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Introduced Version Senate Bill 455 History

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SB455 INTR


Senate Bill No. 455

(By Senator Kessler, Caldwell, Jackson, Rowe, Boley, Facemyer, Craigo, Bowman, Edgell, McKenzie, Minear, Minard, Hunter, Oliverio, Anderson, Deem, Ross, Unger, Helmick, Fanning, McCabe, Prezioso, Plymale, Snyder, Mitchell, Sprouse and Redd)

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[Introduced January 31, 2002; referred to the Committee

on the Judiciary; and then to the Committee on Finance.]

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A BILL to amend and reenact sections four, eight, nine, nine-a, ten, fourteen and seventeen, article ten, chapter eleven of the code of West Virginia, one thousand nine hundred thirty-one, as amended; to further amend said article by adding thereto two new sections, designated sections twenty-three and twenty-four; and to further amend said chapter by adding thereto a new article, designated article ten-a, all relating to tax administration and hearing procedures; requiring filing of petitions with tax tribunal after set date; transferring certain pending petitions to tax tribunal by a date certain; requiring tax commissioner to issue certain decisions by a given date; increasing the amount of interest due on underpayments of taxes and paid on overpayments of taxes; requiring tax commissioner to establish taxpayer resolution program and propose rules to adopt and implement alternative dispute resolution; stating legislative finding and purpose; defining certain terms; creating tax tribunal; requiring principal office at state capital; authorizing the holding of hearings statewide; requiring county commissions to provide facilities for hearings; requiring time and place of hearings to be convenient; requiring a seal; providing for appointment, term, vacancy, qualification, compensation and removal of chief administrative law judge and prohibiting conflicts of interest; setting forth powers and duties of chief administrative law judge; requiring all employees, except chief administrative law judge, be members of classified service; setting forth qualifications of administrative law judges; stating jurisdiction of tax tribunal; requiring filing of petition to initiate proceedings; setting forth hearing procedures; authorizing small claims hearings; specifying powers to decide matters; authorizing the issuance of subpoenas; setting forth procedures and costs; requiring certain hearings be recorded; providing for transcript and costs; providing for appearances before the tax tribunal; requiring all decisions to be in writing and certain decisions be published; requiring service of notice of decisions; establishing finality of decisions; providing for judicial review; requiring rules of practice and procedure; providing for timely filing; setting forth time for performance of act when last day falls on weekend or legal holiday; and confidentiality.

Be it enacted by the Legislature of West Virginia:
That sections four, eight, nine, nine-a, ten, fourteen and seventeen, article ten, chapter eleven of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be further amended and reenacted; that said article be amended by adding thereto two new sections, designated sections twenty-three and twenty-four; and that said chapter be further amended by adding thereto a new article, designated article ten-a, all to read as follows:
ARTICLE 10. PROCEDURE AND ADMINISTRATION.
§11-10-4. Definitions.
For the purpose of this article, the term:
(a) "Officer or employee of this state" shall include, but shall not be limited to, any former officer or employee of the state of West Virginia.
(b) "Person" shall include, but is not limited to, any individual, firm, partnership, limited partnership, copartnership, joint adventure venture, association, corporation, municipal corporation, organization, receiver, estate, trust, guardian, executor, administrator, and also any officer, employee or member of any of the foregoing who, as such an officer, employee or member, is under a duty to perform or is responsible for the performance of an act prescribed by the provisions of this article and the provisions of any of the other articles of this chapter which impose taxes administered by the tax commissioner, unless the intention to give a more limited or broader meaning is disclosed by the context of this article or any of the other articles of this chapter which impose taxes administered by the tax commissioner.
(c) "State" means any state of the United States or the District of Columbia.
(d) "Tax" or "taxes" includes within the meaning thereof taxes specified in section three of this article, additions to tax, penalties and interest, unless the intention to give the same a more limited meaning is disclosed by the context.
(e) "Tax commissioner" or "commissioner" means the tax commissioner of the state of West Virginia or his or her delegate.
(f) "Taxpayer" means any person required to file a return for any tax administered under this article, or any person liable for the payment of any tax administered under this article.
