tax paid:

A person may not make a claim for a refund of motor fuel tax under paragraph (1)(ii)1B of this subsection for motor fuel used to operate a farm truck under the provisions of § 8–602(c) of the Transportation Article.

pays the tax on a sale exempt under § 11–216 of this article;

refunds the tax to a buyer in a canceled or rescinded sale under § 11–403(c) or § 11–403.1(c) of this article;

pays the tax in a canceled or rescinded sale for which the vendor or marketplace facilitator refuses to refund the tax as required under § 11–403(c) or § 11–403.1(c) of this article; or

pays the tax under § 11–408(c) of this article on a cash sale or sale for use that is not a retail sale.

A claim for refund of tobacco tax may be filed by a claimant who buys tobacco tax stamps that:

investigate each claim for refund; and

conduct a hearing at the request of the claimant prior to a final determination on the claim.

the determination of the claim for refund; and

any delay in paying an allowed claim.

the claimant has not paid all other taxes, fees, or charges payable to the State; or

the amount of the refund due is less than $1.

pay the refund; or

allow a credit of the amount of the refund on subsequent sales and use tax payments due from the claimant.

If a person is required to pay inheritance tax the payment of which would reduce the Maryland estate tax imposed on an estate and would entitle the estate to a Maryland estate tax refund, on the written request of the personal representative of the estate, the Comptroller may pay directly to the register, to be applied against the inheritance tax, any Maryland estate tax refund to which the estate would be entitled as a result of the payment of the inheritance tax.

If a person becomes entitled to an inheritance tax refund the payment of which would result in an increase in the Maryland estate tax imposed on an estate, on the written request of the person making a claim for the inheritance tax refund or if a claim for an inheritance tax refund has not been made, the register may pay the inheritance tax refund directly to the Comptroller to be applied against any unpaid Maryland estate tax or additional Maryland estate tax that would become due as a result of the inheritance tax refund.

In this subsection, “public health emergency” includes:

The income tax imposed under this article shall be abated in the case of any individual:

The abatement of tax shall have the same effect and shall apply to the same taxable years as provided under § 692 of the Internal Revenue Code.

may offset the deficiencies to the extent of the overpayments; but

may not allow a refund that is barred under Subtitle 11 of this title.

“Debt” means:

“Debt” includes converted funds as defined in § 15–122.2 of the Health – General Article.

a person owing a debt to a State agency that has not been adjudged satisfied by court order, set aside by court order, or discharged in bankruptcy; or

a defendant or liable parent in arrears of restitution payments whose account has been referred to the Central Collection Unit under § 11-616 of the Criminal Procedure Article.

Except as provided in paragraph (2) of this subsection, for any debt not excepted by law from the Central Collection Unit’s responsibilities under Title 3, Subtitle 3 of the State Finance and Procurement Article or otherwise, the Central Collection Unit may:

A debt may not be withheld if the State agency or the Central Collection Unit has been advised by the Attorney General that the validity of the debt is legitimately in dispute or an alternate means of collection is pending and believed to be adequate.

The Department of Budget and Management shall establish by regulation those classes or categories of debts, including any minimum debt amount, that may be referred to the Central Collection Unit for withholding.

Subject to § 13-918 of this subtitle, if more than one State agency is owed money by the same debtor, any amount withheld from an income tax refund shall be applied in the order of referral of the debt by the State agencies.

Subject to paragraph (2) of this subsection, the withholding of debt from an income tax refund authorized by this part does not preclude use of any other remedy provided by law for the collection of debts owed to the State and this part shall be liberally construed to effectuate its purposes.

This part shall be interpreted in a manner that does not deprive a debtor of any rights or defenses that would be available to that debtor in defending against a claim of setoff incident to a judicial proceeding.

the amount due and owing;

the basis of the debt;

the opportunity to request an investigation of the debt;

the opportunity to contest any adverse determination after an investigation in a hearing before the Central Collection Unit; and

the right to a judicial appeal of a final action by the Central Collection Unit.

