Section 58.1-3703.1 of the Code of Virginia establishes an administrative review process designed to encourage resolution of local license tax issues through an appeals process that includes review by the Commissioner of the Revenue and appeal to the Tax Commissioner:
(a) Administrative Appeal to the Commissioner of the Revenue:
(1) Any person assessed with a local license tax as a result of an appealable event as defined in section 58.1-3701.3 of the Code of Virginia and section 840.01 of this chapter, may file an administrative appeal of such assessment or classification applicable to the taxpayer’s business with the Commissioner of the Revenue 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. 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 or classification, the grounds upon which the taxpayer relies, and any other fact relevant to the taxpayer’s contention. The Commissioner of the Revenue may hold a conference with the taxpayer, if requested by the taxpayer, or require submission of additional information and documents, and audit or further audit, or other evidence deemed necessary for a proper and equitable determination of the appeal. The Commissioner of the Revenue shall undertake a full review of the taxpayer’s claims and issue a final written determination to the taxpayer setting forth the facts and arguments in support of the Commissioner of the Revenue’s final written determination. The decision of the Commissioner of the Revenue shall include a written explanation of the taxpayer's right to file an administrative appeal to the Tax Commissioner, the name and address to which the appeal should be directed, and the deadline for filing such appeal.
If the taxpayer disagrees with the final written determination of the Commissioner of the Revenue, the taxpayer may file an Administrative Appeal to the Tax Commissioner in accordance with section 58.1-3703.1 of the Code of Virginia and subsection (b) hereof.
(2) Provided a timely and complete administrative appeal is filed with the Commissioner of the Revenue, collection activity with respect to the amount in dispute shall be suspended until a final determination is issued by the Commissioner, unless the Treasurer (i) determines that collection would be jeopardized by delay, as defined in section 58.1-3703.1 of the Code of Virginia, as amended; (ii) is advised by the Commissioner of the Revenue 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 that the appeal is frivolous as defined in section 58.1-3703.1 of the Code of Virginia as amended. Interest shall accrue in accordance with the provisions of section 58.1-3703.1 of the Code of Virginia, as amended, but no further penalty shall be imposed while collection action is suspended.
(3) Any taxpayer whose administrative appeal to the Commissioner of the Revenue pursuant to the provisions of subsection (a) has been pending for more than one year without the issuance of a final determination by the Commissioner may, upon not less than 30 days' written notice to the Commissioner of the Revenue, elect to treat the appeal as denied and appeal the assessment to the Tax Commissioner in accordance with the provisions of subsection (b). The Tax Commissioner shall not consider an appeal filed pursuant to the provisions of subsection (a) if he finds that the absence of a final written determination on the part of the Commissioner of the Revenue was caused by the willful failure or refusal of the taxpayer to provide information requested and reasonably needed by the Commissioner to make his determination.
(4) The appeal of the classification of a business shall not affect or change any limitations period prescribed by law for appealing an assessment. The administrative appeal of the classification of the business to the Commissioner of the Revenue pursuant to section 58.1-3703.1 of the Code of Virginia and subsection (a) hereof shall not apply to any license year for which the Tax Commissioner had previously issued a determination pursuant to subsection (b) hereof below relating to any license fee or license tax imposed upon the taxpayer’s business for that same year.
(b) Administrative Appeal to the Virginia Tax Commissioner:
(1) Any taxpayer assessed with a local license tax, or who has received a determination with regard to the classification applicable to the taxpayer’s business, as a result of a final written determination from the Commissioner of the Revenue upon an administrative appeal to the Commissioner in accordance with section 58.1-3703.1 of the Code of Virginia and subsection (a) hereof above, may appeal the final written determination of the Commissioner to the Tax Commissioner. The appeal to the Tax Commissioner must be fined within 90 days of the date of the final written determination of the administrative appeal issued by the Commission of the Revenue. The Tax Commissioner may deny jurisdiction to consider the appeal if the taxpayer had not previously filed an administrative appeal over the same appealable event to the Commissioner of the Revenue in accordance with section 58.1-3703.1 of the Code of Virginia and subsection (a) hereof above and has not obtained a final written determination on such administrative appeal from the Commissioner of the Revenue.
(2) The appeal to the Tax Commissioner 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. The Tax Commissioner shall permit the Commissioner of the Revenue 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 Commissioner of the Revenue are notified that a longer period will be required. The application shall be treated as an application pursuant to section 58.1-1821 of the Code of Virginia, as amended, and the Tax Commissioner may issue an order correcting such assessment or license classification of the business pursuant to section 58.1-1822 of such Code.
(3) Upon receipt of a notice of intent to file an appeal to the Tax Commissioner under section 58.1-3703.1 of the Code of Virginia and subsection (b) hereof, collection activity with respect to the amount in dispute shall be suspended until a final determination is issued by the Tax Commissioner, unless the Treasurer (i) determines that collection would be jeopardized by delay, as defined in section 58.1-3703.1 of the Code of Virginia, as amended; (ii) is advised by the Commissioner of the Revenue 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 that the appeal is frivolous as defined in section 58.1-3703.1 of the Code of Virginia and section 840.01, as amended. Interest shall accrue in accordance with the provisions of section 58.1-3703.1 of the Code of Virginia, as amended, but no further penalty shall be imposed while collection action is suspended. The requirement that collection activity be suspended shall cease unless an appeal to the Tax Commissioner is filed and served on the necessary parties within thirty days of the service of notice of intent to file such appeal.
(4) Implementation of determination of Tax Commissioner. Promptly upon receipt of the final determination of the Tax Commissioner with respect to an appeal pursuant to this subsection (b), the Commissioner of the Revenue 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 in accordance with the provisions of this subsection (b).
A. If the determination of the Tax Commissioner sets forth a specific amount of tax due, the Commissioner of the Revenue shall certify the amount to the Treasurer or other official responsible for collection, and the Treasurer shall issue a bill to the taxpayer for such amount due, together with interest accrued and penalty, if any is authorized by section 58.1- 3703.1 of the Code of Virginia, within 30 days of the date of the determination of the Tax Commissioner.
B. If the determination of the Tax Commissioner sets forth a specific amount of refund due, the Commissioner of the Revenue shall certify the amount to the Treasurer or other official responsible for collection, and the Treasurer shall issue a payment to the taxpayer for such amount due, together with interest accrued pursuant to section 58.1-3703.1 of the Code of Virginia, within 30 days of the date of the determination of the Tax Commissioner.
C. 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 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 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 shall certify the new assessment to the Treasurer or other official responsible for collection, and the Treasurer shall issue a bill to the taxpayer for the amount due, together with interest accrued and penalty, if any is authorized by section 58.1-3703.1 of the Code of Virginia, within 30 days of the date of the new assessment.
D. 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 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 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 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 shall certify the new assessment to the Treasurer or other official responsible for collection, and the Treasurer 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.
(c) The existence or utilization by a taxpayer of the administrative review process provided in section 58.1-3703.1 of the Code of Virginia and this section 840.07 does not affect the taxpayer’s right to pursue other administrative remedies authorized by law.
(Ord. 96-08. Passed 10-16-96; Ord. 11-18. Passed 12-12-11; Ord. 22-16. Passed 10-12-22.)