(g) "Tax administered under this article" means any tax to which this article applies as set forth in section three of this article.
(h) "Tax tribunal" or "tribunal" means the West Virginia tax tribunal created by section three, article ten-a of this chapter.
(h) (i) "This code" means the code of West Virginia, one thousand nine hundred thirty-one, as amended.
(i) (j) "This state" means the state of West Virginia.
§11-10-8. Notice of assessment; petition for reassessment or payment of assessment within sixty days; finality of assessment; payment of final assessment; effective date.

(a) Notice of assessment. -- The tax commissioner shall give the taxpayer written notice of any assessment or amended or supplemental assessment made pursuant to this article. The assessment or amended or supplemental assessment, as the case may be, shall become final and conclusive of the liability of the taxpayer and not subject to either administrative or judicial review under the provisions of sections nine or nine-a, and ten of this article, or under the provisions of sections ten or eleven, and seventeen of article ten-a of this chapter, unless the taxpayer to whom a notice of assessment or amended or supplemental assessment, is given, shall within sixty days after service thereof (except in the case of jeopardy assessments, as to which the time for filing a petition is specified in section seven of this article) either:
(1) Petition for reassessment. -- Personally or by certified mail, files with the tax commissioner a petition in writing, verified under oath by the taxpayer or his or her duly authorized agent, having knowledge of the facts, setting forth with particularity the items of the assessment objected to, together with the reasons for such the objections: Provided, That for all assessments received after the thirty-first day of December, two thousand two, the taxpayer shall file the petition with the tax tribunal in accordance with the provisions of section nine, article ten-a of this chapter; or
(2) Payment of assessment. -- Personally or by certified mail, remits to the tax commissioner the total amount of the assessment or amended or supplemental assessment, including such the additions to tax and penalties as may have been assessed and the amount of interest due.
(b) Finality of assessment. -- The amount of an assessment or amended or supplemental assessment shall be due and payable on the day following the date upon which the assessment or amended or supplemental assessment becomes final. Payment of the amount of the assessment, or amended or supplemental assessment, as provided in subdivision (2) above, subsection (a) of this section, within sixty days after service of notice of such the assessment shall does not prohibit or otherwise bar the taxpayer from filing a claim for refund or credit under the provisions of section fourteen of this article within the time prescribed therein for the filing of a claim for refund or credit.
(c) Payment of assessment after petition filed. -- A taxpayer who has timely filed a petition for reassessment may, at any time prior to issuance of the tax commissioner's administrative decision under section nine or nine-a of this article, or under sections ten or eleven, article ten-a of this chapter, pay under protest the amount of the assessment. Upon such payment, the contested case shall thereafter be treated for all purposes as a petition for refund: Provided, That if payment is made after the administrative hearing under section nine or nine-a of this article or under section ten or eleven, article ten-a of this chapter, has commenced or concluded, a new hearing shall may not be held, but the record thereof shall be properly amended by the tax commissioner to show that the amount assessed has been paid under protest by the taxpayer and that the petition for reassessment previously filed under this section or under section nine, article ten-a of this chapter is now to be treated as a petition for refund filed under section fourteen of this article.
(d) Effective date.
This section, as amended, shall apply to all assessments (including amended and supplemental assessments) which are issued on or after the first day of July, one thousand nine hundred eighty-six, and to all assessments issued prior to such effective date which have not become final as provided in this section.
§11-10-9. Hearing procedure.
(a) When a petition for reassessment provided for in section eight of this article, or a petition for refund or credit provided for in section fourteen of this article, is filed within the time prescribed by said sections for such filing, or a hearing is requested pursuant to the provisions of any other article of this chapter which is administered under this article, the tax commissioner shall assign a time and place for a hearing upon the same and shall notify the petitioner of such the hearing by written notice at least twenty days in advance thereof. Such The hearing shall be held within ninety days from the date of filing the petition or other written request for hearing unless continued by agreement of the parties or by the tax commissioner for good cause.
