Bill Text: VA HB1685 | 2023 | Regular Session | Chaptered
Bill Title: Business local; taxes, penalties.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2023-03-16 - Governor: Acts of Assembly Chapter text (CHAP0014) [HB1685 Detail]
Download: Virginia-2023-HB1685-Chaptered.html
Be it enacted by the General Assembly of Virginia:
1. That §§58.1-3703.1 and 58.1-3916 of the Code of Virginia are amended and reenacted as follows:
§58.1-3703.1. Uniform ordinance provisions.
A. Every ordinance levying a license tax pursuant to this chapter shall include provisions substantially similar to this subsection. As they apply to license taxes, the provisions required by this section shall override any limitations or requirements in Chapter 39 (§58.1-3900 et seq.) to the extent that they are in conflict.
1. License requirement. Every person shall apply for a license for each business or profession when engaging in a business in this jurisdiction if (i) the person has a definite place of business in this jurisdiction; (ii) there is no definite place of business anywhere and the person resides in this jurisdiction; or (iii) there is no definite place of business in this jurisdiction but the person operates amusement machines or is classified as an itinerant merchant, peddler, carnival, circus, contractor subject to §58.1-3715, or public service corporation. A separate license shall be required for each definite place of business and for each business. A person engaged in two or more businesses or professions carried on at the same place of business may elect to obtain one license for all such businesses and professions if all of the following criteria are satisfied: (a) each business or profession is subject to licensure at the location and has satisfied any requirements imposed by state law or other provisions of the ordinances of this jurisdiction; (b) all of the businesses or professions are subject to the same tax rate, or, if subject to different tax rates, the licensee agrees to be taxed on all businesses and professions at the highest rate; and (c) the taxpayer agrees to supply such information as the assessor may require concerning the nature of the several businesses and their gross receipts.
Notwithstanding the foregoing, the governing body of any county, city, or town with a population greater than 50,000 may waive the license requirements provided herein for businesses with gross receipts of $200,000 or less.
2. Due dates and penalties.
a. Each person subject to a license tax shall apply for a license prior to beginning business if he was not subject to licensure in this jurisdiction on or before January 1 of the license year, or no later than March 1 of the license year if he had been issued a license for the preceding year. Any locality is authorized to adopt a later application date that is on or before May 1 of the license year. The application shall be on forms prescribed by the assessing official, which forms and accompanying communications shall clearly set out the due date for the application and the amount of any penalty to be charged for late filing of the application, the underpayment of estimated tax, and late payment of tax.
b. The tax shall be paid with the application in the case of any license not based on gross receipts. If the tax is measured by the gross receipts of the business, the tax shall be paid on or before the locality's fixed due date for filing license applications or a later date, including installment payment dates, or 30 or more days after beginning business, at the locality's option.
c. The assessing official may grant an extension of time in which to file an application for a license, for reasonable cause. The extension may be conditioned upon the timely payment of a reasonable estimate of the appropriate tax; the tax is then subject to adjustment to the correct tax at the end of the extension, together with interest from the due date until the date paid and, if the estimate submitted with the extension is found to be unreasonable under the circumstances, with a penalty of 10 percent of the portion paid after the due date.
d. A penalty of 10 percent of the tax may be imposed upon the failure to file an application or the failure to pay the tax by the appropriate due date. Only the late filing penalty shall be imposed by the assessing official if both the application and payment are late; however, both penalties may be assessed if the assessing official determines that the taxpayer has a history of noncompliance. In the case of an assessment of additional tax made by the assessing official, if the application and, if applicable, the return were made in good faith and the understatement of the tax was not due to any fraud, reckless or intentional disregard of the law by the taxpayer, there shall be no late payment penalty assessed with the additional tax. If any assessment of tax by the assessing official is not paid within 30 days, the treasurer or other collecting official may impose a 10 percent late payment penalty. If the failure to file or pay was not the fault of the taxpayer, the penalties shall not be imposed, or if imposed, shall be abated by the official who assessed them. In order to demonstrate lack of fault, the taxpayer must show that he acted responsibly and that the failure was due to events beyond his control.
"Acted responsibly" means that (i) the taxpayer exercised the level of reasonable care that a prudent person would exercise under the circumstances in determining the filing obligations for the business and (ii) the taxpayer undertook significant steps to avoid or mitigate the failure, such as requesting appropriate extensions (where applicable), attempting to prevent a foreseeable impediment, acting to remove an impediment once it occurred, and promptly rectifying a failure once the impediment was removed or the failure discovered.
