Tax Type
BPOL Tax
Description
Local commissioner can make determination to accept an offer in compromise
Topic
Local Taxes Discussion
Date Issued
04-06-2006
April 6, 2006
Re: Appeal of Local Determination
Taxpayer: *****
Locality Assessing Tax: *****
Business, Professional and Occupational License tax
Dear *******************:
This final state determination is issued upon an appeal filed by you on behalf of ***** (the "Taxpayer") with the Department of Taxation. You appeal a determination made by the Commissioner of the Revenue of the ***** (the "City") to reject an offer submitted by the Taxpayer and to audit the Taxpayer for tax years 2000 through 2005 for Business, Professional and Occupational License ("BPOL") tax purposes.
The following determination is based on the facts presented to the Department summarized below. The Code of Virginia sections cited are available on-line at www.tax.virginia.gov in the Tax Policy Library section of the Department's web site.
FACTS
This appeal addresses a dispute between the Taxpayer and the City regarding the Taxpayer's compliance with the City's BPOL ordinances. In 2001, the Taxpayer acquired another company ("Company A") that operated within the City. Although Company A had a definite place of business in the City since 1999, it paid no BPOL taxes to the City. Rather, Company A paid all of its license taxes to the ***** (the "County") where its headquarters were located. Upon acquisition, the Taxpayer continued this practice.
After an internal review, the Taxpayer sought and received a refund from the County for BPOL taxes erroneously paid for the years that were still within the statute of limitations (tax years 2002 through 2005). The Taxpayer also contacted the City, requesting that its assessment by the City be confined to the current year plus the preceding three years and that all penalties be waived. The City rejected this request and initiated an audit of the Taxpayer's records for tax years 2000 through 2005 under the provisions of Va. Code § 58.1-3703.1 A 4 b. The audit had not been completed at the time the Taxpayer's appeal was filed with the Tax Commissioner.
In its appeal, the Taxpayer asks the Tax Commissioner to find that the Taxpayer is entitled to a "limited look-back period and an abatement of penalties, due to [the Taxpayer's] proactive and good faith effort" to contact the City and comply with the local BPOL ordinances.
DETERMINATION
Under the provisions of Va. Code § 58.1-3994, a local commissioner of the revenue is authorized to accept offers in compromise from taxpayers who have failed to comply with the provisions of the tax law. This authority may be used to settle past liabilities of taxpayers that voluntarily disclose tax issues. All such offers must be submitted in writing and are accepted solely at the discretion of the commissioner of the revenue or other local assessing official responsible for the assessment of any local tax appealable under the provisions of Va. Code §§ 58.1-3703.1 and 58.1-3983.1.
The Taxpayer asks that the Department compel the City to limit the look-back period as a result of its voluntarily disclosing its tax status to the City. Under Va. Code § 58.1-3994, only the local commissioner of the revenue can make a determination to accept such an offer. The Department will not intervene in this decision. Accordingly, I must reject your request.
If you have any questions regarding this determination, you may contact ***** in the Office of Policy and Administration, Appeals and Rulings, at *****.
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- Sincerely,
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- Kenneth W. Thorson
Tax Commissioner
- Kenneth W. Thorson
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AR/56298H
Rulings of the Tax Commissioner