Opinion:In the Matter of the Income Tax Protest of Raytheon Company, 2022 OK 32
Subject matter:Tax
Date Decided:April 5, 2022
Trial Court:Oklahoma Tax Commission
Route to this Court:OTC denied Raytheon’s claim; ALJ affirmed; Raytheon appealed; Retained. 
Facts:For the tax year 2012, Raytheon made estimated tax payments totaling $626,965.00 to the Oklahoma Tax Commission. Raytheon’s tax return was originally due on March 15, 2013. After properly securing an extension, and making a final quarterly payment of $152,000.00 in March of 2013, Raytheon timely filed its 2012 Oklahoma Corporation Income Tax Return on September 27, 2013. Raytheon then discovered it had overpaid by double. On September 27, 2016, Raytheon filed its return claiming a tax overpayment of $321,444.00.

On October 5, 2016, the OTC issued a letter denying Raytheon’s claim for a refund, maintaining that the claim “was not filed within the allowed time of three years from the date the tax was paid.” Raytheon submitted its tax protest on November 22, 2016. The assigned administrative law judge issued factual findings and legal conclusions. The ALJ recommended denying the protest because the refund claim fell outside of the applicable three (3) year period set forth in 68 O.S. 2011 § 2373. On August 14, 2017, the OTC issued an order adopting the recommendations of the ALJ. Raytheon then appealed to the Oklahoma Supreme Court.
Standard of Review:Whether Raytheon’s refund claim was time-barred under 68 O.S.2011, § 2373 presents a question of statutory interpretation, and thus involves solely a legal issue reviewed de novo.
Analysis:Corporations and individuals who erroneously overpay taxes may seek a refund of the excess sums. 68 O.S.2011, § 2373. To successfully recover an overpayment, Raytheon must have paid any excess taxes within three years of the date of the claim for a refund. Under 68 O.S.2011, § 2375(A), taxes are deemed due and paid when a return is filed. In this case, Raytheon paid all of the tax due, plus an additional $321,444.00 based on the error it later discovered. Additionally, OTC had no jurisdiction over the Arizona income (the source of the overpayment) and could not have attempted to assess liability for that income if Raytheon’s return was filed without the error.

If the original due date for a tax return were used to calculate the deadline for claiming a refund, without regard to an extension, it would impede a taxpayer’s statutory right to extend the deadline. The later date also allows for a more complete picture of Raytheon’s income and tax obligation. And, under OTC regulations a taxpayer is not required to have tendered one-hundred percent of their tax obligation at the time an extension is sought. This regulation is an acknowledgment that estimated payments are merely an approximation of a taxpayer’s total liability.
Vote:8-1. Kane, V.C.J., Kauger (by separate writing), Edmondson, Combs, Gurich, Rowe, AND Kuehn, JJ., and Reif, S.J., CONCUR;
Darby, C.J., Concurs in result (by separate writing);
Winchester, J., Disqualified.
Other: In J. Kauger’s concurrence, she agrees with the majority but believes the Court has no jurisdiction because Raytheon’s false accounting was because of their inclusion of money generated by property sale in Arizona. 

C.J. Darby concurs with the result, but believes the court should have ruled in favor of the taxpayer as required by McGannon v. State, 1912 OK 384, ¶¶ 18-19, 33 Okla. 145, 124 P. 1063, 1067.