"Events beyond the taxpayer's control" include, but are not limited to, the unavailability of records due to fire or other casualty; the unavoidable absence (e.g., due to death or serious illness) of the person with the sole responsibility for tax compliance; or the taxpayer's reasonable reliance in good faith upon erroneous written information from the assessing official who was aware of the relevant facts relating to the taxpayer's business when he provided the erroneous information.
e. Interest shall be charged on the late payment of the tax from the due date until the date paid without regard to fault or other reason for the late payment. Whenever an assessment of additional or omitted tax by the assessing official is found to be erroneous, all interest and any penalties charged and collected on the amount of the assessment found to be erroneous shall be refunded together with interest on the refund from the date of payment or the due date, whichever is later. Interest shall be paid on the refund of any BPOL tax from the date of payment or due date, whichever is later, whether attributable to an amended return or other reason. Interest on any refund shall be paid at the same rate charged under §58.1-3916.
No interest shall accrue on an adjustment of estimated tax liability to actual liability at the conclusion of a base year. No interest shall be paid on a refund or charged on a late payment, provided the refund or the late payment is made not more than 30 days from the date of the payment that created the refund or the due date of the tax, whichever is later.
f. Any bill issued by the treasurer or other collecting official that includes, and any communication from the assessing official that imposes, a penalty pursuant to subdivision c or d or interest pursuant to subdivision e shall separately state the total amount of tax owed, the amount of any interest assessed, and the amount of the penalty imposed.
3. Situs of gross receipts.
a. General rule. Whenever the tax imposed by this ordinance is measured by gross receipts, the gross receipts included in the taxable measure shall be only those gross receipts attributed to the exercise of a privilege subject to licensure at a definite place of business within this jurisdiction. In the case of activities conducted outside of a definite place of business, such as during a visit to a customer location, the gross receipts shall be attributed to the definite place of business from which such activities are initiated, directed, or controlled. The situs of gross receipts for different classifications of business shall be attributed to one or more definite places of business or offices as follows:
(1) The gross receipts of a contractor shall be attributed to the definite place of business at which his services are performed, or if his services are not performed at any definite place of business, then the definite place of business from which his services are directed or controlled, unless the contractor is subject to the provisions of §58.1-3715;
(2) The gross receipts of a retailer or wholesaler shall be attributed to the definite place of business at which sales solicitation activities occur, or if sales solicitation activities do not occur at any definite place of business, then the definite place of business from which sales solicitation activities are directed or controlled; however, a wholesaler or distribution house subject to a license tax measured by purchases shall determine the situs of its purchases by the definite place of business at which or from which deliveries of the purchased goods, wares and merchandise are made to customers. Any wholesaler who is subject to license tax in two or more localities and who is subject to multiple taxation because the localities use different measures, may apply to the Department of Taxation for a determination as to the proper measure of purchases and gross receipts subject to license tax in each locality;
(3) The gross receipts of a business renting tangible personal property shall be attributed to the definite place of business from which the tangible personal property is rented or, if the property is not rented from any definite place of business, then to the definite place of business at which the rental of such property is managed; and
(4) The gross receipts from the performance of services shall be attributed to the definite place of business at which the services are performed or, if not performed at any definite place of business, then to the definite place of business from which the services are directed or controlled.
b. Apportionment. If the licensee has more than one definite place of business and it is impractical or impossible to determine to which definite place of business gross receipts should be attributed under the general rule, the gross receipts of the business shall be apportioned between the definite places of businesses on the basis of payroll. Gross receipts shall not be apportioned to a definite place of business unless some activities under the applicable general rule occurred at, or were controlled from, such definite place of business. Gross receipts attributable to a definite place of business in another jurisdiction shall not be attributed to this jurisdiction solely because the other jurisdiction does not impose a tax on the gross receipts attributable to the definite place of business in such other jurisdiction.
