Buchanan County, VA
 
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Chapter 88: TAXATION
Article V: Mineral Severance License Tax and Coal and Gas Road Improvement and Economic Development Tax
[Adopted 6-4-2012 Editor’s Note: This ordinance superseded former Art. V, Mineral Severance License Tax and Coal and Gas Road Improvement and Economic Development Tax, adopted 12-28-1995, as amended. ]

§ 88-23 Title.

The title of this article shall be "An Ordinance Imposing License on the Severing of Coal, Gas and Oil in Buchanan County, Virginia, Including a Local Coal and Gas Road Improvement Committee and Virginia Coalfield Economic Development Tax."

§ 88-23.1 Statutory authority.

This article is adopted pursuant to Virginia Code §§ 58.1-3712, 58.1-3712.1, 58.1-3713, 58.1-3713.3, and 58.1-3713.4 (the "Severance License Tax Statutes") and all other applicable sections of Chapters 37 and 39 of Title 58.1 of the Code of Virginia, as amended, whether or not the specific section is cited herein. Such adoption is by reference and is inclusive, including all tax collection and lien enforcement provisions provided by Virginia law. Any and all additional and applicable sections of Chapters 37 and 39 of Title 58.1 of the Code of Virginia, as amended, including but not limited to Virginia Code § 58.1-3703.1, are hereby adopted and incorporated herein by reference. Any amendments to any applicable sections of Chapter 37 and Chapter 39 of Title 58.1 of the Code of Virginia, as amended, shall be deemed to be incorporated into this article when they become effective, as if they were separately adopted.

§ 88-23.2 Effective date; effect on prior provisions, licenses and unpaid taxes.

A. This article revises, replaces, and supersedes all previously enacted ordinances under the Severance License Tax Statutes. This article shall be effective as of January 1, 2008. This article is intended to be applied in accordance with the terms stated herein. Past administrative practices in applying prior ordinances enacted pursuant to the Severance License Tax Statutes shall not apply in interpreting this article.
B. All unpaid taxes authorized by the Severance License Tax Statutes shall remain due and payable.
C. All persons having a valid mineral severance license granted pursuant to the County's previously enacted ordinances under the Severance License Tax Statutes shall be deemed to have a license pursuant to this article until such time as such licenses must be renewed as provided herein.
D. The penalties for violations of the County's previously enacted ordinances under the Severance License Tax Statutes prior to the effective date shall remain applicable and in full force and effect.
E. All assessments and collections previously made pursuant to the Severance License Tax Statutes prior to the effective date shall remain applicable and are hereby affirmed and ratified pursuant to appropriate statutory authority.

§ 88-24 Definitions.

