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24 September 05
Assessments: Localities that assess interest on delinquent taxes under Va. Code § 58.1-3916 may impose interest at a rate not to exceed 10% for the first year of delinquency, and at a rate not to exceed 10% or the federal underpayment rate in effect for the applicable quarter, whichever is greater, for the second and subsequent years of delinquency. For the fourth quarter of 2005, the federal underpayment rate is 7%.
Refunds: Effective July 1, 1999, localities which charge interest on delinquent taxes are required to pay interest to taxpayers on all overpayments or erroneously assessed taxes at the same rate as they charge interest on delinquent taxes under Va. Code § 58.1-3916.
We have been advised by one client that at least one local Commissioner of Revenue, Joseph Horbal, Commissioner of the Revenue of Chesterfield County, has refused to pay interest on improperly collected personal property taxes. This matter is being taken up with the Commissioner of the Virginia Department of Taxation directly.
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