                                 CODE OF VIRGINIA

PRORATION OF LICENSE TAXES (§ 58.1-3710)

A. Notwithstanding any other provision of law, general or special, and
regardless of the basis or method of measurement or computation, no county, city
or town shall impose a license tax based on gross receipts on a business, trade,
profession, occupation or calling, or upon a person, firm or corporation for any
fraction of a year during which such person, firm or corporation has permanently
ceased to engage in such business, trade, profession, occupation or calling
within the county, city or town. In the event a person, firm or corporation
ceases to engage in a business, trade, profession or calling within a county,
city or town during a year for which a license tax based on gross receipts has
already been paid, the taxpayer shall be entitled upon application to a refund
for that portion of the license tax already paid, prorated on a monthly basis so
as to ensure that the licensed privilege is taxed only for that fraction of the
year during which it is exercised within the county, city or town. The county,
city or town may elect to remit any refunds in the ensuing fiscal year, and may
offset against such refund any amount of past-due taxes owed by the same
taxpayer. In no event shall a county, city or town be required to refund any
part of a flat fee or minimum flat tax.

B. Notwithstanding subsection A and any other provision of law, general or
special, in the event that a person, firm, or corporation ceases to engage in a
business, trade, profession, or calling in one year for which a license is based
on gross receipts, but the person, firm, or corporation indicates to the county,
city, or town that it intends to settle outstanding, existing business accounts
in the year following the year in which it ceased to do business, such person,
firm, or corporation shall be authorized to pay a license tax based on an
estimate of gross receipts for such year, instead of a license tax based on the
previous year&#8217;s gross receipts. Such tax shall be subject to adjustment to
the correct tax at such time as all accounts are closed. If the estimate
submitted pursuant to this subsection is found to be unreasonable under the
circumstances, a penalty of 10 percent of the additional license tax assessed
shall be assessed. If a person, firm, or corporation that is subject to an
estimated license tax under this subsection is found to continue to operate the
business, for which it gave notice of the cessation of operations, during the
year for which it is subject to the estimated license tax, the person, firm, or
corporation shall be required to pay the full amount of the license tax due
based on the previous year&#8217;s gross receipts plus a penalty of 10 percent
of this amount, provided that the 10 percent penalty for an unreasonable
estimate of gross receipts shall not be assessed.

HISTORY: Code 1950, § 58-266.5:1; 1983, c. 252; 1984, cc. 327, 675; 2015, c.
250.