c. Agreements. The assessor may enter into agreements with any other political subdivision of Virginia concerning the manner in which gross receipts shall be apportioned among definite places of business. However, the sum of the gross receipts apportioned by the agreement shall not exceed the total gross receipts attributable to all of the definite places of business affected by the agreement. Upon being notified by a taxpayer that its method of attributing gross receipts is fundamentally inconsistent with the method of one or more political subdivisions in which the taxpayer is licensed to engage in business and that the difference has, or is likely to, result in taxes on more than 100 percent of its gross receipts from all locations in the affected jurisdictions, the assessor shall make a good faith effort to reach an apportionment agreement with the other political subdivisions involved. If an agreement cannot be reached, either the assessor or taxpayer may seek an advisory opinion from the Department of Taxation pursuant to §58.1-3701; notice of the request shall be given to the other party. Notwithstanding the provisions of §58.1-3993, when a taxpayer has demonstrated to a court that two or more political subdivisions of Virginia have assessed taxes on gross receipts that may create a double assessment within the meaning of §58.1-3986, the court shall enter such orders pending resolution of the litigation as may be necessary to ensure that the taxpayer is not required to pay multiple assessments even though it is not then known which assessment is correct and which is erroneous.
4. Limitations and extensions.
a. Where, before the expiration of the time prescribed for the assessment of any license tax imposed pursuant to this ordinance, both the assessing official and the taxpayer have consented in writing to its assessment after such time, the tax may be assessed at any time prior to the expiration of the period agreed upon. The period so agreed upon may be extended by subsequent agreements in writing made before the expiration of the period previously agreed upon.
b. Notwithstanding §58.1-3903, the assessing official shall assess the local license tax omitted because of fraud or failure to apply for a license for the current license year and the six preceding license years.
c. The period for collecting any local license tax shall not
expire prior to the period specified in §58.1-3940, two years after the date
of assessment if the period for assessment has been extended pursuant to this
subdivision of the ordinance, two years after the final determination of
an appeal for which collection has been stayed pursuant to subdivision 5 b or
5 d of this ordinance, or two years after the final decision in a
court application pursuant to §58.1-3984 or a similar law for which collection
has been stayed, whichever is later.
5. Administrative appeals to commissioner of the revenue or other assessing official.
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 or application for judicial review as disputed by the party filing such appeal or application.
"Appealable event" means an increase in the assessment of a local license tax payable by a taxpayer, the denial of a refund, or the assessment of a local license tax where none previously was assessed, arising out of the local assessing official's (i) examination of records, financial statements, books of account, or other information for the purpose of determining the correctness of an assessment; (ii) determination regarding the rate or classification applicable to the licensable business; (iii) assessment of a local license tax when no return has been filed by the taxpayer; or (iv) denial of an application for correction of erroneous assessment attendant to the filing of an amended application for license.
An appealable event shall include a taxpayer's appeal of the classification applicable to a business, including whether the business properly falls within a business license subclassification established by the locality, regardless of whether the taxpayer's appeal is in conjunction with an assessment, examination, audit, or any other action taken by the locality.
"Frivolous" means a finding, based on specific facts, that the party asserting the appeal is unlikely to prevail upon the merits because the appeal is (i) not well grounded in fact; (ii) not warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law; (iii) interposed for an improper purpose, such as to harass, to cause unnecessary delay in the payment of tax or a refund, or to create needless cost from the litigation; or (iv) otherwise frivolous.
"Jeopardized by delay" means a finding, based upon specific facts, that a taxpayer designs to (i) depart quickly from the locality; (ii) remove his property therefrom; (iii) conceal himself or his property therein; or (iv) do any other act tending to prejudice, or to render wholly or partially ineffectual, proceedings to collect the tax for the period in question.
b. Filing and contents of administrative appeal. Any person assessed with a local license tax as a result of an appealable event as defined in this section may file an administrative appeal of the assessment within one year from the last day of the tax year for which such assessment is made, or within one year from the date of the appealable event, whichever is later, with the commissioner of the revenue or other local assessing official. The appeal must be filed in good faith and sufficiently identify the taxpayer, the tax periods covered by the challenged assessments, the amount in dispute, the remedy sought, each alleged error in the assessment, the grounds upon which the taxpayer relies, and any other facts relevant to the taxpayer's contention. The assessor may hold a conference with the taxpayer if requested by the taxpayer, or require submission of additional information and documents, an audit or further audit, or other evidence deemed necessary for a proper and equitable determination of the appeal. The assessment placed at issue in the appeal shall be deemed prima facie correct. The assessor shall undertake a full review of the taxpayer's claims and issue a written determination to the taxpayer setting forth the facts and arguments in support of his decision.
