§ 26-891. Time of assessment and payment; penalties and interest; rates of interest.

(a)

Except as otherwise provided, every license tax assessable under this article shall be assessable on the first day of the license tax year and shall be due and payable on the first day of the license tax year. The following penalty may be imposed upon the failure to file an application or the failure to pay the tax by the appropriate due date: ten percent of the tax, or $10.00, whichever is greater. In no case shall the penalty exceed the amount of the tax. Only the late payment penalty shall be imposed unless the assessing official determines that the taxpayer has a history of noncompliance. If an assessment of additional tax is made by the assessing official, 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.

(b)

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 at the rate allowed by Code of Virginia, § 58.1-3916. Whenever an assessment of additional or omitted tax by the assessing official is found to be erroneous, all interest and penalty 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 paid under this article from the date of payment or due date, whichever is later, whether attributable to an amended return or other reason. Interest on any refund shall be paid at the same rate charged under Code of Virginia, § 58.1-3916.

(c)

No interest shall accrue on an adjustment of estimated tax liability to actual liability at the conclusion of a base year, provided the additional taxes are remitted by March 1 of the tax year following the tax year for which the taxes were originally estimated.

(d)

No interest shall be paid on a refund or charged on a late payment, if such adjustment occurs, 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.

(e)

Every person beginning business shall pay the license tax at once. If such license tax is not paid within 30 days from the beginning of business, the license tax shall be subject to penalty and interest, as prescribed in this section, from the 31st day after the date of beginning business until the date of payment.

(f)

If any assessment of tax by the assessing official is not paid within 30 days, the Collector may impose a ten percent late payment penalty. The penalties shall not be imposed or if imposed shall be abated by the official who assessed them, if the failure to file or pay was not the fault of the taxpayer. In order to demonstrate lack of fault, the taxpayer must show that the taxpayer acted responsibly and that the failure was due to events beyond the taxpayer's control.

(g)

The Director of Finance may grant an extension of time in which to file an application for a license, for reasonable cause. The extension may be conditioned upon the timely payment of a reasonable estimate of the appropriate tax. The tax is then 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 ten percent of the portion paid after the due date.

(Code 1993, § 27-335; Code 2004, § 98-654)

(Code 1993, § 27-335; Code 2004, § 98-654)