Subject:
Title
Consider approval of a Refund Payment Agreement to the Bank of America
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Presented By: City Attorney Brown.
Recommendation and Review
The City of Harrisonburg, like most other localities in the Commonwealth, has enacted a Bank Franchise Tax which is administered in large part by the Virginia Department of Taxation. Bank of America filed its Virginia Bank Franchise Tax Returns and paid the Bank Franchise Tax for tax years 2010, 2011, and 2012. Bank of America then filed amended returns for those years claiming a refund. The Virginia Department of Taxation audited Bank of America's returns and determined the bank is due a refund of $13,911,504. The Department of Taxation then apportioned that amount to the various localities in the Commonwealth which received bank franchise taxes from Bank of America. The city's portion of the refund to be paid to Bank of America is $52,391. Pursuant to the attached Refund Payment Agreement entered into by the Virginia Department of Taxation and Bank of America, if a locality refunds the amount owed to Bank of America by December 31, 2014, no interest is due on the refund.
Under Virginia code Section 58.1-3981(A), if an erroneous assessment has been paid into the treasury of the City, the Commissioner of the Revenue must certify to Council that the assessment was erroneous. The certification must be consented to by the City Attorney. If Council accepts the certification, it must directs the treasurer to refund to the taxpayer the amount erroneously paid.
The City's Commissioner of the Revenue has provided the required certification and the City Attorney has consented to the certification.
Staff recommends that council approved the Refund Payment Agreement and direct the treasurer to pay the amount erroneously assessed, $52,391, to Bank of America before December 31, 2014.