The taxpayer may at any time also file an administrative appeal of the classification applicable to the taxpayer's business, including whether the business properly falls within a business license subclassification established by the locality. However, the appeal of the classification of the business shall not apply to any license year for which the Tax Commissioner has previously issued a final determination relating to any license fee or license tax imposed upon the taxpayer's business for the year. In addition, any appeal of the classification of a business shall in no way affect or change any limitations period prescribed by law for appealing an assessment.
c. Notice of right of appeal and procedures. Every assessment made by a commissioner of the revenue or other assessing official pursuant to an appealable event shall include or be accompanied by a written explanation of the taxpayer's right to file an administrative appeal and the specific procedures to be followed in the jurisdiction, the name and address to which the appeal should be directed, an explanation of the required content of the appeal, and the deadline for filing the appeal.
For purposes of facilitating an administrative appeal of the classification applicable to a taxpayer's business, each locality imposing a tax or fee under this chapter shall maintain on its website the specific procedures to be followed in the jurisdiction with regard to such appeal and the name and address to which the appeal should be directed.
d. Suspension of collection activity during appeal. Provided a
timely and complete administrative appeal is filed, collection activity with
respect to the amount in dispute relating to any assessment by the commissioner
of the revenue or other assessing official shall be suspended until a final
determination is issued by the commissioner of the revenue or other assessing
official, unless the treasurer or other official responsible for the collection
of such tax (i) determines that collection would be jeopardized by delay as
defined in this section; (ii) is advised by the commissioner of the revenue or
other assessing official that the taxpayer has not responded to a request for
relevant information after a reasonable time; or (iii) is advised by the
commissioner of the revenue or other assessing official that the appeal is
frivolous as defined in this section. Interest shall accrue in accordance with
the provisions of subdivision 2 e of this subsection, but no
further penalty shall be imposed while collection action is suspended.
e. Procedure in event of nondecision. Any taxpayer whose
administrative appeal to the commissioner of the revenue or other assessing
official pursuant to the provisions of this subdivision 5 of this
subsection has been pending for more than one year without the issuance of
a final determination may, upon not less than 30 days' written notice to the
commissioner of the revenue or other assessing official, elect to treat the
appeal as denied and appeal the assessment or classification of the taxpayer's
business to the Tax Commissioner in accordance with the provisions of
subdivision 6 of this subsection. The Tax Commissioner shall not
consider an appeal filed pursuant to the provisions of this subsection if he
finds that the absence of a final determination on the part of the commissioner
of the revenue or other assessing official was caused by the willful failure or
refusal of the taxpayer to provide information requested and reasonably needed
by the commissioner or other assessing official to make his determination.
6. Administrative appeal to the Tax Commissioner.
a. Any person assessed with a local license tax as a result of
a determination or that has received a determination with regard to the
person's appeal of the license classification or subclassification applicable
to the person's business, upon an administrative appeal to the commissioner of
the revenue or other assessing official pursuant to subdivision 5 of this
subsection, that is adverse to the position asserted by the taxpayer in
such appeal may appeal such assessment or determination to the Tax Commissioner
within 90 days of the date of the determination by the commissioner of the
revenue or other assessing official. The appeal shall be in such form as the
Tax Commissioner may prescribe and the taxpayer shall serve a copy of the
appeal upon the commissioner of the revenue or other assessing official. The
Tax Commissioner shall permit the commissioner of the revenue or other
assessing official to participate in the proceedings, and shall issue a
determination to the taxpayer within 90 days of receipt of the taxpayer's
application, unless the taxpayer and the assessing official are notified that a
longer period will be required. The appeal shall proceed in the same manner as
an application pursuant to §58.1-1821, and the Tax Commissioner pursuant to §
58.1-1822 may issue an order correcting such assessment or correcting the
license classification or subclassification of the business and the related
license tax or fee liability.
