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Senate approves bill to let taxpayers correct invoices and seek refunds after court ruling
Summary
The Senate passed SB27 to clarify when taxpayers can get refunds for taxes paid on erroneously billed items, adding a facts-and-circumstances standard and leaving a fiscal note for potential past refunds; the bill passed after an amendment and will go to the House.
The Utah Senate voted to pass Senate Bill 27 on Feb. 21 to clarify when taxpayers may receive refunds for taxes paid because of invoicing errors, a change prompted by a recent Utah Supreme Court decision.
Senator Bramble, sponsor of the amendment adopted on the floor, said the measure prevents post‑facto recasting of transactions to avoid tax liability by requiring a preponderance-of-the-evidence review of facts and circumstances at the time of the transaction as well as books and records. "If a business advertised ‘free delivery’ at the time of sale, you can't later reclassify delivery as nontaxable simply because invoices are restated," Bramble said.
Senator Stevenson, who presented the bill, said the legislation responds to a Supreme Court ruling that had restricted refunds for taxpayers discovering vendor errors. The sponsor and supporters described the bill as taxpayer-friendly and intended to allow corrections where clerical or vendor mistakes led to erroneous tax payments.
Senator Weiler, speaking in support, said the law would help more taxpayers than a single court case and would change statutory standards for refund claims to benefit taxpayers who can demonstrate errors. The tax commission’s fiscal estimate accompanying the bill, presented on the floor, estimated a $2,000,000 cost related to past refunds; a separate projection cited roughly $6,700,000 annually in ongoing refunds if the unfunded fiscal note is not resolved.
After floor debate and amendment, the Senate approved SB27; the roll-call showed 24 yeas, 0 nays and 5 absent. The bill will be forwarded to the House for concurrence and any fiscal adjustments.