The hearing shall be informal and shall be conducted in an impartial manner by the tax commissioner or a hearing examiner designated by him or her. If the hearing is on a petition for reassessment the burden of proof shall be upon the taxpayer to show the assessment is incorrect and contrary to law, either in whole or in part. If the hearing is on a petition for refund or credit, the petitioner shall also have the burden of proof.
After any hearing as above provided for, the tax commissioner shall, within a reasonable time, give notice in writing of his or her decision. Unless an appeal from the decision of the tax commissioner rendered in any such hearing is taken, pursuant to the provisions of section ten of this article, within sixty days after service of such the notice, the tax commissioner's decision shall become final and conclusive and not subject to either administrative or judicial review. The amount, if any, due the state under such the decision shall be due and payable on the day following the date upon which such the decision becomes final. The amount, if any, due the taxpayer under such the decision shall be promptly refunded, or the same may be credited pursuant to section fourteen of this article.
(b) All petitions which are on the tax commissioner's docket on the thirty-first day of December, two thousand two, for which no administrative hearing has been held, shall be transferred by the tax commissioner to the tax tribunal no later than the thirty-first day of January, two thousand three; and thereafter, the petition shall, for all purposes except timeliness of filing, be treated as if it had been filed with the tax tribunal.
(c) All petitions which are on the tax commissioner's docket on the thirty-first day of December, two thousand two, for which an administrative hearing has been held prior to that date, shall remain on the tax commissioner's docket and the tax commissioner shall issue an administrative decision no later than the thirty-first day of March, two thousand three.

§11-10-9a. Small claims procedure; disputes involving $10,000 or less.

(a) In general. -- Notwithstanding the provisions of section nine of this article, if the amount in dispute in any petition for reassessment filed under section eight or in any petition for refund or credit filed under section fourteen does not exceed ten thousand dollars for any one taxable year, then, at the option of the taxpayer and concurred in by the tax commissioner before the hearing of the case, proceedings in the case shall be conducted under this section. Such The proceedings shall be conducted in an informal manner and in accordance with such the rules of evidence and rules of procedure as the tax commissioner may prescribe. A decision, together with a brief summary of the reasons therefor shall be issued by the tax commissioner.
(1) All petitions which are on the tax commissioner's docket on the thirty-first day of December, two thousand two, for which no administrative hearing has been held, shall be transferred by the tax commissioner to the tax tribunal no later than the thirty-first day of January, two thousand three; and thereafter, the petition shall, for all purposes except timeliness of filing, be treated as if it had been filed with the tax tribunal.
(2) All petitions which are on the tax commissioner's docket on the thirty-first day of December, two thousand two, for which an administrative hearing has been held prior to that date, shall remain on the tax commissioner's docket and the tax commissioner shall issue an administrative decision no later than the thirty-first day of March, two thousand three.

(b) Finality of decision. -- A decision entered in any case in which proceedings are conducted under this section shall not be subject to review, administrative or judicial, and shall not be treated as precedent for any other case.
(c) Discontinuance of proceedings. -- At any time before commencement of the hearing held under this section, the taxpayer may unilaterally withdraw its election made under subsection (a); and at any time before a decision is issued under this section, the taxpayer may request or the tax commissioner, on his or her own motion, may order that further proceedings under this section in such case be discontinued because there are reasonable grounds for believing that the amount in dispute exceeds the amount described in subsection (a) of this section. Upon any such discontinuance, or change of election, a hearing shall be held in the same manner as other cases to which section nine of this article applies.
(d) Amount of deficiency in dispute. -- For purposes of this section, the amount in dispute includes tax, additions to tax, additional amounts and penalties. It excludes interest.
§11-10-10. Appeals.
(a) Right of appeal. --
(1) A taxpayer may appeal the administrative decision of the tax commissioner issued under section nine or fourteen of this article, by taking an appeal to the circuit courts of this state within sixty days after being served with notice of the administrative decision.
(2) A taxpayer may appeal the administrative decision of the tax tribunal in accordance with the provisions of section eighteen, article ten-a of this chapter.
(b) Venue. -- The appeal may be taken in the circuit court of any county:
(1) Wherein the activity taxed was engaged in; or
(2) Wherein the taxpayer resides; or
(3) Wherein the will of the decedent was probated or letters of administration granted; or
(4) To the circuit court of Kanawha County.