b. Suspension of collection activity during appeal. On receipt
of a notice of intent to file an appeal to the Tax Commissioner under
subdivision 6 a of this subsection, collection activity with
respect to the amount in dispute relating to any assessment by the commissioner
of the revenue or other assessing official shall be suspended until a final
determination is issued by the Tax Commissioner, unless the treasurer or other
official responsible for the collection of such tax (i) determines that
collection would be jeopardized by delay as defined in this section; (ii) is
advised by the commissioner of the revenue or other assessing official, or the
Tax Commissioner, that the taxpayer has not responded to a request for relevant
information after a reasonable time; or (iii) is advised by the commissioner of
the revenue or other assessing official that the appeal is frivolous as defined
in this section. Interest shall accrue in accordance with the provisions of
subdivision 2 e of this subsection, but no further penalty shall be
imposed while collection action is suspended. The requirement that collection
activity be suspended shall cease unless an appeal pursuant to subdivision 6
a of this subsection is filed and served on the necessary parties within
30 days of the service of notice of intent to file such appeal.
c. Implementation of determination of Tax Commissioner.
Promptly upon receipt of the final determination of the Tax Commissioner with
respect to an appeal pursuant to subdivision 6 a of this subsection,
the commissioner of the revenue or other assessing official shall take those
steps necessary to calculate the amount of tax owed by or refund due to the
taxpayer consistent with the Tax Commissioner's determination and shall provide
that information to the taxpayer and to the treasurer or other official
responsible for collection in accordance with the provisions of this subdivision.
(1) If the determination of the Tax Commissioner sets forth a specific amount of tax due, the commissioner of the revenue or other assessing official shall certify the amount to the treasurer or other official responsible for collection, and the treasurer or other official responsible for collection shall issue a bill to the taxpayer for such amount due, together with interest accrued and penalty, if any is authorized by this section, within 30 days of the date of the determination of the Tax Commissioner.
(2) If the determination of the Tax Commissioner sets forth a specific amount of refund due, the commissioner of the revenue or other assessing official shall certify the amount to the treasurer or other official responsible for collection, and the treasurer or other official responsible for collection shall issue a payment to the taxpayer for such amount due, together with interest accrued pursuant to this section, within 30 days of the date of the determination of the Tax Commissioner.
(3) If the determination of the Tax Commissioner does not set forth a specific amount of tax due, or otherwise requires the commissioner of the revenue or other assessing official to undertake a new or revised assessment that will result in an obligation to pay a tax that has not previously been paid in full, the commissioner of the revenue or other assessing official shall promptly commence the steps necessary to undertake such new or revised assessment, and provide the same to the taxpayer within 60 days of the date of the determination of the Tax Commissioner, or within 60 days after receipt from the taxpayer of any additional information requested or reasonably required under the determination of the Tax Commissioner, whichever is later. The commissioner of the revenue or other assessing official shall certify the new assessment to the treasurer or other official responsible for collection, and the treasurer or other official responsible for collection shall issue a bill to the taxpayer for the amount due, together with interest accrued and penalty, if any is authorized by this section, within 30 days of the date of the new assessment.
(4) If the determination of the Tax Commissioner does not set forth a specific amount of refund due, or otherwise requires the commissioner of the revenue or other assessing official to undertake a new or revised assessment that will result in an obligation on the part of the locality to make a refund of taxes previously paid, the commissioner of the revenue or other assessing official shall promptly commence the steps necessary to undertake such new or revised assessment or to determine the amount of refund due in the case of a correction to the license classification or subclassification of the business, and provide the same to the taxpayer within 60 days of the date of the determination of the Tax Commissioner, or within 60 days after receipt from the taxpayer of any additional information requested or reasonably required under the determination of the Tax Commissioner, whichever is later. The commissioner of the revenue or other assessing official shall certify the new assessment or refund amount to the treasurer or other official responsible for collection, and the treasurer or other official responsible for collection shall issue a refund to the taxpayer for the amount of tax due, together with interest accrued, within 30 days of the date of the new assessment or determination of the amount of the refund.
7. Judicial review of determination of Tax Commissioner.
a. Judicial review. Following the issuance of a final
determination of the Tax Commissioner pursuant to subdivision 6 a of this
subsection, the taxpayer or commissioner of the revenue or other assessing
official may apply to the appropriate circuit court for judicial review of the determination,
or any part thereof, pursuant to §58.1-3984. In any such proceeding for
judicial review of a determination of the Tax Commissioner, the burden shall be
on the party challenging the determination of the Tax Commissioner, or any part
thereof, to show that the ruling of the Tax Commissioner is erroneous with
respect to the part challenged. Neither the Tax Commissioner nor the Department
of Taxation shall be made a party to an application to correct an assessment
merely because the Tax Commissioner has ruled on it.
b. Suspension of payment of disputed amount of tax due upon taxpayer's notice of intent to initiate judicial review.
