58.1-3983.1 - Appeals and rulings of local taxes.
§ 58.1-3983.1. Appeals and rulings of local taxes.
A. Definitions. For purposes of this section:
"Amount in dispute," when used with respect to taxes due or assessed,means the amount specifically identified in the administrative appeal orapplication for judicial review as disputed by the party filing such appealor application.
"Frivolous" means a finding, based upon specific facts, that the partyasserting the appeal is unlikely to prevail upon the merits because theappeal is (i) not well grounded in fact; (ii) not warranted by existing lawor a good faith argument for the extension, modification, or reversal ofexisting law; (iii) interposed for an improper purpose, such as to harass, tocause unnecessary delay in the payment of tax or a refund, or to createneedless cost from the litigation; or (iv) otherwise frivolous.
"Jeopardized by delay" means a finding, based upon specific facts, that ataxpayer designs to (i) depart quickly from the locality, (ii) remove hisproperty therefrom, (iii) conceal himself or his property therein, or (iv) doany other act tending to prejudice, or to render wholly or partiallyineffectual, proceedings to collect the tax for the period in question.
"Local business tax" means machinery and tools tax, business tangiblepersonal property tax (including, without limitation, computer equipment),merchant's capital tax, and a consumer utility tax where the amount indispute exceeds $2,500 other than the tax collected on mobiletelecommunication service as defined in § 58.1-3812.
"Local mobile property tax" means the tangible personal property tax onairplanes, boats, campers, recreational vehicles, and trailers.
"Taxpayer" includes a business required to collect a local consumer utilitytax to the extent that the business is charged or assessed with such tax.
B. Administrative appeal to commissioner of the revenue or other assessingofficial.
1. Any person assessed with any local mobile property tax or local businesstax as defined in this section may appeal such assessment within one yearfrom the last day of the tax year for which such assessment is made, orwithin one year from the date of such assessment, whichever is later, to thecommissioner of the revenue or other assessing official.
2. The appeal shall be filed in good faith and sufficiently identify thetaxpayer, the tax period covered by the challenged assessment, the amount indispute, the remedy sought, each alleged error in the assessment, the groundsupon which the taxpayer relies, and any other facts relevant to thetaxpayer's contention.
3. The commissioner of the revenue or other assessing official may hold aconference with the taxpayer if requested by the taxpayer, or requiresubmission of additional information and documents, an audit or furtheraudits, or other evidence deemed necessary for a proper and equitabledetermination of the application.
4. The assessment shall be deemed prima facie correct.
5. The commissioner of the revenue or other assessing official shallundertake a full review of the taxpayer's claims and issue a writtendetermination to the taxpayer setting forth the facts and arguments insupport of his decision within 90 days after such appeal is filed. Suchdetermination shall be accompanied by a written explanation of the taxpayer'sright to file an administrative appeal of the determination to the TaxCommissioner pursuant to subsection D.
6. Any taxpayer whose administrative appeal to the commissioner of therevenue or other assessing official pursuant to this subsection has beenpending for more than one year without the issuance of a final determinationmay, upon not less than 30 days' written notice to the commissioner of therevenue or other assessing official, elect to treat the application as deniedand appeal the assessment to the Tax Commissioner in accordance with theprovisions of subsection D. The Tax Commissioner shall not consider an appealfiled pursuant to the provisions of this subsection if he finds that theabsence of a final determination on the part of the commissioner of therevenue or other assessing official was caused by the willful failure orrefusal of the taxpayer to provide information requested and reasonablyneeded by the commissioner of the revenue or other assessing official to makehis determination.
C. Suspension of collection activity pending administrative appeal tocommissioner of the revenue or other assessing official. Provided a timelyand complete appeal is filed pursuant to subsection B, collection activityshall be suspended by the treasurer or other official responsible for thecollection of such tax until a final determination is issued by thecommissioner of the revenue or other assessing official, unless the treasureror other collection official (i) determines that collection would bejeopardized by delay as defined in this section; or (ii) is advised by thecommissioner of the revenue or other assessing official that the taxpayer hasnot responded to a request for relevant information after a reasonable time.Interest shall accrue in accordance with the provisions of subdivision A 2 eof § 58.1-3703.1, but no further penalty shall be imposed while collectionaction is suspended.