(c) Petition for appeal. -- The appeal proceeding shall be instituted by filing a petition with the circuit court, or the judge thereof in vacation, within the sixty-day period prescribed in subsection (a) of this section. The clerk of the circuit court shall, within ten days after date the petition is filed, serve the tax commissioner with a copy of the same by registered or certified mail. This petition shall be in writing, verified under oath by the taxpayer, or his or her duly authorized agent, having knowledge of the facts, set forth with particularity the items of the administrative decision or the assessment objected to, together with the reasons for such the objections.
(d) Appeal bond. -- If the appeal is of any assessment for additional taxes (except a jeopardy assessment for which security in the amount thereof was previously filed with the tax commissioner,) then within ninety days after the petition for appeal is filed, or sooner if ordered by the circuit court, the taxpayer shall file with the clerk of the circuit court a cash bond or a corporate surety bond approved by the clerk. The surety must be qualified to do business in this state. These bonds shall be conditioned that the taxpayer shall perform the orders of the court. The penalty of this bond shall be not less than the total amount of tax, additions to tax, penalties and interest for which the taxpayer was found liable in the administrative decision of the tax commissioner. Notwithstanding the foregoing and in lieu of such the bond, the tax commissioner, in his or her discretion upon such the terms as he or she may prescribe, may upon a sufficient showing by the taxpayer, certify to the clerk of the circuit court that the assets of the taxpayer subject to the lien imposed by section twelve of this article, or other indemnification, are adequate to secure performance of the orders of the court.
(e) Hearing of appeal. -- The court shall hear the appeal and determine anew all questions submitted to it on appeal from the determination of the tax commissioner. In such the appeal a certified copy of the tax commissioner's notice of assessment or amended or supplemental assessment and administrative decision thereon shall be admissible and shall constitute prima facie evidence of the tax due under the provisions of those articles of this chapter to which this article is applicable. The court shall render its decree thereon and a certified copy of said the decree shall be filed by the clerk of the court with the tax commissioner who shall then correct the assessment in accordance with the decree. An appeal may be taken by the taxpayer or the tax commissioner to the supreme court of appeals of this state.
§11-10-14. Overpayments; credits; refunds and limitations.
(a) Refunds of credits of overpayments. -- In the case of overpayment of any tax (or fee), additions to tax, penalties or interest imposed by this article, or any of the other articles of this chapter, or of this code, to which this article is applicable, the tax commissioner shall, subject to the provisions of this article, refund to the taxpayer the amount of the overpayment or, if the taxpayer so elects, apply the same as a credit against the taxpayer's liability for the tax for other periods. The refund or credit shall include any interest due the taxpayer under the provisions of section seventeen of this article.
(b) Refunds or credits of gasoline and special fuel excise
tax or motor carrier road tax.
-- Any person who seeks a refund or credit of gasoline and special fuel excise taxes under the provisions of section ten, eleven or twelve, article fourteen of this chapter, or section nine or eleven, article fourteen-a of this chapter, shall file his or her claim for refund or credit in accordance with the provisions of such the applicable sections. The ninety-day time period for determination of claims for refund or credit provided in subsection (d) of this section shall does not apply to these claims for refund or credit.
(c) Claims for refund or credit. -- No refund or credit shall be made unless the taxpayer has timely filed a claim for refund or credit with the tax commissioner. A person against whom an assessment or administrative decision has become final shall is not be entitled to file a claim for refund or credit with the tax commissioner as prescribed herein. The tax commissioner shall determine the taxpayer's claim and notify the taxpayer in writing of his or her determination.
(d) Petition for refund or credit; hearing. --
(1) If the taxpayer is not satisfied with the tax commissioner's determination of taxpayer's claim for refund or credit, or if the tax commissioner has not determined the taxpayer's claim within ninety days after the claim was filed, or six months in the case of claims for refund or credit of the taxes imposed by articles twenty-one, twenty-three and twenty-four of this chapter, after the filing thereof, the taxpayer may file, with the tax commissioner, either personally or by certified mail, a petition for refund or credit: Provided, That no petition for refund or credit may be filed more than sixty days after the taxpayer is served with notice of denial of taxpayer's claim: Provided, however, That after the thirty-first day of December, two thousand two, the taxpayer shall file the petition with the tax tribunal in accordance with the provisions of section nine, article ten-a of this chapter.