(1) On receipt of a notice of intent to file an application for
judicial review, pursuant to §58.1-3984, of a determination of the Tax
Commissioner pursuant to subdivision 6 a of this subsection, and upon
payment of the amount of the tax relating to any assessment by the commissioner
of the revenue or other assessing official that is not in dispute together with
any penalty and interest then due with respect to such undisputed portion of
the tax, the treasurer or other collection official shall further suspend
collection activity while the court retains jurisdiction unless the court, upon
appropriate motion after notice and an opportunity to be heard, determines that
(i) the taxpayer's application for judicial review is frivolous, as defined in
this section; (ii) collection would be jeopardized by delay, as defined in this
section; or (iii) suspension of collection would cause substantial economic
hardship to the locality. For purposes of determining whether substantial
economic hardship to the locality would arise from a suspension of collection
activity, the court shall consider the cumulative effect of then-pending
appeals filed within the locality by different taxpayers that allege common
claims or theories of relief.
(2) Upon a determination that the appeal is frivolous, that collection may be jeopardized by delay, or that suspension of collection would result in substantial economic hardship to the locality, the court may require the taxpayer to pay the amount in dispute or a portion thereof, or to provide surety 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 application for judicial review fails to identify with particularity the amount in dispute or the application does not relate to any assessment by the commissioner of the revenue or other assessing official.
(4) The requirement that collection activity be suspended shall cease unless an application for judicial review pursuant to §58.1-3984 is filed and served on the necessary parties within 30 days of the service of the notice of intent to file such application.
(5) The suspension of collection activity authorized by this
subdivision shall not be applicable to any appeal of a local license tax that
is initiated by the direct filing of an action pursuant to §58.1-3984 without
prior exhaustion of the appeals provided by subdivisions 5 and 6 of this
subsection.
c. Suspension of payment of disputed amount of refund due upon locality's notice of intent to initiate judicial review.
(1) Payment of any refund determined to be due pursuant to the
determination of the Tax Commissioner of an appeal pursuant to subdivision 6 a
of this subsection shall be suspended if the locality assessing the tax
serves upon the taxpayer, within 60 days of the date of the determination of
the Tax Commissioner, a notice of intent to file an application for judicial
review of the Tax Commissioner's determination pursuant to §58.1-3984 and pays
the amount of the refund not in dispute, including tax and accrued interest.
Payment of such refund shall remain suspended while the court retains
jurisdiction unless the court, upon appropriate motion after notice and an
opportunity to be heard, determines that the locality's application for
judicial review is frivolous, as defined in this section.
(2) No suspension of refund activity shall be permitted if the locality's application for judicial review fails to identify with particularity the amount in dispute.
(3) The suspension of the obligation to make a refund shall cease unless an application for judicial review pursuant to §58.1-3984 is filed and served on the necessary parties within 30 days of the service of the notice of intent to file such application.
d. Accrual of interest on unpaid amount of tax. Interest shall
accrue in accordance with the provisions of subdivision 2 e of this
subsection, but no further penalty shall be imposed while collection action
is suspended.
8. Rulings.
Any taxpayer or authorized representative of a taxpayer may request a written ruling regarding the application of a local license tax to a specific situation from the commissioner of the revenue or other assessing official. Any person requesting such a ruling must provide all facts relevant to the situation placed at issue and may present a rationale for the basis of an interpretation of the law most favorable to the taxpayer. In addition, the taxpayer or authorized representative may request a written ruling with regard to the classification applicable to the taxpayer's business, including whether the business properly falls within a business license subclassification established by the locality.
Any misrepresentation or change in the applicable law or the factual situation as presented in the ruling request shall invalidate any such ruling issued. A written ruling may be revoked or amended prospectively if (i) there is a change in the law, a court decision, or the guidelines issued by the Department of Taxation upon which the ruling was based or (ii) the assessor notifies the taxpayer of a change in the policy or interpretation upon which the ruling was based. However, any person who acts on a written ruling which later becomes invalid shall be deemed to have acted in good faith during the period in which such ruling was in effect.