D. Administrative appeal to Tax Commissioner.
1. Any person whose administrative appeal to the commissioner of the revenueor other assessing official pursuant to subsection B has been denied in wholeor in part may appeal the determination of the commissioner of the revenue orother assessing official by filing an appeal with the Tax Commissioner andserving a copy of the appeal upon the commissioner of the revenue or otherassessing official within 90 days of the date of the determination of thecommissioner of the revenue or other assessing official. The appeal shallinclude a copy of the written determination of the commissioner of therevenue or other assessing official that is challenged, together with astatement of the facts and grounds upon which the taxpayer relies.
2. The Tax Commissioner shall determine whether he has jurisdiction to hearthe appeal within 30 days of receipt of the taxpayer's appeal.
3. If the Tax Commissioner determines that he has jurisdiction, he shallprovide the commissioner of the revenue or other assessing official with anopportunity to respond to the appeal and permit the commissioner of therevenue or other assessing official to participate in the proceedings. TheTax Commissioner shall issue a determination to the taxpayer within 90 daysof receipt of the taxpayer's appeal, unless the taxpayer and the commissionerof the revenue or other assessing official are notified that a longer periodwill be required. Such longer period of time shall not exceed 60 days, andthe Tax Commissioner shall notify the affected parties of the reasonnecessitating the longer period of time. If the Tax Commissioner is unable toissue a determination within the 60-day extension period due to the failureof an affected party to supply the Tax Commissioner with necessaryinformation, the Tax Commissioner shall certify this fact in writing prior tothe expiration of the extension period. The Tax Commissioner shall then issuehis determination within 60 days of receipt of such necessary information.
4. The appeal shall be treated as an application pursuant to § 58.1-1821, andthe Tax Commissioner may issue an order correcting such assessment of suchproperty pursuant to § 58.1-1822, if the taxpayer has met the burden of proofprovided in § 58.1-3987.
5. The Tax Commissioner shall not make a determination regarding thevaluation or the method of valuation of property subject to any local taxother than a local business tax.
E. Suspension of collection activity during administrative appeal to TaxCommissioner. On receipt of a notice of intent to file an appeal to the TaxCommissioner under subsection D, the treasurer or other official responsiblefor the collection of such tax shall further suspend collection activityuntil a final determination is issued by the Tax Commissioner, unless thetreasurer or other collection official (i) determines that collection wouldbe jeopardized by delay as defined in this section; or (ii) is advised by thecommissioner or other assessing official that the taxpayer has not respondedto a request for relevant information after a reasonable time. Interest shallaccrue in accordance with the provisions of subdivision A 2 e of §58.1-3703.1, but no further penalty shall be imposed while collection actionis suspended. The requirement that collection activity be suspended shallcease unless an appeal pursuant to subsection D is filed and served on thenecessary parties within 30 days of the service of the notice of intent tofile such appeal.
F. Implementation of determination of Tax Commissioner. Promptly upon receiptof a final determination of the Tax Commissioner, the commissioner of therevenue or other local assessing official shall take those steps necessary tocalculate the amount of tax owed by or refund due to the taxpayer consistentwith the Tax Commissioner's determination and shall provide that informationto the taxpayer and to the treasurer or other official responsible forcollection in accordance with the provisions of this subsection.
1. If the determination of the Tax Commissioner sets forth a specific amountof tax due, the commissioner of the revenue or other assessing official shallcertify this amount to the treasurer or other official responsible forcollection, and the treasurer or other official responsible for collectionshall issue a bill to the taxpayer for such amount due, together withinterest accrued, within 30 days of the date of the determination of the TaxCommissioner.