(2) The petition for refund or credit shall be in writing, verified under oath by the said taxpayer, or by taxpayer's duly authorized agent having knowledge of the facts, and shall set forth with particularity the items of the determination objected to, together with the reasons for the objections.
(3) When a petition for refund or credit is properly filed, the procedures for hearing and for decision applicable when a petition for reassessment is timely filed shall be followed.
(e) Appeal. -- An appeal from the tax commissioner's administrative decision upon the petition for refund or credit may be taken by the taxpayer in the same manner and under the same procedure as that provided for judicial review of an administrative decision on a petition for reassessment, but no bond shall be required of the taxpayer. An appeal from the administrative decision of the tax tribunal, if taken by the taxpayer, shall be taken as provided in section eighteen, article ten-a of this chapter.
(f) Decision of the court. -- Where the appeal is to review an administrative decision on a petition for refund or credit, the court may determine the legal rights of the parties but in no event shall it enter a judgment for money.
(g) Refund made or credit established. -- The tax commissioner shall promptly issue his or her requisition on the treasury or establish a credit, as requested by the taxpayer, for any amount finally administratively or judicially determined to be an overpayment of any tax (or fee) administered under this article. The auditor shall issue his or her warrant on the treasurer for any refund requisitioned under this subsection payable to the taxpayer entitled to the refund, and the treasurer shall pay the warrant out of the fund into which the amount so refunded was originally paid: Provided, That refunds of personal income tax may also be paid out of the fund established pursuant to section ninety-three, article twenty-one of this chapter.
(h) Forms for claim for refund or a credit; where return shall constitute claim. -- The tax commissioner may prescribe by rule or regulation the forms for claims for refund or credit. Notwithstanding the foregoing, where the taxpayer has overpaid the tax imposed by article twenty-one, twenty-three or twenty-four of this chapter, a return signed by the taxpayer which shows on its face that an overpayment of such tax has been made shall constitute a claim for refund or credit.
(i) Remedy exclusive. -- The procedure provided by this section shall constitute the sole method of obtaining any refund, or credit, or any tax (or fee) administered under this article, it being the intent of the Legislature that the procedure set forth in this article shall be in lieu of any other remedy, including the uniform declaratory judgments act embodied in article thirteen, chapter fifty-five of this code, and the provisions of section two-a, article one of this chapter.
(j) Applicability of this section. -- The provisions of this section shall apply to refunds or credits of any tax (or fee), additions to tax, penalties or interest imposed by this article, or any article of this chapter, or of this code, to which this article is applicable.
(k) Erroneous refund or credit. -- If the tax commissioner believes that an erroneous refund has been made or an erroneous credit has been established, he or she may proceed to investigate and make an assessment or institute civil action to recover the amount of such the refund or credit, within two years from the date the erroneous refund was paid or the erroneous credit was established, except that the assessment may be issued or civil action brought within five years from such the date if it appears that any portion of the refund or credit was induced by fraud or misrepresentation of a material fact.
(l) Limitation on claims for refund or credit. --
(1) General rule. -- Whenever a taxpayer claims to be entitled to a refund or credit of any tax (or fee), additions to tax, penalties or interest imposed by this article, or any article of this chapter, or of this code, administered under this article, paid into the treasury of this state, such the taxpayer shall, except as provided in subsection (d) of this section, file a claim for refund, or credit, within three years after the due date of the return in respect of which the tax (or fee) was imposed, determined by including any authorized extension of time for filing the return, or within two years from the date the tax, (or fee), was paid, whichever of such the periods expires the later, or if no return was filed by the taxpayer, within two years from the time the tax (or fee) was paid, and not thereafter.