The following words, terms, and phrases, when used in this article, shall have the meaning ascribed to them in this section, except where the context clearly indicates a different meaning or if modified by an agreement entered by a taxpayer with the County pursuant to Va. Code § 58.1-3712(B):
CLOSELY HELD CORPORATION
A corporation not publicly traded and having 20 or fewer shareholders.
COAL
Includes any mineral deposit composed predominantly of hydrocarbons in a solid state.
COALBED METHANE GAS
Occluded natural gas produced from coalbeds and rock strata associated therewith.
COAL OPERATOR
Any person who has the right to operate or does operate a coal mine.
COMMON CARRIER
Any person involved in any phase of the transportation of coal, oil, or gas within the County or from the County. This includes, but is not limited to, the receiving, collection, or assembly of coal, oil, or gas for conveyance from one mode of transportation to another or to the same mode of transportation, as well as the actual movement of the coal, oil, or gas in shipment.
CONTRACT MINING AGREEMENT
A contract or other agreement pursuant to which a person or entity engages in a mining operation to produce mineral(s), but is not free to sell the mineral(s) in a competitive market.
FAIR MARKET VALUE
A. In circumstances where the mineral is sold by arms-length transaction between unrelated persons, the sale price of the mineral;
B. In circumstances where the mineral is sold in a related-party transaction, pursuant to a contract mining agreement, or under other circumstances that indicate that the sale is not an arms-length transaction, the average sale price received by the person engaged in the business of severing coal, oil, or gas from the earth in arms-length transactions for the sale of other minerals of comparable quality produced from a comparable area during the same time frame or, if none, the sale price for other such minerals of comparable quality as indicated by either appropriate regional indices or sales by other persons engaged in the severance of similar minerals within the County or neighboring counties;
C. In circumstances where the mineral is utilized by a person engaged in the business of severing coal, oil, or gas from the earth without direct remuneration, the average sale price received by that person in arms-length transactions for the sale of other minerals of comparable quality produced from the area during the same time frame or, if none, the sale price for other such minerals of comparable quality as indicated by either appropriate regional indices or sales by other persons engaged in the severance of similar minerals within the County or neighboring counties.
GAS
All natural gas, including coalbed methane gas, whether hydrocarbon or nonhydrocarbon or any combination or mixture thereof, including hydrocarbons, hydrogen sulfide, helium, carbon dioxide, nitrogen, hydrogen, casing head gas, and all other fluids not defined as oil herein.
GROSS RECEIPTS
A. Except in the case of persons engaging in the production and operation of severing gases from the earth in connection with coal mining, "gross receipts" means the fair market value of the severed coal, oil, or gas measured at the time the coal, oil, or gas is utilized or sold for utilization in the County or at the time the coal, oil, or gas is placed in transit for shipment from the County. When such minerals are placed in transit for shipment from the County, fair market value may be reduced by deducting reasonable costs actually incurred by the person engaged in the business of severing coal, oil, or gas from the earth in processing or transporting the mineral after it is placed in transit for shipment from the County prior to sale of the mineral.
B. For persons engaging in the production and operation of severing gases from the earth in connection with coal mining, "gross receipts" means the fair market value of the gas measured at the time it is utilized or sold for utilization in the County or at the time it is placed in transit for shipment from the County, with no deduction or allowance for costs.
C. In all circumstances, "gross receipts" includes the royalty share of the mineral(s) severed and all minerals subject to a royalty obligation.
MINERAL or MINERALS
Coal, oil, or gas.
MINING OPERATION
Any act or activity which results in the severing of coal, oil, or gas from the earth.
OIL
Natural crude oil or petroleum and other hydrocarbons, regardless of gravity, which are produced at the well in liquid form by ordinary production methods and which are not the result of condensation of gas after it leaves the underground reservoir.
OWNER
The owner of a legal or equitable interest in coal, oil, or gas at the time of severance.
PERSON
Includes any individual, firm, partnership, limited-liability company, corporation, cooperative, joint venture, association, estate, trust, business trust, trustee, trustee in bankruptcy, any person acting under a declaration of trust, executor, administrator, partner, agent, receiver, syndicate, assignee, or other group or combination acting as a unit, in the plural as well as in the singular number.
PERSON ENGAGED (OR ENGAGING) IN THE BUSINESS OF SEVERING COAL, OIL, OR GAS FROM THE EARTH
Where the minerals are unleased, the owner(s) of such minerals; or, where the minerals are leased, the lessee of the mineral or the lessee of the right to mine or produce such minerals. A person or entity engaged in a mining operation under contract or agreement to sever the mineral, but who is not free to sell the mineral(s) in a competitive market, is not a person engaged in the business of severing coal, oil, or gas from the earth.
PLACED IN TRANSIT FOR SHIPMENT FROM THE COUNTY
The point in distribution of the severed mineral at which the mineral is placed in final shipment from the County with no additional treatment, processing, compression, handling, or mechanical manipulation to be performed within the County. Except in cases where gas is produced at the wellhead at sufficient pressure and quality such that it is not treated in any manner or compressed by mechanical compressor within the County, gas is not placed in transit for shipment from the County at the wellhead.
SEVERING, SEVERANCE and SEVERED
The taking of any coal, oil, or gas from any land, soil, or slag piles situated in the County in any manner whatsoever.
SEVERING GASES FROM THE EARTH IN CONNECTION WITH COAL MINING
Producing coalbed methane gas from wells that directly or indirectly remove gas from:
A. Units or permitted well areas which include coal seams that have been fractured by current or previous mining activities ("GOB wells"); and
B. Units or permitted well areas which include coal seams that have been fractured in the absence of mining ("FRAC wells"), but where all or some of the fractured coal seams are within a permitted mine boundary or within the area projected for mining by the twenty-year mine plan map for any coal operator.
UTILIZED or UTILIZE
To put to beneficial use for such purposes as facility heating, power generation, machinery operation, equipment operation, and similar uses. Utilized minerals include coal, oil, or gas that is severed from the earth within the County and used by the person engaged in the business of severing coal, oil, or gas from the earth (or those acting on his behalf, at his direction, or with his permission or consent) in some beneficial manner, in which case the severed and utilized mineral shall be deemed to have been sold for the fair market value of such mineral.

§ 88-25 Taxes levied.

A. A license tax is hereby levied and imposed pursuant to § 58.1-3712 of the 1950 Code of Virginia, as amended, on every person engaged in the business of severing coal or gas from the earth. Such tax shall be at a rate of 1% of gross receipts.
B. In addition to the taxes levied in Subsection A herein, a license tax is hereby levied and imposed pursuant to § 58.1-3713 of the 1950 Code of Virginia, as amended, on every person engaged in the business of severing coal or gas from the earth, which tax shall be used for the purposes set forth in § 58.1-3713. Such tax shall be at a rate of 1% of gross receipts.
C. In addition to the taxes levied in Subsections A and B herein, a license tax is hereby levied and imposed pursuant to § 58.1-3713.4 of the 1950 Code of Virginia, as amended, on every person engaged in the business of severing gas from the earth. Such tax shall be at a rate of 1% of gross receipts.
D. A license tax is hereby levied and imposed pursuant to § 58.1-3712.1 of the Code of Virginia, as amended, on every person engaged in the business of severing oil from the earth. Such tax shall be at a rate of 1/2 of 1% of gross receipts.
E. The foregoing taxes are hereby levied and imposed in addition to all other taxes and fees of every kind now imposed by law upon every person engaged in the business of severing coal, oil, or gas from the earth.

§ 88-26 Licensing.

