CITY OF CHARLOTTESVILLE, VIRGINIA
                 CITY COUNCIL AGENDA




  Agenda Date:          April 4, 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 is a contracting company that incorrectly filed and paid for a 2020 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 2020 business license was $11,200.
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 $1,686.44.

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 $12,886.44.

Alternatives:

None.

Recommendation:

Approval of the tax refund.

Suggested Motion: “I move the RESOLUTION authorizing a refund of $12,866.44 to a taxpaying
entity or business, for business license taxes paid in error for 2020”

Attachments:

Interest Calculation

Council Resolution
Suggested Motion: “I move the RESOLUTION authorizing a refund of $12,866.44 to a taxpaying entity
or business, for business license taxes paid in error for 2020”

                                           RESOLUTION

    Authorizing a refund of $12,866.44 to a taxpaying entity or business, for
                  business license taxes paid in error for 2020
       WHEREAS, the Commissioner of the Revenue has determined that a taxpaying entity or
business paid 2020 Business License Tax to the City of Charlottesville in error; and

        WHEREAS, that taxpaying entity or business 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 $12,866.44; 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 $12,886.44, payable to that
taxpaying entity or business.