Arkansas Code of 1987 (2023) › Title 26 - TAXATION (§§ 26-1-101 — 26-82-119) › Subtitle 2 - ADMINISTRATION OF STATE TAXES (§§ 26-17-201 — 26-21-115) › Chapter 18 - STATE TAX PROCEDURE GENERALLY (§§ 26-18-101 — 26-18-1120) › Subchapter 4 - ASSESSMENTS (§§ 26-18-401 — 26-18-406) › Section 26-18-406 - Judicial relief

(a)
A taxpayer may seek judicial relief from a final assessment not protested by the taxpayer under §
26-18-404
or under the Independent Tax Appeals Commission Act, §
26-18-1101
et seq., or from a final decision by the Secretary of the Department of Finance and Administration under §
26-18-405
or by the Tax Appeals Commission under the Independent Tax Appeals Commission Act, §
26-18-1101
et seq., by:
(1)
(A)
Filing suit for judicial relief from the final assessment or decision within one hundred eighty (180) days of the date of the final assessment or decision.
(B)
A taxpayer filing suit under this subdivision (a)(1) shall not be required to pay the state tax, penalties, and interest due before filing suit;
(2)
Paying the entire amount of state tax due within one (1) year of the date of the final assessment or decision and filing suit to recover that amount within one (1) year of the date of payment; or
(3)
Filing suit to recover assessed tax, penalty, and interest paid prior to the time for issuance of the final assessment within one (1) year of the date of the final decision of the secretary under §
26-18-405
or the commission under the Independent Tax Appeals Commission Act, §
26-18-1101
et seq.
(b)
(1)
A taxpayer may seek judicial relief from a final decision denying a claim for refund by filing suit to recover the amount claimed within one (1) year from the mailing of the denial of the secretary under §
26-18-507
, or a final decision of the secretary under §
26-18-405
or the commission under the Independent Tax Appeals Commission Act, §
26-18-1101
et seq., whichever is later.
(2)
The secretary may seek judicial relief under §
26-18-1117
from a decision of the commission concerning the assessment of a tax deficiency or the denial of a claim for refund by filing suit within (30) days of the date of the decision of the commission.
(c)
(1)
(A)
Jurisdiction for a suit by a taxpayer to contest a decision of the secretary or the commission under this section is in the Pulaski County Circuit Court or the circuit court of the county in which the taxpayer resides or has his or her principal place of business, where the matter shall be tried de novo.
(B)
Jurisdiction for a suit by the secretary to contest a decision of the commission under this section is in the Pulaski County Circuit Court or in the circuit court of the county in which the taxpayer resides or has its principal place of business in the state, where the matter shall be tried de novo.
(2)
An appeal of a circuit court decision under this section will lie from the circuit court to the Supreme Court, as in other cases provided by law.
(3)
A presumption of correctness or weight of authority shall not attach to a final assessment or decision of the secretary or the commission in a trial de novo or an appeal under this section.
(d)
(1)
The methods provided in this section shall be the sole alternative methods for seeking relief from a written decision of the secretary or the commission.
(2)
An injunction shall not issue to stay proceedings for assessment or collection of taxes levied under state tax law.
(e)
(1)
In a court proceeding under this section, the:
(A)
Prevailing party may be awarded a judgment for court costs; and
(B)
Taxpayer may be awarded reasonable attorney's fees if the:
(i)
Secretary revised a decision of the hearing officer in favor of the taxpayer under §
26-18-405
;
(ii)
Taxpayer is the prevailing party in an action for judicial relief from the decision of the secretary under this section; and
(iii)
Court finds that the secretary's revision was without a reasonable basis in law and fact.
(2)
A judgment of court costs entered by the court in favor of either party or of attorney's fees awarded in favor of the taxpayer shall be treated, for purposes of this chapter, in the same manner as an overpayment or deficiency of tax, except that interest or penalty shall not be allowed or assessed with respect to a judgment for court costs or attorney's fees.
(f)
If a taxpayer pays the tax, penalty, and interest assessed under §
26-18-403
and does not request administrative relief according to §
26-18-404
or the Independent Tax Appeals Commission Act, §
26-18-1101
et seq., then:
(1)
The taxpayer may seek judicial relief from the assessment only if the taxpayer files suit in circuit court within one (1) year from the date of payment of the assessment; and
(2)
The provisions of §
26-18-507
shall not apply to the payments.
(g)
The Arkansas Rules of Civil Procedure and §
16-56-126
concerning nonsuit and commencement of new actions apply to appeals under this section.
Amended by Act 2021, No. 593,§ 15, eff. 1/1/2023.
Amended by Act 2015, No. 896,§ 5, eff. 10/1/2015.
Acts 1979, No. 401, §§ 21, 22; 1981, No. 914, § 5; A.S.A. 1947, §§ 84-4721, 84-4722; Acts 1997, No. 1139, § 7; 1999, No. 1277, § 6; 2003, No. 1718, §§ 6-8; 2009, No. 755, § 2; 2011, No. 585, § 2.