                                 CODE OF VIRGINIA

APPEALS AND RULINGS OF LOCAL TAXES (§ 58.1-3983.1)

A. Definitions. For purposes of this section:
			&#8220;Amount in dispute,&#8221; 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.
			&#8220;Frivolous&#8221; means a finding, based upon 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.
			&#8220;Jeopardized by delay&#8221; 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.
			&#8220;Local business tax&#8221; means machinery and tools tax, business
tangible personal property tax (including, without limitation, computer
equipment), merchant&#8217;s capital tax, and a consumer utility tax where the
amount in dispute exceeds $2,500 other than the tax collected on mobile
telecommunication service as defined in &#xA7; 58.1-3812.
			&#8220;Local mobile property tax&#8221; means the tangible personal property
tax on airplanes, boats, campers, recreational vehicles, and trailers.
			&#8220;Taxpayer&#8221; includes a business required to collect a local
consumer utility tax to the extent that the business is charged or assessed with
such tax.

B. Administrative appeal to commissioner of the revenue or other assessing
official.

   1. Any person assessed with any local mobile property tax or local business
   tax as defined in this section may appeal such 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 such assessment, whichever is later, to the commissioner
   of the revenue or other assessing official.

   2. The appeal shall be filed in good faith and sufficiently identify the
   taxpayer, the tax period covered by the challenged assessment, 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&#8217;s contention.

   3. The commissioner of the revenue or other assessing official may hold a
   conference with the taxpayer if requested by the taxpayer, or require
   submission of additional information and documents, an audit or further
   audits, or other evidence deemed necessary for a proper and equitable
   determination of the application.

   4. The assessment shall be deemed prima facie correct.

   5. The commissioner of the revenue or other assessing official shall undertake
   a full review of the taxpayer&#8217;s claims and issue a written determination
   to the taxpayer setting forth the facts and arguments in support of his
   decision within 90 days after such appeal is filed. Such determination shall
   be accompanied by a written explanation of the taxpayer&#8217;s right to file
   an administrative appeal of the determination to the Tax Commissioner pursuant
   to subsection D.

   6. Any taxpayer whose administrative appeal to the commissioner of the revenue
   or other assessing official pursuant to this subsection has been pending for
   more than one year without the issuance of a final determination may, upon not
   less than 30 days&#8217; written notice to the commissioner of the revenue or
   other assessing official, elect to treat the application as denied and appeal
   the assessment to the Tax Commissioner in accordance with the provisions of
   subsection D. 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 of the revenue or other assessing official to make his
   determination.

C. Suspension of collection activity pending administrative appeal to
commissioner of the revenue or other assessing official. Provided a timely and
complete appeal is filed pursuant to subsection B, collection activity shall be
suspended by the treasurer or other official responsible for the collection of
such tax until a final determination is issued by the commissioner of the
revenue or other assessing official, unless the treasurer or other collection
official (i) determines that collection would be jeopardized by delay as defined
in this section; or (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. Interest shall accrue in accordance with
the provisions of subdivision A 2 e of &#xA7; 58.1-3703.1, but no further
penalty shall be imposed while collection action is suspended.

D. Administrative appeal to Tax Commissioner.

   1. Any person whose administrative appeal to the commissioner of the revenue
   or other assessing official pursuant to subsection B has been denied in whole
   or in part may appeal the determination of the commissioner of the revenue or
   other assessing official by filing an appeal with the Tax Commissioner and
   serving a copy of the appeal upon the commissioner of the revenue or other
   assessing official within 90 days of the date of the determination of the
   commissioner of the revenue or other assessing official. The appeal shall
   include a copy of the written determination of the commissioner of the revenue
   or other assessing official that is challenged, together with a statement of
   the facts and grounds upon which the taxpayer relies.

   2. The Tax Commissioner shall determine whether he has jurisdiction to hear
   the appeal within 30 days of receipt of the taxpayer&#8217;s appeal.

   3. If the Tax Commissioner determines that he has jurisdiction, he shall
   provide the commissioner of the revenue or other assessing official with an
   opportunity to respond to the appeal and permit the commissioner of the
   revenue or other assessing official to participate in the proceedings. The Tax
   Commissioner shall issue a determination to the taxpayer within 90 days of
   receipt of the taxpayer&#8217;s appeal, unless the taxpayer and the
   commissioner of the revenue or other assessing official are notified that a
   longer period will be required. Such longer period of time shall not exceed 60
   days, and the Tax Commissioner shall notify the affected parties of the reason
   necessitating the longer period of time. If the Tax Commissioner is unable to
   issue a determination within the 60-day extension period due to the failure of
   an affected party to supply the Tax Commissioner with necessary information,
   the Tax Commissioner shall certify this fact in writing prior to the
   expiration of the extension period. The Tax Commissioner shall then issue his
   determination within 60 days of receipt of such necessary information.

