Spoke with Lacerte this morning.  They insist that the diagnostic is correct.  Apparently CODR issued the wording that way to all of the software providers.  The rep also let me know he has been getting lots of calls from users about this and that some returns have actually been rejected, after overriding the diagnostic.

I plan on overriding the diagnostic and also calling CODR to let them know about the "AND" on their website and the "OR" they fed to the software providers.

It is just not logical that they would intentionally omit any taxpayer without withholding from getting the sales tax refund regardless of their taxable income.  I believe the intention of the 4/18 deadline was for the people that are only submitting a tax return to get the sales tax refund, but would normally not need to file.  Zero tax liablity and Zero wthholding.

Hopefully others will do the same and let CODR know about the error.