9. Record-keeping Recordkeeping and audits. Every
person who is assessable with a local license tax shall keep sufficient records
to enable the assessor to verify the correctness of the tax paid for the
license years assessable and to enable the assessor to ascertain what is the
correct amount of tax that was assessable for each of those years. All such
records, books of accounts and other information shall be open to inspection
and examination by the assessor in order to allow the assessor to establish
whether a particular receipt is directly attributable to the taxable privilege
exercised within this jurisdiction. The assessor shall provide the taxpayer
with the option to conduct the audit in the taxpayer's local business office,
if the records are maintained there. In the event the records are maintained
outside this jurisdiction, copies of the appropriate books and records shall be
sent to the assessor's office upon demand.
B. Transitional provisions.
1. A locality which changes its license year from a fiscal year to a calendar year and adopts a due date for license applications between March 1 and May 1, inclusive, shall not be required to prorate any license tax to reflect a license year of less than 12 months, whether the tax is a flat amount or measured by gross receipts, provided that no change is made in the taxable year for measuring gross receipts.
2. The provisions of this section relating to penalties, interest, and administrative and judicial review of an assessment shall be applicable to assessments made on and after January 1, 1997, even if for an earlier license year. The provisions relating to agreements extending the period for assessing tax shall be effective for agreements entered into on and after July 1, 1996. The provisions permitting an assessment of a license tax for up to six preceding years in certain circumstances shall not be construed to permit the assessment of tax for a license year beginning before January 1, 1997.
3. Every locality shall adopt a fixed due date for license applications between March 1 and May 1, inclusive, no later than the 2007 license year.
§58.1-3916. Counties, cities, and towns may provide dates for filing returns and set penalties, interest, etc.
Notwithstanding provisions contained in §§58.1-3518, 58.1-3900, 58.1-3913, 58.1-3915, and 58.1-3918, the governing body of any county, city, or town may provide by ordinance the time for filing local license applications and annual returns of taxable tangible personal property, machinery and tools, and merchants' capital. The governing body may also by ordinance establish due dates for the payment of local taxes; may provide that payment be made in a single installment or in two equal installments; may offer options, which may include coupon books and payroll deductions, which allow the taxpayer to determine whether to pay the tangible personal property tax through monthly, bimonthly, quarterly, or semiannual installments or in a lump sum, provided such taxes are paid in full by the final due date; may provide by ordinance penalties for failure to file such applications and returns and for nonpayment in time; may provide for payment of interest on delinquent taxes; and may provide for the recovery of reasonable attorney's or collection agency's fees actually contracted for, not to exceed 20 percent of the delinquent taxes and other charges so collected. A locality that provides for payment of interest on delinquent taxes shall provide for interest at the same rate on overpayments due to erroneously assessed taxes to be paid to the taxpayer, provided that no interest shall be required to be paid on such refund if (i) the amount of the refund is $10 or less or (ii) the refund is the result of proration pursuant to §58.1-3516. A court that finds that an overpayment of local taxes has been made in an action brought pursuant to §58.1-3984 shall award interest at the appropriate rate, notwithstanding the failure of the locality to conform its ordinance to the requirements of this section.
Notwithstanding any contrary provision of law, the local governing body shall allow an automatic extension on real property taxes imposed upon a primary residence and personal property taxes imposed upon a qualifying vehicle, as defined in §58.1-3523, owed by members of the armed services of the United States deployed outside of the United States. Such extension shall end and the taxes shall be due 90 days following the completion of such member's deployment. For purposes of this section, "the armed services of the United States" includes active duty service with the regular Armed Forces of the United States or the National Guard or other reserve component.
No tax assessment or tax bill shall be deemed delinquent and subject to the collection procedures prescribed herein during the pendency of any administrative appeal under §58.1-3980, so long as the appeal is filed within 90 days of the date of the assessment, and for 30 days after the date of the final determination of the appeal, provided that nothing in this paragraph shall be construed to preclude the assessment or refund, following the final determination of such appeal, of such interest as otherwise may be provided by general law as to that portion of a tax bill that has remained unpaid or was overpaid during the pendency of such appeal and is determined in such appeal to be properly due and owing.
