House Bill 390 which limits the time that the state can begin judicial proceedings was just passed in to law
last year. It would not apply to tax debts which were already in the collection process prior to the new law.
Unfortunately because of that they will continue to withhold any refunds you are due until the debt is satisifed.
As far as the fact that you are saying you did not work or live in the state during those years, that is something I cannot really comment on, because I do not know what the state is basing their assessment on. Normally if you work for someone that withholds state taxes from your check, then a copy of your W-2 form
is also sent to that state, and the state assumes you worked or lived in that state. Perhaps one of your employers did this and that is why they think you owe the tax, but I have no way of knowing what evidence the state has that makes them think you owe tax for this time period.
However, if you are successful in getting them to reverse their decision, then these collections would cease and you would be refunded any money you paid. If the amount you owe is substantial, it may be worth your while to seek the help of a tax attorney in getting this resolved.