What’s the big deal, anyway?
Published 8:25 pm Saturday, July 27, 2013
So, what’s the big deal with refunding a city taxpayer 10 years’ worth of overpaid taxes?
That’s the question in some minds following recent coverage of a decision by Suffolk Assessor Jean Jackson to pay nearly $330,000 to refund back taxes and interest to Nansemond Cold Storage, which had been taxed for one building that was erroneously listed on two parcels. The error was uncovered during the sale of that building to another company.
Clearly, the city has an obligation to make things right with taxpayers when city employees make mistakes that cost the taxpayers money. And Jackson was obviously trying to do the right thing by rectifying a mistake that was made long before she took her job in Suffolk.
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But state law allows cities to refund back taxes for only three years — anything beyond that is supposed to be approved by a judge in Circuit Court.
At first blush, especially when there’s no dispute about the error — as in the Suffolk case — the state law might seem a bit onerous. After all, a municipality should not be in the business of taking what’s not rightfully owed to it. But there’s more to the statute than meets the eye.
Consider, for example, the fictitious case of a taxpayer who realized he’d been paying erroneous taxes on his property for 20 years, or even 50. He might be justified in wanting his money refunded, but citizens of the municipality would have a vested interest in knowing the circumstances of such a large payment. As in the case of Nansemond Cold Storage, nobody would have any way to know about such a payment if the assessor’s office were allowed to approve it without oversight.
By allowing refunds by the assessor for up to three years of back taxes, the state code gives assessors the ability to make taxpayers whole for what would generally be smaller sums.
For the larger sums that would likely result from longer periods, bringing the issue before a court would assure that such decisions are made in the light of day, where all citizens can see how their local government works and what happens to their tax dollars. Giving the court responsibility for the final decision also removes any question of impropriety that might arise from deals done in private, however good the intentions might be.
Suffolk officials have set a new policy in place under which “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,” according to a recent letter from Jackson to the City Council.
Taking advantage of legal counsel when it comes to approving tax refunds is a smart move by the city. Remembering the intent of state law — and the right of citizens to know how and why their tax dollars are being spent — should be an important part of the process.