When this story first broke last week, something seemed fishy. I am all for someone who was double-taxed getting a refund. I’m also all for saving the city money, but not when it means breaking the law to do so.
The city quotes a section of law saying the court must decide to justify bypassing the court, then tells us that the 3 years clause mentioned in the code limits their ability to get the rehabilitation credit back.
The city quoted a state statute reading in part, “When it is shown to the satisfaction of the court that there has been a double taxation … the court may order such erroneous taxes to be corrected.”
“We resolved a matter which the property owner had a right to bring to court,” said William Hutchings, deputy city attorney. (Source – Suffolk News Herald)
The relevant portion of the Virginia state code can be found in § 58.1-1820 – 1830, especially § 58.1-1825, § 58.1-1826, & § 58.1-1827.
VA State Code § 58.1-1825 says in Paragraph A that anybody who has issue with their taxes is supposed to file in court:
A. Any person assessed with any tax administered by the Department of Taxation and aggrieved by any such assessment, or aggrieved by an action by the Department with respect to a transferred credit or other tax attribute, may, unless otherwise specifically provided by law, within (i) three years from the date such assessment is made or (ii) one year from the date of the Tax Commissioner’s determination under § 58.1-1822, whichever is later, apply to a circuit court for relief. The venue for such proceeding shall be as specified in subdivision 13 b of § 8.01-261. The application shall be before the court when it is filed in the clerk’s office.
The most relevant paragraph in the VA State Code is:
§ 58.1-1827. Correction of double assessments.
Irrespective of the foregoing provisions, when it is shown to the satisfaction of the court that there has been a double assessment in any case, one of which assessments is proper and the other erroneous, and that a proper single tax has been paid thereon, the court may order that such erroneous assessment be corrected, whether the erroneous tax has been paid or not and even though the application was not made within the period of limitation, as herein before required.
Both of those sections of State Code specifically say that the court is an integral part of the equation, yet the City Assessor approved of the refund, and the City Treasurer cut the check on March 19, 2013, with NO involvement from the City Attorney, City Manager, or City Council. The worst part, according to City Spokesperson Debbie George, there are no settlement documents.
“There was no settlement document,” George stated. “The city attorney and the city manager were not aware of the refund until after it had been issued.”
If that wasn’t bad enough, we also found out that Nansemond Cold Storage was receiving a rehabilitation credit they there were not entitled to receive. But according to the city, we can not recoup that money at all.
The city now says the same three-year rule it claims it lawfully circumvented to issue the costly refund also drastically limited how far it could back-charge Nansemond Cold Storage for lost revenue from the erroneous rehabilitation credit.
Maybe, if they had taken this to court like the law says, maybe the court would have been able to decide that the Rehab Credit erroneously given, should be deducted from the amount refunded, since Nansemond Cold Storage already had that money. But we will never know, because the CITY DID NOT OBEY THE LAW!