1. Except as otherwise provided in this title, in making a determination of the amount required to be paid, the Department shall offset overpayments for a reporting period of an audit period against underpayments for any other reporting period within the audit period.
2. If it is determined that there is a net deficiency, any penalty imposed must be calculated based on the amount of the net deficiency.
3. If it is determined that:
(a) There is a net deficiency for a reporting period after offsetting any overpayment from any previous reporting period, any interest imposed on the net deficiency must be calculated before determining whether there is an overpayment or net deficiency for the next reporting period within the audit period.
(b) There is a net overpayment for a reporting period after offsetting any net deficiency from any previous reporting period, any interest to which the taxpayer is entitled must be calculated before determining whether there is an overpayment or net deficiency for the next reporting period within the audit period.
4. The provisions of this section do not apply if, in any reporting period within the audit period, the taxpayer has:
(a) Failed to file a report or return that he or she is required to file;
(b) Filed such a report or return later than the date it is due;
(c) Filed such a report or return that erroneously shows no taxes due; or
(d) Filed such a report or return that shows taxes due and has not remitted the taxes due in a timely manner.
5. As used in this section, “reporting period” includes, without limitation, a calendar month, a calendar quarter, a calendar year and any other period for reporting.