(2) Extensions of time for filing claim by agreement. -- The tax commissioner and the taxpayer may enter into a written agreement to extend the period within which the taxpayer may file a claim for refund or credit, which period shall not exceed two years. The period so agreed upon may be extended for additional periods not in excess of two years each by subsequent agreements in writing made before expiration of the period previously agreed upon.
(3) Special rule where agreement to extend time for making an assessment. -- Notwithstanding the provisions of subdivisions (1) and (2) of this subsection, if an agreement is made under the provisions of section fifteen of this article extending the time period in which an assessment of tax can be made, then the period for filing a claim for refund or credit for overpayment of the same tax made during the periods subject to assessment under the extension agreement shall also be extended for the period of the extension agreement plus ninety days.
(4) Overpayment of federal tax. -- Notwithstanding the provisions of subdivisions (1) and (2) of this subsection, in the event of a final determination by the United States Internal Revenue Service or other competent authority of an overpayment in the taxpayer's federal income or estate tax liability, the period of limitation upon claiming a refund reflecting the final determination in taxes imposed by articles eleven, twenty-one and twenty-four of this chapter shall may not expire until six months after the determination is made by the United States Internal Revenue Service or other competent authority.
(5) Tax paid to the wrong state. -- Notwithstanding the provisions of subdivisions (1) and (2) of this subsection, when an individual, or the fiduciary of an estate, has in good faith erroneously paid personal income tax, estate tax or sales tax, to this state on income or a transaction which was lawfully taxable by another state and, therefore, not taxable by this state, and no dispute exists as to the jurisdiction to which the tax should have been paid, then the time period for filing a claim for refund, or credit, for the tax erroneously paid to this state shall does not expire until ninety days after the tax is lawfully paid to the other state.
(6) Exception for gasoline and special fuel excise tax and motor carrier road tax. -- This subsection shall does not apply to refunds of gasoline and special fuel excise tax or motor carrier road tax sought under the provisions of article fourteen or fourteen-a of this chapter.
(m) Effective date. -- This section, as amended in the year one thousand nine hundred ninety-six, shall apply to claims for refund or credit filed on or after the first day of July, one thousand nine hundred ninety-six.
§11-10-17. Interest.
(a) Underpayments. -- If any amount of a tax administered under this article is not paid on or before the last date prescribed for payment, interest on such the amount at the rate of eight percent per annum shall be paid for the period from such the last date to the date paid: Provided, That on and after the first day of July, one thousand nine hundred eighty-six, interest on under payments shall be paid at the annual rate established under section seventeen-a of this article, from the period beginning on the said first day of July, or from the last day prescribed for payment, whichever is the later, to the date paid, regardless of when liability for the tax arose: Provided, however, That on and after the first day of July, two thousand two, interest on underpayments shall be paid at an annual rate of one percent above the annual rate established under section seventeen-a of this article, from the period beginning on the first day of July, or from the last day prescribed for payment, whichever is the later, to the date paid, regardless of when liability for the tax arose. For purposes of this subsection, the last date prescribed for payment shall be the due date of the return and shall be determined without regard to any extension of time for payment.
(b) Last date for payment not otherwise prescribed. -- In the case of taxes payable by stamp or other indicia of tax payment and in all other cases in which the last day for payment is not otherwise prescribed, the last date for payment shall be deemed considered to be the date the liability for tax arises and in no event shall be later than the date notice and demand for payment of the tax is made by the tax commissioner.
(c) Erroneous refund or credit. -- If any refund is made or credit is established upon an erroneous claim for refund or credit, interest on such the amount refunded or credited at the annual rate established under section seventeen-a of this article, shall be paid by the claimant from the date the refund was made or the credit was taken to the date such the amount is recovered.