Interest may commence not earlier than the first day following
the day such taxes are due by ordinance to be filed, at a rate not to exceed 10
percent per year. The governing body may impose interest at a rate not to
exceed the rate of interest established pursuant to §6621 of the Internal
Revenue Code of 1954, as amended, or 10 percent annually, whichever is greater,
for the second and subsequent years of delinquency. No penalty for failure to
pay a tax or installment shall exceed (i) 10 percent of the tax past due on
such property; (ii) in the case of delinquent tangible personal property tax
more than 30 days past due on property classified pursuant to subdivision A 15,
A 16, or A 20 of §58.1-3506, which remains unpaid after 10 days' written
notice sent by United States mail to the taxpayer of the intention to impose a
penalty pursuant hereto, the penalty shall not exceed an amount equal to the
difference between the tax due and owing with respect to such property and the
tax that would have been due and owing if the property in question had been
classified as general tangible personal property pursuant to §58.1-3503; (iii)
in the case of delinquent tangible personal property tax more than 30 days past
due, 25 percent of the tax past due on such tangible personal property; (iv) in
the case of delinquent remittance of excise taxes on meals, lodging, or
admissions collected from consumers, 10 percent for the first month the taxes
are past due, and five percent for each month thereafter, up to a maximum of 25
percent of the taxes collected but not remitted; or (v) $10, whichever is
greater, provided, however, that the penalty shall in no case exceed the amount
of the tax assessable. No penalty for failure to file a return shall be greater
than 10 percent of the tax assessable on such return or $10, whichever is
greater;, provided, however, that the penalty shall in no case
exceed the amount of the tax assessable. The assessment of such penalty shall
not be deemed a defense to any criminal prosecution for failing to make return
of taxable property as may be required by law or ordinance. Penalty for failure
to file an application or return may be assessed on the day after such return
or application is due; penalty for failure to pay any tax may be assessed on
the day after the first installment is due. Any such penalty when so assessed
shall become a part of the tax. Any bill issued by the treasurer imposing a
penalty or interest for taxes owed on machinery and tools or tangible personal
property owned by a business shall separately state the total amount of tax
owed, the amount of any interest assessed, and the amount of the penalty
imposed.
No penalty for failure to pay any tax shall be imposed for any assessment made later than two weeks prior to the day on which the taxes are due, if such assessment is made thereafter through the fault of a local official, and if such assessment is paid within two weeks after the notice thereof is mailed.
In the event a transfer of real property ownership occurs after January 1 of a tax year and a real estate tax bill has been mailed pursuant to §§58.1-3281 and 58.1-3912, the treasurer or other appropriate local official designated by ordinance of the local governing body in jurisdictions not having a treasurer, upon ascertaining that a property transfer has occurred, may invalidate a bill sent to the prior owner and reissue the bill to the new owner as permitted by §58.1-3912, and no penalty for failure to pay any tax for any such assessment shall be imposed if the tax is paid within two weeks after the notice thereof is mailed.
Penalty and interest for failure to file a return or to pay a tax shall not be imposed if such failure was not the fault of the taxpayer, or was the fault of the commissioner of revenue or the treasurer, as the case may be. The failure to file a return or to pay a tax due to the death of the taxpayer or a medically determinable physical or mental impairment on the date the return or tax is due shall be presumptive proof of lack of fault on the taxpayer's part, provided the return is filed or the taxes are paid within 30 days of the due date; however, if there is a committee, legal guardian, conservator or other fiduciary handling the individual's affairs, such return shall be filed or such taxes paid within 120 days after the fiduciary qualifies or begins to act on behalf of the taxpayer. Interest on such taxes shall accrue until paid in full. Any such fiduciary shall, on behalf of the taxpayer, by the due date, file any required returns and pay any taxes that come due after the 120-day period. The treasurer shall make determinations of fault relating exclusively to failure to pay a tax, and the commissioner of the revenue shall make determinations of fault relating exclusively to failure to file a return. In jurisdictions not having a treasurer or commissioner of the revenue, the governing body may delegate to the appropriate local tax officials the responsibility to make the determination of fault.
The governing body may further provide by resolution for reasonable extensions of time, not to exceed 90 days, for the payment of real estate and personal property taxes and for filing returns on tangible personal property, machinery and tools, and merchants' capital, and the business, professional, and occupational license tax, whenever good cause exists. The official granting such extension shall keep a record of every such extension. If any taxpayer who has been granted an extension of time for filing his return fails to file his return within the extended time, his case shall be treated the same as if no extension had been granted.
This section shall be the sole authority for local ordinances setting due dates of local taxes and penalty and interest thereon, and shall supersede the provisions of any charter or special act.