COLUMBUS, Ohio—Republican state lawmakers on Tuesday unveiled legislation requiring state tax officials to automatically notify and issue refunds when businesses overpay their taxes.

The two companion bills – one each in the state House and Senate – come after state investigators found that the Ohio Department of Taxation wrongfully held onto more than $30 million in requested business tax refunds since 1999.

The agency also had a policy not to tell business taxpayers when they overpaid their taxes, even when they contacted the department with questions. Under current Ohio law, refunds are only made on request, and if tax overpayments aren’t claimed within three to four years, the money is kept by the state.

Under the new legislation – House Bill 402 and Senate Bill 263 – the Department of Taxation would have to notify taxpayers of any overpayments within 60 days of the statute of limitations expiring.

“When a taxpayer makes an overpayment to the state, there is no question that the money belongs to the taxpayer and should be returned,” said state Sen. Bob Peterson, a Sabina Republican co-sponsoring the bill, in a statement.

“Through this legislation, we are making certain that future Tax Commissioners will be required by law to do the right thing and return these overpayments back into the pockets of the taxpayer where it belongs,” the senator added.

The Ohio Inspector General’s office detailed the problems in a report released last November, following a 16-month investigation.

Ohio Tax Commissioner Joe Testa said at the time that his department has already started the process of identifying companies eligible for refunds and issuing about $31 million in refunds.

 
 
 
  
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