City changes tax refund policy

Published 10:10 pm Thursday, July 18, 2013

Suffolk officials have changed a policy under which the city assessor’s office refunded nearly 10 years worth of erroneous tax payments to Nansemond Cold Storage.

The assessor’s office approved a payment of $329,866.39, including interest, this year after learning in March 2012 that taxes had been levied for one building as if it had existed on two parcels.

State law allows property tax refunds to be approved by the assessor’s office for only three years worth of taxes. The code requires that refunds for periods longer than that be subject to approval by a court.


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City Assessor Jean Jackson told members of the City Council about the error and her handling of the refund in a letter dated July 12. In that letter, she stated that her office’s policies regarding tax refunds had been “reviewed and changed so that no such payments will be made without a review as to its legality by the City Attorney’s Office, pursuant to the Code of Virginia.”

During Wednesday’s City Council meeting, City Attorney Helivi Holland read a brief statement in support of the assessor’s office’s handling of the matter.

“This was not a case of dispute about the taxes owed but a case where the city assessor completed extensive research to determine the amount that was overpaid by Nansemond Cold Storage, and the parties agreed to sum that was overpaid,” she said in a statement that drew no public response from City Council members.

“The Code of Virginia gave Nansemond Cold Storage the right to sue the city for the amount, and the city has authority to avoid litigation by settling matters before court.”

Suffolk officials have not directly addressed the apparent conflict between the state code’s prescription for handling such matters in open court and the assessor’s handling of the Nansemond Cold Storage case through a direct agreement between the two parties.

However, members of City Council met behind closed doors following a work session Wednesday afternoon, citing legal matters involving Nansemond Cold Storage.

In an emailed statement last week, Suffolk Chief of Staff Debbie George wrote, “It is my understanding that this was a case of double taxation that could have gone to court. The city chose instead to settle the matter.”

In her letter to council on Friday, Jackson wrote “… the process of refunding payments for erroneous taxes has been changed so that no such payments will be made without review as to legality by the City Attorney’s Office, pursuant to the Code of Virginia.”

In the same letter, Jackson wrote that a supplemental tax had been assessed on the property in question, because it had received rehabilitation tax credits for which the city discovered the company did not qualify.

Those credits had been granted for 10 years. Jackson’s letter stated that the supplemental assessment had been levied for the 2010 and 2011 tax years, for a total of $25,529.32, “in order to recoup the taxes that should have been collected by the City.”

Jackson’s letter did not address the apparent underpayment of taxes for the other eight years during which the rehabilitation credit was erroneously granted.