A. It shall be unlawful for any person to engage in the business of severing coal, oil, or gas from the earth within the County or to cause others to sever coal, oil, or gas from the earth within the County unless the person engaging in the business of severing coal, oil, or gas from the earth has first obtained a current license to do so issued by the Commissioner of Revenue.
B. Every person engaged in the business of severing coal, oil, or gas from the earth shall file with the Commissioner of Revenue an application for a license for each of such person's mining operations in the County. Every application shall be signed by each such person or an authorized representative of such person. In connection with any such application, the person engaged in the business of severing coal, oil, or gas from the earth shall provide such information as the Commissioner of Revenue may require.
C. Every person engaged in the business of severing coal, oil, or gas from the earth who did not have a license to sever coal, oil, or gas in the County in the previous license tax year shall file an application as provided herein prior to beginning any severance of coal, oil, or gas in the County.
D. Every person engaged in the business of severing coal, oil, or gas from the earth who had a license or licenses to sever coal, oil, or gas in the County in the previous license tax year shall file an application for the renewal of such license or licenses on or before March 1 of the current license tax year. In such case, the existing license shall remain in effect until the new license is issued. Issuance of a new license may be conditioned upon receipt by the Commissioner of Revenue of a written report from the County Treasurer documenting such person's payment of any license taxes due or an arrangement for the payment of any license taxes.
E. The Commissioner of Revenue may grant an extension of time in which to file an application for a license or renewal thereof, for reasonable cause. The extension may be conditioned upon the timely payment of a reasonable estimate of the appropriate tax. Any such estimated tax is subject to adjustment to the correct tax at the end of the extension, together with interest from the due date until the date paid and, if the estimate submitted with the extension is found to be unreasonable under the circumstances, with a penalty of 10% of the portion paid after the due date.
F. When the required application has been made, the Commissioner of Revenue shall issue to each applicant who has met all of the requirements of this article a separate license for each mining operation within the County, which license shall not be transferable.
G. No license shall be issued or reissued under this section to a person who owns, or is an agent for a person who owns, an interest in a mining operation conducted by a person owing delinquent taxes at the time the application is submitted, or to a person who owes, or is an agent for a person who owes, delinquent taxes. When such facts are known to the Commissioner of Revenue, he may, at his election, hold the hearing provided for in Subsection H of this section. An arrangement for payment of delinquent taxes made by the County Treasurer may be treated as payment for the purposes of this section.
H. Whenever any person fails to comply with any provision of this article, the Commissioner of Revenue may hold a hearing after giving such person 10 days' notice, in writing, specifying the time and place of hearing and requiring the person to show cause why his license should not be revoked or suspended or his application for renewal of his license should not be denied. The Commissioner of Revenue may revoke or suspend or deny reissuance of any one or more of the licenses held by such person.

§ 88-27 Returns.

Every person engaged in the business of severing coal, oil, or gas from the earth required to pay any of the taxes imposed by this article shall, on or before the 20th day of each month, transmit to the Commissioner of Revenue, upon a form furnished by the Commissioner, a completed return showing such information as the Commissioner of Revenue may require, including the quantities of coal, oil, and gas produced from each mining operation; the gross receipts from all coal, oil, or gas severed from each mining operation during the immediately preceding calendar month; and the names and addresses of any owners or other persons participating in each mining operation, any persons who are members of an affiliated group of which the operator is a member and to whom the coal, oil, or gas was sold or placed into transit for shipment from the County, and all persons having an economic interest in the mining operation. In the event that any date on which a return is to be filed falls upon a Saturday, Sunday, legal holiday, or other date on which the County Courthouse is closed, then the time for the filing of such return shall be extended until the next day that the Commissioner of Revenue's office is open for business. This return shall be made under oath and subject to the penalty for perjury. The Commissioner of Revenue shall transmit to the County Treasurer forthwith all records related to the taxes owed by and the payments received from each operator.

§ 88-28 Payment of tax; penalty and interest on delinquencies.