   4. The appeal shall be treated as an application pursuant to &#xA7; 58.1-1821,
   and the Tax Commissioner may issue an order correcting such assessment of such
   property pursuant to &#xA7; 58.1-1822, if the taxpayer has met the burden of
   proof provided in &#xA7; 58.1-3987.

   5. The Tax Commissioner shall not make a determination regarding the valuation
   or the method of valuation of property subject to any local tax other than a
   local business tax.

E. Suspension of collection activity during administrative appeal to Tax
Commissioner. On receipt of a notice of intent to file an appeal to the Tax
Commissioner under subsection D, the treasurer or other official responsible for
the collection of such tax shall further suspend collection activity until a
final determination is issued by the Tax Commissioner, unless the treasurer or
other collection official (i) determines that collection would be jeopardized by
delay as defined in this section; or (ii) is advised by the commissioner or
other assessing official that the taxpayer has not responded to a request for
relevant information after a reasonable time. Interest shall accrue in
accordance with the provisions of subdivision A 2 e of &#xA7; 58.1-3703.1, 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 subsection D is filed and served on the necessary parties within 30
days of the service of the notice of intent to file such appeal.

F. Implementation of determination of Tax Commissioner. Promptly upon receipt of
a final determination of the Tax Commissioner, the commissioner of the revenue
or other local 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&#8217;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 subsection.

   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 this 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, 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 this 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, 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 the determination of a tax due 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,
   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 the determination of 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, 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
   refund to the taxpayer for the amount of tax due, together with interest
   accrued, within 30 days of the date of the new assessment.

G. Judicial review of determination of Tax Commissioner. Following the issuance
of a final determination of the Tax Commissioner pursuant to subsection D, 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 &#xA7; 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.

H. Suspension of payment of disputed amount of tax due upon taxpayer&#8217;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 &#xA7; 58.1-3984, of a determination of the Tax
   Commissioner pursuant to subsection D, and upon payment of the amount of the
   tax 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&#8217;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.

   4. The requirement that collection activity be suspended shall cease unless an
   application for judicial review pursuant to &#xA7; 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 business tax or local mobile
   property tax that is initiated by the direct filing of an action pursuant to
   &#xA7; 58.1-3984 without prior exhaustion of the appeals provided by
   subsections B and D.

I. Suspension of payment of disputed amount of refund due upon locality&#8217;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 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&#8217;s determination pursuant to &#xA7;
   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&#8217;s
   application for judicial review is frivolous, as defined in this section.

   2. No suspension of refund activity shall be permitted if the locality&#8217;s
   application for judicial review fails to identify with particularity the
   amount in dispute.

   3. The requirement that the obligation to make a refund be suspended shall
   cease unless an application for judicial review pursuant to &#xA7; 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.

J. Rulings and advisory opinions.

   1. Written rulings from commissioner of the revenue or other assessing
   official. Any taxpayer or authorized representative of a taxpayer may request
   a written ruling regarding the application of a local mobile property tax or a
   local business tax to a specific situation from the commissioner of the
   revenue or other assessing official. Any taxpayer requesting such a ruling
   shall provide all facts relevant to the situation and may present a rationale
   for the basis of an interpretation of the law most favorable to the taxpayer.
   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
   commissioner of the revenue or other assessing official notifies the taxpayer
   of a change in the policy or interpretation upon which the ruling was based.
   However, any taxpayer 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.

   2. Advisory opinions of the Tax Commissioner. The Tax Commissioner shall have
   the authority to issue advisory written opinions in specific cases as
   requested to interpret a local business tax and matters related to the
   administration thereof when an assessment of that tax is subject to appeal to
   the Tax Commissioner under this chapter. Opinions issued pursuant to this
   section shall not be applicable as an interpretation of any other tax law.

K. Record-keeping and audits. Every person who is assessable with a local mobile
property tax or a local business tax shall keep sufficient records to enable the
commissioner of the revenue or other assessing official to verify the
correctness of the tax paid for the taxable years assessable and to enable the
commissioner of the revenue or other assessing official to ascertain the correct
amount of tax assessable for each of those years. All such records, books of
accounts and other information shall be open to inspection and examination by
the commissioner of the revenue or other assessing official in order to allow
him to establish whether the tax is due within this jurisdiction. The
commissioner of the revenue or other assessing official shall provide the
taxpayer with the option to conduct the audit in the taxpayer&#8217;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 commissioner&#8217;s or assessor&#8217;s office
upon demand.

HISTORY: 1999, cc. 202, 470; 2002, c. 525; 2003, c. 196; 2004, cc. 527, 534;
2005, c. 927; 2006, c. 611.