2. If the determination of the Tax Commissioner sets forth a specific amountof refund due, the commissioner of the revenue or other assessing officialshall certify this amount to the treasurer or other official responsible forcollection, and the treasurer or other official responsible for collectionshall issue a payment to the taxpayer for such amount due, together withinterest accrued, within 30 days of the date of the determination of the TaxCommissioner.
3. If the determination of the Tax Commissioner does not set forth a specificamount of tax due, or otherwise requires the commissioner of the revenue orother assessing official to undertake a new or revised assessment that willresult in the determination of a tax due that has not previously been paid infull, the commissioner of the revenue or other assessing official shallpromptly commence the steps necessary to undertake such new or revisedassessment, and provide the same to the taxpayer within 60 days of the dateof the determination of the Tax Commissioner, or within 60 days after receiptfrom the taxpayer of any additional information requested or reasonablyrequired under the determination of the Tax Commissioner, whichever is later.The commissioner of the revenue or other assessing official shall certify thenew assessment to the treasurer or other official responsible for collection,and the treasurer or other official responsible for collection shall issue abill to the taxpayer for the amount due, together with interest accrued,within 30 days of the date of the new assessment.
4. If the determination of the Tax Commissioner does not set forth a specificamount of refund due, or otherwise requires the commissioner of the revenueor other assessing official to undertake a new or revised assessment thatwill result in the determination of a refund of taxes previously paid, thecommissioner of the revenue or other assessing official shall promptlycommence the steps necessary to undertake such new or revised assessment, andprovide the same to the taxpayer within 60 days of the date of thedetermination of the Tax Commissioner, or within 60 days after receipt fromthe taxpayer of any additional information requested or reasonably requiredunder the determination of the Tax Commissioner, whichever is later. Thecommissioner of the revenue or other assessing official shall certify the newassessment to the treasurer or other official responsible for collection, andthe treasurer or other official responsible for collection shall issue arefund to the taxpayer for the amount of tax due, together with interestaccrued, within 30 days of the date of the new assessment.
G. Judicial review of determination of Tax Commissioner. Following theissuance of a final determination of the Tax Commissioner pursuant tosubsection D, the taxpayer or commissioner of the revenue or other assessingofficial may apply to the appropriate circuit court for judicial review ofthe determination, or any part thereof, pursuant to § 58.1-3984. In any suchproceeding for judicial review of a determination of the Tax Commissioner,the burden shall be on the party challenging the determination of the TaxCommissioner, or any part thereof, to show that the ruling of the TaxCommissioner is erroneous with respect to the part challenged. Neither theTax Commissioner nor the Department of Taxation shall be made a party to anapplication to correct an assessment merely because the Tax Commissioner hasruled on it.
H. Suspension of payment of disputed amount of tax due upon taxpayer's noticeof intent to initiate judicial review.
1. On receipt of a notice of intent to file an application for judicialreview, pursuant to § 58.1-3984, of a determination of the Tax Commissionerpursuant to subsection D, and upon payment of the amount of the tax that isnot in dispute together with any penalty and interest then due with respectto such undisputed portion of the tax, the treasurer or other collectionofficial shall further suspend collection activity while the court retainsjurisdiction unless the court, upon appropriate motion after notice and anopportunity to be heard, determines that (i) the taxpayer's application forjudicial review is frivolous, as defined in this section; (ii) collectionwould be jeopardized by delay, as defined in this section; or (iii)suspension of collection would cause substantial economic hardship to thelocality. For purposes of determining whether substantial economic hardshipto the locality would arise from a suspension of collection activity, thecourt shall consider the cumulative effect of then-pending appeals filedwithin the locality by different taxpayers that allege common claims ortheories of relief.
2. Upon a determination that the appeal is frivolous, that collection may bejeopardized by delay, or that suspension of collection would result insubstantial economic hardship to the locality, the court may require thetaxpayer to pay the amount in dispute or a portion thereof, or to providesurety for payment of the amount in dispute in a form acceptable to the court.