A. At the time of transmitting the return required by § 88-27 to the Commissioner of Revenue, the person engaged in the business of severing coal, oil, or gas from the earth shall remit to the County Treasurer therewith the amount of tax due under the applicable provisions of this article. Failure to remit such tax by the deadline for filing the return required by § 88-27 shall cause such tax to become delinquent.
B. A penalty of 10% of the tax may be imposed upon the failure to file an application for a license or the failure to pay the required tax by the appropriate due dates set forth in this article. Only the late filing penalty shall be imposed by the Commissioner of Revenue if both the application and tax payment are late; however, both penalties may be assessed if the Commissioner of Revenue determines that the taxpayer has a history of noncompliance. In the case of an assessment of additional tax made by the Commissioner of Revenue, if the application and, if applicable, the return were made in good faith and the understatement of the tax was not due to any fraud or reckless or intentional disregard of the law by the taxpayer, there shall be no late payment penalty assessed with the additional tax. If any assessment of tax by the Commissioner of Revenue is not paid within 30 days, the County Treasurer may impose a late payment penalty of 10%. If the failure to file or pay was not the fault of the taxpayer, the penalties shall not be imposed or, if imposed, shall be abated by the County Treasurer. In order to demonstrate lack of fault, the taxpayer must show that he acted responsibly and that the failure was due to events beyond his control.
(1) "Acted responsibly" means that the taxpayer exercised the level of reasonable care that a prudent person would exercise under the circumstances in determining the filing obligations for the business; and the taxpayer undertook significant steps to avoid or mitigate the failure, such as requesting appropriate extensions (where applicable), attempting to prevent a foreseeable impediment, acting to remove an impediment once it occurred, and promptly rectifying a failure once the impediment was removed or the failure discovered.
(2) "Events beyond the taxpayer's control" include, but are not limited to, the unavailability of records due to fire or other casualty; the unavoidable absence (e.g., due to death or serious illness) of the person with the sole responsibility for tax compliance; or the taxpayer's reasonable reliance in good faith upon erroneous written information from the assessing official who was aware of the relevant facts relating to the taxpayer's business when he provided the erroneous information.
C. Interest shall be charged on the late payment of the tax from the due date until the date paid without regard to fault or other reason for the late payment. Whenever an assessment of additional or omitted tax by the Commissioner of Revenue is found to be erroneous, all interest and any penalties charged and collected on the amount of the assessment found to be erroneous shall be refunded, together with interest on the refund from the date of payment or the due date, whichever is later. Interest shall be paid on the refund of any tax from the date of payment or due date, whichever is later, whether attributable to an amended return or other reason. However, no interest shall be paid on a refund or charged on a late payment, provided the refund or the late payment is made not more than 30 days from the date of the payment that created the refund or the due date of the tax, whichever is later. Interest charged on any late payment or paid on any refund shall be calculated at the same rate charged under Virginia Code § 58.1-3916. No interest shall accrue on an adjustment of estimated tax liability to actual liability at the conclusion of a base year.
D. The County Treasurer and the Commissioner of Revenue shall reconcile their records monthly concerning the identities of taxpayers, amounts received, outstanding taxes due, and, if applicable, any arrangements made by the County Treasurer for payment of delinquent taxes.

§ 88-29 Commissioner's hearing upon failure to comply.

Whenever any person fails to comply with any provision of this article, the Commissioner of Revenue may hold a hearing, after giving such person 10 days' notice, in writing, specifying the time and place of hearing and requiring him to show cause why his license should not be revoked or suspended or his application for renewal denied. The Commissioner of Revenue may revoke or suspend and may also deny reissuance of any one or more of the licenses held by such person.

§ 88-30 Failure to make returns.

In the event any person engaged in the business of severing coal, oil, or gas from the earth fails to make a return as provided by this article, the Commissioner of Revenue shall give such person 10 days' notice, in writing, requiring such person to appear before him with such books, records, and papers as the Commissioner of Revenue may require relating to the business of such person for such taxable period, and the Commissioner of Revenue may require such person or the agents and employees of such person to give testimony or to answer interrogatories under oath respecting such mining or extraction of coal, oil, or gas or the failure to make a return thereof as provided in this article. If, after being provided with the opportunity to supply such information, such person still fails to make a return or refuses to permit an examination of his books, records, or papers, or to appear and answer questions within the scope of such investigation, the Commissioner of Revenue is hereby authorized to make an estimate for the taxable period of the gross receipts for all such coal, oil, or gas severed by or at the direction of such person and to assess the appropriate tax, plus penalties and interest in accordance with § 88-28, based upon such information as may be available to him. The County Treasurer may issue a warrant for the collection of any such taxes and penalties so found to be due. The assessment so made shall be deemed prima facie correct. In addition, the Commissioner of Revenue may, upon reasonable notice, assess taxes for such mining operation against any other person liable for the tax.

§ 88-30.1 Cessation of mining operations.

If the holder of a license issued under this article ceases to conduct a mining operation, the license shall thereupon expire, and such license holder shall inform the Commissioner of Revenue, in writing, within 30 days thereafter that he has ceased to conduct such mining operation. A copy of such report, upon receipt thereof, shall be forwarded to the County Treasurer.

§ 88-31 Bond or deposit of securities to assure payment of tax.

A. The Commissioner of Revenue may, when in his judgment it is necessary and advisable to do so in order to secure the collection of the taxes levied by this article, require any person subject to such taxes to file with him a bond, secured by a surety company authorized to do business in this commonwealth, as surety, in such reasonable amount as the Commissioner of Revenue may fix, to secure the payment of any tax, penalty, or interest due or which may become due from such person under this article. In lieu of such bond, securities approved by the Commissioner of Revenue may be deposited with the County Treasurer, which securities shall be kept in the custody of the County Treasurer and shall be sold by him, at the direction of the Board of Supervisors, at public or private sale, without notice to the depositor thereof, if it becomes necessary in order to collect any tax, penalty, or interest due the County under this article. Upon any such sale, the surplus, if any, above the amounts due under this article shall be returned to the person who deposited the securities.
B. The securities authorized by this section may include, without limitation, stock in any corporation engaged in the business of severing coal, oil, or gas from the earth, a contract or lease for mining rights, a deed of trust in real estate, a security interest in personal property, or other such devices to ensure the payment of debt.

§ 88-32 Maintenance of records.

