AGENDA DATE: 6/1/2016
TITLE:
Title
Tax Ordinance Amendments.
BODY
SUBJECT/PROPOSAL/REQUEST: Schedule a Public Hearing to Consider Proposed Tax Ordinance Amendments
ITEM TYPE: Consent Action Item
STAFF CONTACT(S): Foley, Letteri, Kamptner, Herrick, Burrell, Lamb
PRESENTER (S): N/A
LEGAL REVIEW: Yes
REVIEWED BY: Thomas C. Foley
BACKGROUND: Upon review of the County’s tax regulations, the Finance Department is recommending updates and improvements to eight sections of Chapter 15, Taxation, of the Albemarle County Code. These proposed revisions are intended both to improve the County’s collection practices and to bring the County Code into compliance with recent changes in state law.
STRATEGIC PLAN: Goal 4: Economic Prosperity -- Foster an environment that stimulates diversified job creation, capital investments, and tax revenues that support community goals
DISCUSSION: The proposed ordinances attached would revise eight sections of Chapter 15 (Taxation) of the County Code. Many of the proposed revisions are needed to stay current with recent changes to state law.
• Sec. 15-100 - Minimum Tax Penalty -- Imposes a $10 minimum penalty on unpaid taxes: Virginia Code
§ 58.1-3916 generally allows a penalty of 10% or $10 (whichever is greater) on unpaid taxes. The corresponding provision of the County Code currently allows only a penalty of 10%. In cases where the unpaid tax is less than $100, this proposed amendment would impose the $10 minimum penalty allowed by state law.
• Sec. 15-702 - Tax Relief for the Elderly/Disabled -- Clarifies definition of “income” for purposes of tax relief for the elderly and/or disabled: In determining qualification for tax relief for the elderly and/or disabled, Virginia Code § 58.1-3212 previously specified that income include only those sources of gross income that are subject to federal income tax. Now that the General Assembly has deleted that specification from state law, County staff is recommending that it likewise be removed from the definition of “income”.
• Sec. 15-706 - Tax Relief for the Elderly/Disabled Applications - Reduces the current requirement that existing tax relief recipients file an affidavit of financial information every year to once every three years, allowing annual re-certifications in the intervening years as enabled by Virginia Code § 58.1-3213(B).
• Sec. 15-802 - Use Value Assessment Applications - Deletes an unnecessary “late” filing extension for use value assessment applications, as those applications are already timely if filed within 30 days of the mailing of notices of a general reassessment
• Sec. 15-910 - Transient Occupancy Tax Penalty - Deletes the unnecessary specification that the Finance Director personally impose transient occupancy tax penalties. The amounts and conditions of those penalties would remain unchanged.
• Sec. 15-1102(F) - BPP Penalty - Allows a 10% penalty for the failure to file a business personal property return. This penalty is enabled by Virginia Code § 58.1-3916.
• Sec. 15-1213 - Food and Beverage Tax Penalty - Deletes the unnecessary specification that the Finance Director personally impose food and beverage tax penalties. Also conforms the minimum penalty to the amount allowed by Virginia Code § 58.1-3916.
• Sec. 15-1603 - Disabled Veterans’ Property Tax Exemption -- The 2011 legislation that initially granted property tax exemptions to disabled veterans raised a number of questions, many of which were answered by a 12-point opinion of the Attorney General. The General Assembly responded with a number of clarifying amendments. County staff is recommending amendments to the County ordinance to track the most current state law.
BUDGET IMPACT: While the budgetary impact of these proposed amendments is difficult to predict with any certainty, the following are staff’s best estimates of the impact of each proposal:
• Penalty Provision (§ 15-100) - $200 gain
• Redefinition of “Income” for Tax Relief (§ 15-702) - $10,000 gain due to reduction in tax exemption
• Tax Relief Applications (§ 15-706) - no loss or gain
• Land use Value applications (§ 15-802) - no loss or gain
• Transient Occupancy Tax Penalty (§ 15-910) - no loss or gain
• BPP Penalty (§ 15-1102(G)) - approximately $100,000 gain
• Food and Beverage Tax Penalty (§ 15-1213) no loss or gain
• Veteran’s Exemption (§ 15-1603) - $67,000 loss
Again, the proposed revisions with negative fiscal impacts are required, in order to conform the County Code to the Virginia Code.
RECOMMENDATION:
Recommendation
Staff recommends that the Board schedule and advertise a public hearing for July 6, 2016 to consider the attached proposed ordinance.
ATTACHMENTS:
A - Proposed Ordinance - Chapter 15 (Taxation)