(a)

(1) Any taxpayer who has paid any state tax to the State of Arkansas in excess of the state taxes lawfully due, subject to the requirements of this chapter, shall be refunded the overpayment of the state tax determined by the director to be erroneously paid upon the filing of an amended return or a verified claim for refund, subject to subsection (e) of this section.

(2) This subsection does not include an action based on Arkansas Constitution, Article 16, § 13.

(b) The claim shall specify:

(1) The name of the taxpayer;

(2) The time when and the period for which the state tax was paid;

(3) The nature and kind of state tax paid;

(4) The amount of the state tax that the taxpayer claimed was erroneously paid;

(5) The grounds upon which a refund is claimed; and

(6) Any other information relative to the payment as may be prescribed by the director.

(c) The director shall determine what amount of refund, if any, is due as soon as practicable after a claim has been filed, but in no event shall the taxpayer be entitled to file a suit for refund under § 26-18-406 until at least six (6) months have elapsed from the date of the filing of the claim for refund or the director has issued a notice of denial of a claim for refund.

(d) Notwithstanding any provisions of the law to the contrary, a taxpayer who acts only as an agent of the state in the collection of any state tax shall be entitled to claim a credit or refund of the state tax only if the taxpayer establishes that he or she has:

(1) Borne the state tax in question;

(2) Repaid the amount of the state tax to the person from whom he or she collected it; or

(3) Obtained the consent of the person to the allowance of the credit or refund.

(e) (1) (A) The director shall make a written determination and give notice to the taxpayer concerning whether or not a refund is due.

(B)

(i) If a refund is due, the director shall certify that the claim is to be paid to the taxpayer as provided by law or credited against state taxes due or to become due.

(ii)

(a) If the director determines that the taxpayer entitled to the refund has an outstanding state tax delinquency for which a certificate of indebtedness has been filed, the director shall apply the refund due as payment against the outstanding state tax delinquency. If the amount of the state tax refund exceeds the amount of the outstanding state tax delinquency, the excess amount shall be paid to the taxpayer in accordance with subdivision (e)(1)(B)(i) of this section.

(b) The director shall notify each taxpayer in writing whose refund results from the filing of a joint return that the joint refund will be applied against the outstanding state tax delinquency.

(c) A taxpayer who claims that only the taxpayer's spouse owes the delinquent state tax debt may seek administrative relief by filing a written protest under oath within thirty (30) days after the notice under subdivision (e)(1)(B)(ii)(b) is received that includes information regarding why the taxpayer does not owe the delinquent state tax debt and either requests a hearing in person or based upon the information submitted with the protest.

(d) A hearing on a written protest made under this subdivision (e)(1)(B)(ii) and any judicial relief requested following the administrative hearing process shall be provided in accordance with the applicable provisions of §§ 26-18-405 and 26-18-406.

(2)

(A) If the director's determination is to disallow the claim for refund, in whole or in part, then the director shall immediately issue a written decision giving notice to the taxpayer of the denial of the claim for refund.

(B) The taxpayer may seek administrative review and relief from the director's decision to deny a claim for refund by protesting as provided in §§ 26-18-404 and 26-18-405.

(3) The taxpayer may seek judicial relief under the provisions of § 26-18-406 from:

(A) A notice of a denial of a claim for refund issued by the director; or

(B) The director's failure to issue a written decision after the claim for refund has been filed for six (6) months.

(f)

(1) This section shall not apply to state taxes paid as a result of an audit or proposed assessment.

(2) State taxes paid as a result of an audit or proposed assessment may not be recovered unless § 26-18-406 applies.