A. Every person who is assessable with a license tax under this article or who is a common carrier of coal, oil, or gas shall keep sufficient records, including, but not limited to, records showing the source and quantity of, and gross receipts on payments for, the coal, oil, and gases which he/she has produced or transported, or for which he/she has received some economic benefit, to enable the Commissioner of Revenue to verify the correctness of the tax paid for the license months or years assessable and to enable the Commissioner of Revenue to ascertain what is the correct amount of tax that was assessable for each of those months or years. All such records, books of accounts, and other information shall be open to inspection and examination by the Commissioner of Revenue in order to allow the Commissioner of Revenue to establish whether a particular receipt is directly attributable to the taxable privilege exercised within the County. The Commissioner of Revenue shall provide such persons with the option to conduct the audit in such person's local business office within the County, if the records are maintained there. In the event the records are maintained outside the County, copies of the appropriate books and records shall be sent to the Commissioner's office upon demand.
B. Any common carrier involved in the transportation of coal, oil, or gas within or from the County shall submit, upon request, to the Commissioner of Revenue records showing the source and quantity of, and, if purchased, the price paid for, all coal, oil, or gases which the common carrier acquired or transported during the applicable time periods. This information may be made available to any other political subdivision in which the coal, oil, or gas may have been severed.

§ 88-33 Distribution of taxes collected.

The taxes collected pursuant to this article shall be paid and distributed as provided by law. Any taxes not distributed according to specific provisions of law shall be paid into the general fund of the County. The taxes collected pursuant to Subsections B and C § 88-25 shall be distributed as follows:
A. One-fourth of the 1% collected pursuant to Subsection B of § 88-25 shall be paid to the Virginia Coalfield Economic Development Fund.
B. Three-fourths of the 1% collected pursuant to Subsection B of § 88-25 shall be paid to the County's Coal and Gas Road Improvement Fund and used for the purposes set forth in Virginia Code § 58.1-3713; however, portions of such funds may be used to fund the construction of new water and/or sewer systems and lines in areas with natural water supplies which are insufficient from the standpoint of quality or quantity pursuant to Virginia Code §§ 58.1-3713 and 58.1-3713.01.
C. After distribution in accordance with Subsection B above, the remaining Coal and Gas Road Improvement funds shall be spent for such improvements to public roads as the Coal and Gas Road Improvement Advisory Committee and the Board of Supervisors may determine.
D. One-half of the 1% collected pursuant to Subsection C of § 88-25 shall be paid to the Virginia Coalfield Economic Development Fund. The remaining revenue collected pursuant to Subsection C of § 88-25 shall be paid into the general fund of the County.

§ 88-34 Coal and Gas Road Improvement Advisory Committee established; membership; terms.

Pursuant to Virginia Code § 58.1-3713, there is hereby established a Coal and Gas Road Improvement Advisory Committee to be composed of four members as follows: A member of the Board of Supervisors of the County appointed by the Board of Supervisors; a representative of the Virginia Department of Transportation; and two citizen of the County connected with the coal and gas industries and to be appointed for a term of four years by the Chief Judge of the Circuit Court.

§ 88-35 Coal and gas road improvement plans.

Pursuant to Virginia Code § 58.1-3713, the Coal and Gas Road Improvement Advisory Committee shall develop, on or before July 1 of each year, a plan for improvement of roads during the following fiscal year. Such plan must have the approval of three members of the Committee and shall be submitted to the Board of Supervisors of the County for approval. The Board of Supervisors may approve or disapprove such plan but may make no changes without the approval of three members of the Committee.

§ 88-36 Use of County funds for coal and gas road improvements.

The Board of Supervisors may, in its discretion, and when permitted by applicable state law, elect to improve town roads with its funds, if consent of the town council is obtained.

§ 88-37 Violations and penalties.

A. The following persons shall be guilty of a Class 1 misdemeanor:
(1) Any person who engages in the business of severing coal, oil, or gas from the earth in this County without first obtaining a license or after a license has been suspended or revoked.
(2) Each officer or director of a corporation that engages in the business of severing coal, oil, or gas from the earth in this County without first obtaining a license or after a license has been suspended or revoked.
(3) Each shareholder of a closely held corporation that engages in the business of severing coal, oil, or gas from the earth in this County without first obtaining a license or after a license has been suspended or revoked.
(4) Any person who violates any provision of this article.
B. Each day of violation shall constitute a separate offense. No person shall be convicted under the provisions of Subsection A(2) and (3) of this section who shall have objected to the conduct of the mining operation, in writing, to the president or secretary of such corporation and forwarded a copy of this objection to the Commissioner of Revenue.
C. It shall be unlawful for any person:
(1) To fail to keep the records required by this article or fail to make such records available as herein required; or
(2) Willfully to fail to pay, collect, or truthfully account for and pay any license tax herein imposed; or
(3) Willfully to attempt in any manner to evade or defeat any such license tax or the payment thereof.
D. Each day of violation shall constitute a separate offense.
E. Violations under this section shall be Class 1 misdemeanors and shall be punishable by a fine not to exceed $2,500 for each day of violation and confinement in the County Jail for not more than 12 months, either or both in the discretion of the Court or jury trying the case. Conviction of a second offense under this section shall, in addition to a fine not to exceed $2,500, require confinement in the County Jail for not less than 10 days nor more than 12 months.
F. Any penalty imposed for violation of this section shall be in addition to the civil remedies or penalties provided for by law.

