Title
Request for Approval of Refund of Certain Erroneously Assessed Bank Franchise Tax Levied on Branch Banking and Trust Company
Purpose
PURPOSE/BACKGROUND:
The City Treasurer shall issue refunds of local tax, penalty, and interest assessed and paid, owing to a taxpayer due to an erroneous assessment. Pursuant to Hampton City Code Section 37-2(b) and Code of Virginia Section 58.1-3981, no refund in excess of $2,500 per invoice shall be made until the amount is approved by the City Attorney and the City Council.
Discussion:
The Virginia Bank Franchise Tax (Code of Virginia Sec. 58.1-1201 et. seq.; "Bank Franchise Tax") is imposed on the net capital of banks and trust companies. The Bank Franchise Tax is administered at both the state and local level, with primary return filing and audit responsibilities resting with Commonwealth. Branch Banking and Trust Company ("BB & T") timely filed an amended returns for tax years 2012- 2014 with the Commonwealth, and advised localities of the request with the filing of its 2015 Bank Franchise Tax return. The Commonwealth and BB&T ultimately litigated the request. Earlier this year, localities throughout the state were made aware of the ultimate settlement of that matter through a comprehensive refund request. The statewide impact of this adjustment is $ 10,320,246.00; $37,392.00 of which is attributed to the City of Hampton.
BB & T has agreed to accept the refund without payment of interest, which may be otherwise due under the Code of Virginia and/or the Hampton City Code.
Recommendation:
Rec
Approve the Resolution.
Body
WHEREAS, pursuant to Hampton City Code Section 37-2(b), the City Treasurer shall issue refunds of local tax, penalty, and interest owing to taxpayer, except that no refund in excess of $2,500 per invoice for tax, penalty, and interest, until the amount of the refund is approved by City Council in accordance with Code of Virginia Section 58.1-3981;
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