A certification by the Central Collection Unit to the Comptroller shall be made on or before January 1 of each calendar year in the form that the Comptroller prescribes.

The certification shall include:

The Comptroller shall:

All money paid to the Central Collection Unit by the Comptroller under this part shall be disposed of by the Central Collection Unit as provided in § 3–305 of the State Finance and Procurement Article.

Any income tax refund in excess of the certified amount shall be paid to the debtor.

The Comptroller shall notify the debtor of:

If a debtor has filed a joint income tax return and the debt is not the liability of both taxpayers, the Comptroller may not withhold that portion of an income tax refund attributable to the individual not owing the debt.

After receiving certification of a debt from the Central Collection Unit, the Comptroller shall promptly notify the Central Collection Unit if the Comptroller determines that a withholding cannot be made.

If an income tax refund is insufficient to satisfy a debt, the Comptroller may withhold amounts from subsequent income tax refunds due a debtor until the debt is extinguished.

Partial payments of the debt shall first be applied against accrued interest, if any, and then to the principal amount of the debt.

Interest on a debt may be withheld at the rate established for that debt by law or contract.

after notification from the Central Collection Unit under § 13-914 of this subtitle that the Central Collection Unit intends to request the Comptroller to withhold the debt from any income tax refund due the debtor; or

within 30 days after notification from the Comptroller under § 13-915 of this subtitle that a debt has been withheld.

On receipt of a request for an investigation, the Central Collection Unit shall investigate any questioned debt with the State agency that referred the debt.

The Central Collection Unit shall make a written determination within 15 calendar days after it receives a request for investigation from the debtor.

If the Central Collection Unit determines that a referral or certification is in error, it shall, as appropriate:

After its investigation, if the Central Collection Unit makes a determination adverse to the debtor, it shall promptly advise the debtor of the debtor’s right to request a hearing on unresolved factual issues before the Central Collection Unit in accordance with the Administrative Procedure Act.

Except for good cause shown, a request for a hearing before the Central Collection Unit must be made within 30 days after the date of notification of the debtor of an adverse determination by the Central Collection Unit following an investigation.

The State agency that referred the debt to the Central Collection Unit may be made a party in any hearing before the Central Collection Unit.

An issue may not be considered at the hearing that has been previously litigated.

Within 15 days after receipt of a timely or otherwise proper request for a hearing under this subsection, the debtor shall be notified of the date of the hearing.

After a hearing, if the Central Collection Unit determines that a certification or referral is in error, it shall take appropriate action as described in § 13-916(b)(3) of this subtitle.

A determination by the Central Collection Unit of the validity of the debt or correctness of the amount owed shall be considered as final agency action under the Administrative Procedure Act.

A debtor aggrieved by a final decision of the Central Collection Unit concerning the validity of the debt or correctness of the amount may appeal the decision as provided for contested cases in §§ 10-222 and 10-223 of the State Government Article.

If a debtor disputes a denial by the Comptroller of a claim for an income tax refund on grounds other than the validity of the debt or the correctness of the amount owed and that debtor also is appealing an adverse determination of the Maryland Tax Court under § 13-532 of this title, judicial review of both decisions shall be consolidated.

a refund interception request to collect an unpaid State, county, or municipal tax;

a refund interception request under Title 10, Subtitle 1, Part II of the Family Law Article;

a refund interception request for converted funds under § 15–122.2 of the Health – General Article;

a refund interception request under § 3–304 of the State Finance and Procurement Article;

any other refund interception request by the State, county, or other political subdivision of the State;

a request for intercept made by a taxing official under Part IV of this subtitle; and

a request for intercept made by a federal official under Part VI of this subtitle.

certify to the Comptroller the existence of an individual’s delinquent income tax liability; and

request the Comptroller to withhold any refund to which the individual is entitled.

allow the Comptroller to certify an income tax due;

allow the Comptroller to request the taxing official to withhold the individual’s tax refund; and

provide for the payment of the refund to Maryland.