§ 88-38 Limitations on extensions of assessments and collections of tax.

A. Where, before the expiration of the time prescribed for the assessment of any license tax imposed pursuant to this article, both the Commissioner of Revenue and the taxpayer have consented, in writing, to its assessment after such time, the tax may be assessed at any time prior to the expiration of the period agreed upon. The period so agreed upon may be extended by subsequent agreements, in writing, made before the expiration of the period previously agreed upon.
B. Notwithstanding Virginia Code § 58.1-3903, the Commissioner of Revenue shall assess the license tax omitted because of fraud or failure to apply for a license for the current license tax year and the six preceding license tax years.
C. The period for collecting any local license tax shall not expire prior to the period specified in Virginia Code § 58.1-3940, two years after the date of assessment if the period for assessment has been extended pursuant to this section, two years after the final determination of an appeal for which collection has been stayed pursuant to Subsection B or D of § 88-39, or two years after the final decision in a court application pursuant to Virginia Code § 58.1-3984 or a similar law for which collection has been stayed, whichever is later.

§ 88-39 Administrative appeals to Commissioner of Revenue.

A. Definitions. For purposes of this section, the following terms shall have the meanings indicated:
AMOUNT IN DISPUTE
When used with respect to taxes due or assessed, the amount specifically identified in the administrative appeal or application for judicial review as disputed by the party filing such appeal or application.
APPEALABLE EVENT
An increase in the assessment of a license tax payable by a taxpayer, the denial of a refund, or the assessment of a license tax where none previously was assessed, arising out of the Commissioner of Revenue's examination of records, financial statements, books of account, or other information for the purpose of determining the correctness of an assessment; determination regarding the rate or classification applicable to the licensable business; assessment of a license tax when no return has been filed by the taxpayer; or denial of an application for correction of erroneous assessment attendant to the filing of an amended application for license.
FRIVOLOUS
A finding, based on specific facts, that the party asserting the appeal is unlikely to prevail upon the merits because the appeal is not well grounded in fact; not warranted by existing law or a good-faith argument for the extension, modification, or reversal of existing law; interposed for an improper purpose, such as to harass, to cause unnecessary delay in the payment of tax or a refund, or to create needless cost from the litigation; or otherwise frivolous.
JEOPARDIZED BY DELAY
A finding, based upon specific facts, that a taxpayer designs to depart quickly from the County; remove his property from the County; conceal himself or his property in the County; or do any other act tending to prejudice, or to render wholly or partially ineffectual, proceedings to collect the tax for the period in question.
B. Filing and contents of administrative appeal. Any person assessed with a license tax as a result of an appealable event as defined in this section may file an administrative appeal of the assessment within one year from the last day of the tax year for which such assessment is made, or within one year from the date of the appealable event, whichever is later, with the Commissioner of the Revenue. The appeal must be filed in good faith and sufficiently identify the taxpayer, the tax periods covered by the challenged assessments, the amount in dispute, the remedy sought, each alleged error in the assessment, the grounds upon which the taxpayer relies, and any other facts relevant to the taxpayer's contention. The Commissioner of Revenue may hold a conference with the taxpayer if requested by the taxpayer, or require submission of additional information and documents, an audit or further audit, or other evidence deemed necessary for a proper and equitable determination of the appeal. The assessment placed at issue in the appeal shall be deemed prima facie correct. The Commissioner of Revenue shall undertake a full review of the taxpayer's claims and issue a written determination to the taxpayer setting forth the facts and arguments in support of his decision.
C. Notice of right of appeal and procedures. Every assessment made by the Commissioner of Revenue pursuant to an appealable event shall include or be accompanied by a written explanation of the taxpayer's right to file an administrative appeal and the specific procedures to be followed in the County, the name and address to which the appeal should be directed, an explanation of the required content of the appeal, and the deadline for the filing of an appeal.
D. Suspension of collection activity during appeal. Provided a timely and complete administrative appeal is filed, collection activity with respect to the amount in dispute shall be suspended until a final determination is issued by the Commissioner of Revenue, unless the County Treasurer determines that collection would be jeopardized by delay as defined in Subsection A of this section; is advised by the Commissioner of Revenue that the taxpayer has not responded to a request for relevant information after a reasonable time; or is advised by the Commissioner of Revenue that the appeal is frivolous as defined in Subsection A of this section. Interest shall accrue in accordance with the provisions of Subsection C of § 88-28, but no further penalty shall be imposed while the collection action is suspended.
E. Procedure in event of nondecision. Any taxpayer whose administrative appeal to the Commissioner of Revenue pursuant to the provisions of this section has been pending for more than one year without the issuance of a final determination may, upon not less than 30 days' written notice to the Commissioner of Revenue, elect to treat the appeal as denied and appeal the assessment to the Tax Commissioner in accordance with the provisions of § 88-39.1. The Tax Commissioner shall not consider an appeal filed pursuant to the provisions of this article if he finds that the absence of a final determination on the part of the Commissioner of Revenue was caused by the willful failure or refusal of the taxpayer to provide information requested and reasonably needed by the Commissioner of Revenue to make his determination.