3. No suspension of collection activity shall be required if the applicationfor judicial review fails to identify with particularity the amount indispute.
4. The requirement that collection activity be suspended shall cease unlessan application for judicial review pursuant to § 58.1-3984 is filed andserved on the necessary parties within 30 days of the service of the noticeof intent to file such application.
5. The suspension of collection activity authorized by this subdivision shallnot be applicable to any appeal of a local business tax or local mobileproperty tax that is initiated by the direct filing of an action pursuant to§ 58.1-3984 without prior exhaustion of the appeals provided by subsections Band D.
I. Suspension of payment of disputed amount of refund due upon locality'snotice of intent to initiate judicial review.
1. Payment of any refund determined to be due pursuant to the determinationof the Tax Commissioner shall be suspended if the locality assessing the taxserves upon the taxpayer, within 60 days of the date of the determination ofthe Tax Commissioner, a notice of intent to file an application for judicialreview of the Tax Commissioner's determination pursuant to § 58.1-3984 andpays the amount of the refund not in dispute, including tax and accruedinterest. Payment of such refund shall remain suspended while the courtretains jurisdiction unless the court, upon appropriate motion after noticeand an opportunity to be heard, determines that the locality's applicationfor judicial review is frivolous, as defined in this section.
2. No suspension of refund activity shall be permitted if the locality'sapplication for judicial review fails to identify with particularity theamount in dispute.
3. The requirement that the obligation to make a refund be suspended shallcease unless an application for judicial review pursuant to § 58.1-3984 isfiled and served on the necessary parties within 30 days of the service ofthe notice of intent to file such application.
J. Rulings and advisory opinions.
1. Written rulings from commissioner of the revenue or other assessingofficial. Any taxpayer or authorized representative of a taxpayer may requesta written ruling regarding the application of a local mobile property tax ora local business tax to a specific situation from the commissioner of therevenue or other assessing official. Any taxpayer requesting such a rulingshall provide all facts relevant to the situation and may present a rationalefor the basis of an interpretation of the law most favorable to the taxpayer.Any misrepresentation or change in the applicable law or the factualsituation as presented in the ruling request shall invalidate any such rulingissued. A written ruling may be revoked or amended prospectively if (i) thereis a change in the law, a court decision, or the guidelines issued by theDepartment of Taxation upon which the ruling was based or (ii) thecommissioner of the revenue or other assessing official notifies the taxpayerof a change in the policy or interpretation upon which the ruling was based.However, any taxpayer who acts on a written ruling which later becomesinvalid shall be deemed to have acted in good faith during the period inwhich such ruling was in effect.
2. Advisory opinions of the Tax Commissioner. The Tax Commissioner shall havethe authority to issue advisory written opinions in specific cases asrequested to interpret a local business tax and matters related to theadministration thereof when an assessment of that tax is subject to appeal tothe Tax Commissioner under this chapter. Opinions issued pursuant to thissection shall not be applicable as an interpretation of any other tax law.
K. Record-keeping and audits. Every person who is assessable with a localmobile property tax or a local business tax shall keep sufficient records toenable the commissioner of the revenue or other assessing official to verifythe correctness of the tax paid for the taxable years assessable and toenable the commissioner of the revenue or other assessing official toascertain the correct amount of tax assessable for each of those years. Allsuch records, books of accounts and other information shall be open toinspection and examination by the commissioner of the revenue or otherassessing official in order to allow him to establish whether the tax is duewithin this jurisdiction. The commissioner of the revenue or other assessingofficial shall provide the taxpayer with the option to conduct the audit inthe taxpayer's local business office, if the records are maintained there. Inthe event the records are maintained outside this jurisdiction, copies of theappropriate books and records shall be sent to the commissioner's orassessor's office upon demand.
(1999, cc. 202, 470; 2002, c. 525; 2003, c. 196; 2004, cc. 527, 534; 2005, c.927; 2006, c. 611.)