City flouts rules in tax refundPublished 6:10pm Saturday, July 13, 2013
The city of Suffolk may have breached state law by refunding erroneous real estate taxes beyond a three-year limitation without a court ruling.
Nansemond Cold Storage was reimbursed $329,866.39 for erroneously paid taxes and interest on March 19, city Treasurer Ron Williams confirmed.
The payment involved erroneous assessments for two commercial parcels on the corner of East Washington and County streets, according to records obtained under Virginia’s open-records law, as well as the city’s explanation.
The Assessor’s Office learned a building had been assessed on two different parcels after being approached by the property owner, city spokeswoman Debbie George stated.
“The appraiser went out and inspected, thus confirming the situation,” she wrote in an email.
Exoneration forms, which record adjustments and rebates, show a refund was subsequently approved for fiscal years 2002-2003 through 2010-11 — a total of nine years.
“It is my understanding that this was a case of double taxation that could have gone to court,” George wrote. “The city chose instead to settle the matter.”
Asked to justify the decision to sidestep a court application, she cited a state code section dealing with refunds beyond the three years and the current year and stated that the code allows cities to autonomously grant the refunds.
That code reads, in part: “When it is shown to the satisfaction of the court that there has been a double taxation … the court may order such erroneous taxes to be corrected.”
“Some cases are limited to three years’ refund; because this was a case of double taxation, it was longer than a three-year time period,” George asserted.
Assessors in other cities maintain only a court can decide to go back more than three years.
“As far as I’m aware, we don’t have the authority to do that (beyond three years),” said William Rice, Chesapeake’s assessor.
An error involving another parcel and taxpayer account number involved a building destroyed by 2003’s Hurricane Isabel, George stated.
“That was brought to our attention when they addressed the issue of the building (duplicated) on two parcels,” she stated. “Appraisers then went out and inspected the property to verify that the building was not located on the site. Additional verification was completed through pictometry” (aerial imagery).
That part of the refund, representing a small portion of total, was for 2008-2009 through 2010-2011.
Attorney and businessman Mat Pope, a partner in Nuts for Wildlife, a bird and wildlife feed processor located at the same address, said he handled Nansemond Cold Storage’s 2012 sale of property at 160 County Street to Freezepop LLC, during which the double taxation “was brought to my attention.”
Nansemond Cold Storage then enlisted Pope and his “business solutions” firm, SilverKnight Advisory Group, to present the issue to the city, Pope said. He said he presented the error to assessor Jean Jackson.
“Now, if you’ve been overtaxed, the first thing you do is go to the people that have been taxing you and present the case,” Pope said.
“Everything was very professional. It’s a complex issue with a lot of research. This is entirely different than someone coming in and saying, ‘I think you have overtaxed my house this year.’”
When the city’s actions were described to the Virginia Department of Taxation, spokeswoman Virginia Slaughter responded, “The Department is not able to comment on the legality of the city’s actions.”
Officials with Nansemond Cold Storage, which is owned by Charles Pond, declined to comment, including on how it could have been overtaxed for almost a decade and its knowledge of the error’s origination.