§ 88-39.1 Administrative appeal to Tax Commissioner.

A. Any person assessed with a local license tax as a result of a determination, upon an administrative appeal to the Commissioner of Revenue pursuant to § 88-39, that is adverse to the position asserted by the taxpayer in such appeal may appeal such assessment to the Tax Commissioner within 90 days of the date of the determination by the Commissioner of Revenue. The appeal shall be in such form as the Tax Commissioner may prescribe and the taxpayer shall serve a copy of the appeal upon the Commissioner of Revenue. The Tax Commissioner shall permit the Commissioner of Revenue to participate in the proceedings and shall issue a determination to the taxpayer within 90 days of receipt of the taxpayer's application, unless the taxpayer and the Commissioner of Revenue are notified that a longer period will be required. The appeal shall proceed in the same manner as an application pursuant to Virginia Code § 58.1-1821, and the Tax Commissioner may issue an order correcting such assessment pursuant to Virginia Code § 58.1-1822.
B. Suspension of collection activity during appeal. On receipt of a notice of intent to file an appeal to the Tax Commissioner pursuant to the provisions of Subsection A of this section, collection activity with respect to the amount in dispute shall be suspended until a final determination is issued by the Tax Commissioner, unless the County Treasurer (i) determines that collection would be jeopardized by delay, as defined in Subsection A of § 88-39; (ii) is advised by the Commissioner of Revenue, or the Tax Commissioner, that the taxpayer has not responded to a request for relevant information after a reasonable time; or (iii) is advised by the Commissioner of Revenue that the appeal is frivolous, as defined in Subsection A of § 88-39. Interest shall accrue in accordance with the provisions of Subsection C of § 88-28, but no further penalty shall be imposed while collection action is suspended. The requirement that collection activity be suspended shall cease unless an appeal pursuant to the provisions of Subsection A of this section is filed and served on the necessary parties within 30 days of the service of notice of intent to file such appeal.
C. Implementation of determination of Tax Commissioner. Promptly upon receipt of the final determination of the Tax Commissioner with respect to an appeal pursuant to the provisions of Subsection A of this section, the Commissioner of Revenue shall take those steps necessary to calculate the amount of tax owed by or refund due to the taxpayer consistent with the Tax Commissioner's determination and shall provide that information to the taxpayer and to the County Treasurer in accordance with the provisions of this article.
(1) If the determination of the Tax Commissioner sets forth a specific amount of tax due, the Commissioner of Revenue shall certify the amount to the County Treasurer and the County Treasurer shall issue a bill to the taxpayer for such amount due, together with interest accrued and penalty, if any is authorized by this article, within 30 days of the date of the determination of the Tax Commissioner.
(2) If the determination of the Tax Commissioner sets forth a specific amount of refund due, the Commissioner of Revenue shall certify the amount to the County Treasurer and the County Treasurer shall issue a payment to the taxpayer for such amount due, together with interest accrued pursuant to this article, within 30 days of the date of the determination of the Tax Commissioner.
(3) If the determination of the Tax Commissioner does not set forth a specific amount of tax due, or otherwise requires the Commissioner of Revenue to undertake a new or revised assessment that will result in an obligation to pay a tax that has not previously been paid in full, the Commissioner of Revenue shall promptly commence the steps necessary to undertake such new or revised assessment and shall provide the same to the taxpayer within 60 days of the date of the determination of the Tax Commissioner, or within 60 days after receipt from the taxpayer of any additional information requested or reasonably required under the determination of the Tax Commissioner, whichever is later. The Commissioner of Revenue shall certify the new assessment to the County Treasurer, and the County Treasurer shall issue a bill to the taxpayer for the amount due, together with interest accrued and penalty, if any, as authorized by this article, within 30 days of the date of the new assessment.
(4) If the determination of the Tax Commissioner does not set forth a specific amount of refund due, or otherwise requires the Commissioner of Revenue to undertake a new or revised assessment that will result in an obligation on the part of the locality to make a refund of taxes previously paid, the Commissioner of Revenue shall promptly commence the steps necessary to undertake such new or revised assessment and shall provide the same to the taxpayer within 60 days of the date of the determination of the Tax Commissioner, or within 60 days after receipt from the taxpayer of any additional information requested or reasonably required under the determination of the Tax Commissioner, whichever is later. The Commissioner of Revenue shall certify the new assessment to the County Treasurer, and the County Treasurer shall issue a refund to the taxpayer for the amount of tax due, together with interest accrued, within 30 days of the date of the new assessment.

§ 88-39.2 Judicial review of determination of Tax Commissioner.

