Tax Type
BPOL Tax
Description
BPOL; Evasive taxpayers
Topic
Local Power to Tax
Date Issued
06-13-1997
June 13, 1997
Re: Request for Advisory Opinion: BPOL
Dear**********************
This will respond to your letter transmitted by facsimile on March 18, 1997, in which you asked what legal remedies are available to a locality when a taxpayer refuses to report gross receipts on a BPOL tax return.
The license tax is a local tax which is imposed and administered by local officials. The Code of Virginia limits the involvement of the Department of Taxation to promulgating guidelines and issuing advisory written opinions. However, the department shall not be required to interpret any local ordinance.
While addressing the questions raised in your letter, this response is intended to provide advisory guidance only and does not constitute a formal or binding ruling.
FACTS
Several businesses in the locality have refused to report gross receipts when filing a local license tax return. Consequently, the locality does not have the correct information available for levying a license tax on these businesses for the privilege of engaging in business within the locality. The locality is interested in pursuing legal action. You ask what legal remedies are available to the locality and what steps in what order the locality should take.
OPINION
DUTIES AND POWERS OF A COMMISSIONER OF THE REVENUE AND TOWN TREASURERS
A commissioner of the revenue of a county or city is required to obtain full and complete tax returns from taxpayers within the commissioner's jurisdiction who are liable for local taxes. Code of Virginia § 58.1-3107 (copy enclosed). With respect to the local license tax, county or city commissioners of the revenue can require taxpayers to furnish financial information and can audit taxpayer financial records. Code of Virginia § 58.1-3109 (6); § 58.1-3703.1 A 6 (copies enclosed). However, the duties and powers of a county or city commissioner of the revenue are limited to the boundaries of their respective county or city. Code of Virginia § 58.1-3102 (copy enclosed).
Town treasurers have similar powers as county or city commissioners of the revenue. In making and collecting a local license tax assessment, town treasurers can also require taxpayers to furnish financial information and can audit taxpayer financial records. Code of Virginia § 58.1-3939.1; § 58.1-3703.1 A 6 (copies enclosed).
ENFORCEMENT OF A COMMISSIONER'S AND TOWN TREASURER'S POWERS
Commissioners of the revenue of a county or city and town treasurers have choices in enforcing compliance with local license law. For taxpayers refusing to submit gross receipts figures, commissioners of the revenue of a county or city and town treasurers may summons the taxpayer to appear at the commissioner's or treasurer's office to answer, under oath, questions touching the local license tax liability of the taxpayer. Code of Virginia § 58.1-3110; § 58.1-3939.1 (copies enclosed).
Any person refusing to furnish access to financial records or refusing to furnish information relating to the assessment of taxes to a county or city commissioner of the revenue is subject to criminal charges. Code of Virginia § 58.1-3111 (copy enclosed). Additionally, a county, city, or town ordinance may prescribe criminal penalties for taxpayers intentionally filing false returns. Code of Virginia § 58.1-3916.1 (copy enclosed). Notwithstanding the provisions of a local ordinance, a taxpayer intentionally filing a false return is still subject to criminal charges under Code of Virginia § 58.1-11 (copy enclosed).
Finally, Chapter 39 of Title 58.1 of the Code of Virginia provides other means that can be used by a locality in assessing and collecting local taxes.
The Code of Virginia does not specify the order in which any collection or audit activities must be conducted. This is a decision to be made by the local attorney.
I hope that the above information will be beneficial to you. Although I believe this letter conforms with the law, it is written only for your guidance, and the final determination is with the locality.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/12454C
Rulings of the Tax Commissioner