CITY OF CHARLOTTESVILLE, VIRGINIA
                 CITY COUNCIL AGENDA




  Agenda Date:          January 18, 2022

  Action Required:      Approval of Refund of Business License Tax Payment

  Presenter:            Todd Divers, Commissioner of the Revenue

  Staff Contacts:       Jason Vandever, City Treasurer
                        Todd Divers, Commissioner of the Revenue

  Title:                Refund of Business License Tax


Background:

Entity incorrectly filed and paid for a 2021 business license for a project that was located in
Albemarle County. The filing and payment was timely. The entity subsequently discovered that
it should have applied for and paid for a license in Albemarle County. It then applied to the
Commissioner of the Revenue for a refund of the license tax paid in error.

The City is required to refund business license taxes paid in error with interest per Code of
Virginia 58.1-3703.1 (A) (2) (e). The amount paid for the 2021 business license was $9,580.83.
In addition, Code of Virginia 58.1-3703.1 (A) (2) (e) states: “Interest shall be paid on the refund
of any BPOL tax from the date of payment or due date, whichever is later, whether attributable
to an amended return or other reason. Interest on any refund shall be paid at the same rate
charged under 58.1-3916.” The interest amount is $680.37.

Discussion:

City Code requires Council approval for any tax refunds resulting from an erroneous assessment
in excess of $2,500 (City Code Sec. 30-6b). Payment of interest is also required in accordance
with Section 14-12(g) of the Charlottesville City Code.

Per City Code Sec. 30-6(b), the Commissioner of the Revenue has provided to the City Attorney
information necessary to enable her to consent to the determination of the Commissioner of the
Revenue that the tax paid by the taxpayer was erroneous and should therefore be refunded. The
refund has therefore been approved for presentment to Council by the City Attorney,
Commissioner of the Revenue, and City Treasurer.

Alignment with City Council’s Vision and Strategic Plan:

n/a

Budgetary Impact:
The refund will reduce current year Business License Tax revenue (GL 410150) by $9,580.83
and Interest Revenue (GL 400120) by $680.37.

Recommendation:

Approval of the tax refund.

Alternatives:

n/a

Attachments:

Interest Calculation

Council Resolution
                                      Refund Interest Calculation
Payment Paid Date Refund Date Days Rate Payment Amount Annualized Interest Tax Refund Interest Refund
2021 BL  3/1/2021 1/19/2022 324 8% $             9,580.83 $         766.47 $ 9,580.83 $         680.37
                       RESOLUTION
    AUTHORIZING REFUND TO TAXPAYING ENTITY OF BUSINESS
                LICENSE TAXES PAID FOR 2021
       WHEREAS, the Commissioner of the Revenue has determined that Entity paid 2021
Business License Tax to the City of Charlottesville in error; and

       WHEREAS, Entity has requested a refund of the amount paid in error; and

        WHEREAS, the Commissioner of the Revenue has certified that a refund of taxes paid is
due in the amount of $10,261.20; and

       WHEREAS, City Code Section 30-6(b) requires City Council approval for any tax
refund exceeding $2,500.00; now, therefore,

      BE IT RESOLVED by the Council for the City of Charlottesville, Virginia, that the City
Council hereby authorizes the City Treasurer to issue a refund of $10,261.20, payable to Entity.