A. Judicial review. Following the issuance of a final determination of the Tax Commissioner pursuant to Subsection A of § 88-39.1, the taxpayer or Commissioner of Revenue may apply to the Circuit Court for the County for judicial review of the determination, or any part thereof, pursuant to Virginia Code § 58.1-3984. In any such proceeding for judicial review of a determination of the Tax Commissioner, the burden shall be on the party challenging the determination of the Tax Commissioner, or any part thereof, to show that the ruling of the Tax Commissioner is erroneous with respect to the part challenged. Neither the Tax Commissioner nor the Department of Taxation shall be made a party to an application to correct an assessment merely because the Tax Commissioner has ruled on it.
B. Suspension of payment of disputed amount of tax due upon taxpayer's notice of intent to initiate judicial review.
(1) On receipt of a notice of intent to file an application for judicial review, pursuant to Virginia Code § 58.1-3984, of a determination of the Tax Commissioner pursuant to Subsection A of § 88-39.1, and upon payment of the amount of the tax that is not in dispute together with any penalty and interest then due with respect to such undisputed portion of the tax, the County Treasurer shall further suspend collection activity while the Court retains jurisdiction, unless the Court, upon appropriate motion after notice and an opportunity to be heard, determines that the taxpayer's application for judicial review is frivolous, as defined in Subsection A of § 88-39; collection would be jeopardized by delay, as defined in Subsection A of § 88-39; suspension of collection would cause substantial economic hardship to the County. For purposes of determining whether substantial economic hardship to the County would arise from a suspension of collection activity, the Court shall consider the cumulative effect of then-pending appeals filed within the County by different taxpayers that allege common claims or theories of relief.
(2) Upon a determination that the appeal is frivolous, that collection may be jeopardized by delay, or that suspension of collection would result in substantial economic hardship to the County, the Court may require the taxpayer to pay the amount in dispute, or a portion thereof, or to provide surety for payment of the amount in dispute, in a form acceptable to the Court.
(3) No suspension of collection activity shall be required if the application for judicial review fails to identify with particularity the amount in dispute.
(4) The requirement that collection activity be suspended shall cease unless an application for judicial review pursuant to Virginia Code § 58.1-3984 is filed and served on the necessary parties within 30 days of the service of the notice of intent to file such application.
(5) The suspension of collection activity authorized by this section shall not be applicable to any appeal of a license tax that is initiated by the direct filing of an action pursuant to Virginia Code § 58.1-3984 without prior exhaustion of the appeals provided by §§ 88-39 and 88-39.1.
C. Suspension of payment of disputed amount of refund due upon the County's notice of intent to initiate judicial review.
(1) Payment of any refund determined to be due pursuant to the determination of the Tax Commissioner of an appeal pursuant to Subsection A of § 88-39.1 shall be suspended if the County serves upon the taxpayer, within 60 days of the date of the determination of the Tax Commissioner, a notice of intent to file an application for judicial review of the Tax Commissioner's determination pursuant to Virginia Code § 58.1-3984 and pays the amount of the refund not in dispute, including tax and accrued interest. Payment of such refund shall remain suspended while the Court retains jurisdiction, unless the Court, upon appropriate motion after notice and an opportunity to be heard, determines that the County's application for judicial review is frivolous, as defined in Subsection A of § 88-39.
(2) No suspension of refund activity shall be permitted if the County's application for judicial review fails to identify with particularity the amount in dispute.
(3) The suspension of the obliga-tion to make a refund shall cease unless an application for judicial review pursuant to Virginia Code § 58.1-3984 is filed and served on the necessary parties within 30 days of the service of the notice of intent to file such application.
D. Accrual of interest on unpaid amount of tax. Interest shall accrue in accordance with the provisions of Subsection C of § 88-28, but no further penalty shall be imposed while collection action is suspended.

§ 88-39.3 Rulings.

Any taxpayer or authorized representative of a taxpayer may request a written ruling regarding the application of a license tax to a specific situation from the Commissioner of Revenue. Any person requesting such a ruling must provide all facts relevant to the situation placed at issue and may present a rationale for the basis of an interpretation of the law most favorable to the taxpayer. Any misrepresentation or change in the applicable law or the factual situation as presented in the ruling request shall invalidate any such ruling issues. A written ruling may be revoked or amended prospectively if there is a change in the law, a court decision, or the guidelines issued by the Department of Taxation upon which the ruling was based; or the Commissioner of Revenue notifies the taxpayer of a change in the policy or interpretation upon which the ruling was based. However, any person who acts on a written ruling which later becomes invalid shall be deemed to have acted in good faith during the period in which such ruling was in effect.

§ 88-39.4 Audits.

The Commissioner of Revenue is authorized to perform any audits in connection with his duty to assess the taxes levied by this article that, in his discretion, are necessary to enable him to verify the correctness of the tax paid for the license months or years assessable and to enable him to ascertain what is the correct amount of tax that was assessable for each of those months or years.

§ 88-39.5 Severability.

In the event any provisions of this article or any part, section, subsection, sentence, or phrase thereof should be held unconstitutional or otherwise void or invalid on any ground, such provision, part, section, subsection, sentence, or phrase shall be deemed severable and the remainder of this article shall remain in full force and effect.

§ 88-39.6 Incorporation of certain statutory provisions by reference.

It is the intention of this article to include the uniform ordinance provisions of § 58.1-3703.1, with the exception of Subdivisions A(1) and A(3) of such section. To the extent that any provision of this article is in conflict with the provisions of § 58.1-3703.1 or this article fails to recite or contain provisions substantially similar to the provisions set forth in § 58.1-3703.1 [with the exception of Subdivisions A(1) and A(3) of such section], such provisions of § 58.1-3703.1 are incorporated herein by reference and shall take precedence over any conflicting provisions in this article.