the full name and address of the individual and any other names known to be used by the individual;

the Social Security number or federal tax identification number;

the amount of the income tax liability including a detailed statement for each taxable year showing tax, interest, and penalty; and

a statement that all administrative remedies and appeals have been exhausted and that the assessment of tax, interest, and penalty has become final.

notify the individual of a certification by another state of the existence of an income tax liability;

provide the individual with notice of an opportunity to request a hearing to challenge the certification; and

inform the individual that the hearing may be requested:

withhold any income tax refund that is due to an individual whose name has been certified by a taxing official;

pay to the other state the entire refund or the amount certified, whichever is less;

pay any income tax refund in excess of the certified amount to the individual; and

if an income tax refund is less than the certified amount, withhold amounts from subsequent income tax refunds due the individual, if the laws of the other state provide that the other state shall withhold subsequent refunds of individuals certified to that state by the Comptroller.

The Comptroller may not withhold or pay to another state an individual’s income tax refund until all administrative and judicial remedies provided under Subtitle 5 of this title and Title 10 of this article have been exhausted.

If an individual filed a joint return, the Comptroller may not withhold or pay to another state the individual’s income tax refund unless the certification includes both names of the individuals jointly owing income tax to the other state.

“Vendor payment” means any payment made by the State or by a political subdivision of the State to any person.

“Vendor payment” includes any expense reimbursement payable to an employee of the State or of a political subdivision of the State.

“Vendor payment” does not include a person’s salary, wages, or pension.

certify to the Comptroller the existence of a person’s delinquent tax liability or any other liability owed by the person to the local official’s political subdivision; and

request the Comptroller to withhold any refund and vendor payment to which the person is entitled.

allow the Comptroller to certify tax due to the State;

allow the Comptroller to request the local official to withhold from any vendor payment the person’s tax due to the State; and

provide for the payment of the amount withheld to the Comptroller.

the full name and address of the person and any other names known to be used by the person;

the Social Security number or federal tax identification number, if known;

the amount of the tax or other liability including:

a statement that all administrative remedies and appeals have been exhausted and that the tax or other liability has become final.

withhold any refund and vendor payment that is due a person whose name has been certified by a local official;

notify the person of the amount withheld in accordance with the certification by a local official of the existence of a tax or other liability;

pay to the political subdivision the lesser of:

pay any refund and vendor payment in excess of the certified amount to the person; and

if the refund and vendor payment is less than the certified amount, withhold amounts from subsequent refunds and vendor payments due the person, if the laws of the political subdivision provide that the political subdivision shall withhold a vendor payment due persons certified to the political subdivision by the Comptroller.

means any payment, other than a refund, made by the State to any person;

includes any expense reimbursement to an employee of the State; and

does not include a person’s salary, wages, or pension.

certify to the Comptroller the existence of a person’s delinquent nontax liability owed by the person to the federal government; and

request the Comptroller to withhold any refund and vendor payment to which the person is entitled.

allow the Comptroller, on behalf of the State, to certify tax and nontax liabilities due to the State;

allow the Comptroller, on behalf of the State, to enter into a reciprocal agreement with the United States, pursuant to which the federal official would be required to offset federal payments to collect delinquent debts owed to the State; and

provide for the payment of the amount withheld to the State.

the full name and address of the person and any other names known to be used by the person;

the Social Security number or federal tax identification number;

the amount of the nontax liability; and

a statement that the debt is past due and legally enforceable in the amount certified and that there are no legal barriers to collection by offset.

withhold any refund and vendor payment that is due a person whose name has been certified by a federal official;

notify the person of the amount withheld in accordance with the certification by a federal official of the existence of a liability;

pay to the federal official the lesser of:

pay any refund and vendor payment in excess of the certified amount to the person; and

withhold amounts from subsequent refunds and vendor payments due the person if the initial refund and vendor payment is less than the certified amount.