(d) Overpayments. -- Interest shall be allowed and paid at the annual rate of eight percent per annum upon any amount which has been finally administratively or judicially determined to be an overpayment in respect of each tax administered under this article except the taxes imposed by articles twelve, fourteen and fourteen-a of this chapter: Provided, That on and after the first day of July, one thousand nine hundred eighty-six, interest on overpayments shall be paid at the annual rate established under section seventeen-a of this article, from said the first day of July, or the date the claim for refund or credit is filed, whichever is the later, regardless of when the tax was paid: Provided, however, That on and after the first day of July, two thousand two, interest on overpayments in respect of each tax administered under this article except the taxes imposed by articles twelve, fourteen and fourteen-a of this chapter, shall be paid at an annual rate of one percent above the annual rate established under section seventeen-a of this article, from the period beginning on the first day of July, or from the date the claim for refund or credit is filed, whichever is the later, regardless of when the tax was paid. Such The interest shall be allowed and paid for the period commencing with the date of the filing by the taxpayer of a claim for refund or credit with the tax commissioner and ending with the date of a final administrative or judicial determination of overpayment. The tax commissioner shall, within thirty days after such the determination of entitlement to refund, issue his or her requisition or establish a credit as requested by the taxpayer. Whenever the tax commissioner fails or refuses to issue any such requisition or establish such the credit within said thirty-day period, the interest provided herein shall commence to accrue until performance by the tax commissioner. The acceptance of such the refund check or credit shall be without prejudice to any right of the taxpayer to claim any additional overpayment and interest thereon.
(e) Applicable rules. -- For purposes of this section:
(1) No interest payable on tax refunded or credited within ninety days after claim for refund or credit is filed. -- In the event of the overpayment of any tax administered under this article, except the tax imposed by articles twenty-one and twenty-four of this chapter, where the tax commissioner issues his or her requisition or establishes a credit as requested by the taxpayer within ninety days after the date of the filing by the taxpayer of a claim for refund or credit, no interest shall be allowed under this section.
(2) No interest payable where personal income tax and corporation net income tax refunded or credited within six months after claim for refund or credit is filed. -- In the event of the overpayment of the tax imposed by articles twenty-one and twenty-four of this chapter, where the tax commissioner issues his or her requisition or establishes a credit as requested by the taxpayer within six months after the date of the filing by the taxpayer of a claim for refund or credit, no interest shall be allowed under this section.
(3) Interest treated as tax. -- Interest prescribed under this section on any tax shall be collected and paid in the same manner as taxes.
(4) No interest on interest. -- No interest under this section shall be imposed on the interest provided by this section prior to the first day of July, one thousand nine hundred eighty-six.
(5) Interest on penalties or additions to tax. -- Interest shall be imposed under subsection (a) of this section on any assessable penalty or additions to tax only if such the penalty or additions to tax is not paid within fifteen days from the date of notice and demand therefor, and in such that case, interest shall be imposed only for the period from the date of the notice and demand to the date of payment.
(6) Payments made within fifteen days after notice and demand. -- If notice and demand is made for payment of any amount, and if such the amount is paid within fifteen days after the date of such the notice and demand, interest under this section on the amount so paid shall may not be imposed for the period after the date of such the notice and demand.
(7) Limitation on collection. -- Interest prescribed under this section on any tax may be collected at any time during the period within which the tax to which such the interest relates may be collected.
(8) Exception as to estimated tax. -- This section shall does not apply to any failure to pay any estimated tax required to be paid under articles thirteen, thirteen-c, thirteen-b, twenty-one, twenty-three or twenty-four of this chapter.
§11-10-23. Taxpayer problem resolution program; taxpayer assistance orders.

(a) A taxpayer problem resolution program shall be available to taxpayers to facilitate the prompt review and resolution of taxpayer complaints and problems which have not been addressed or remedied through normal administrative proceedings or operational procedures and to assure that taxpayer rights are safeguarded and protected during tax determination and collection processes.
(b) The commissioner shall designate a taxpayers' rights advocate and adequate staff to administer the taxpayer problem resolution program.
(c) The taxpayers' rights advocate may, with or without a formal written request from the taxpayer, issue a taxpayer assistance order that suspends or stays actions or proposed actions by the division for up to ninety days when a taxpayer suffers or is about to suffer a significant hardship as a result of a tax determination, collection, or enforcement process: Provided, That the amount in controversy may not exceed ten thousand dollars including tax, additions to tax and penalty, but excluding interest.
(1) Relief or remedy may be granted by a taxpayer assistance order only as an extraordinary measure. The process shall not be used to contest the merits of a tax liability or to substitute for informal protest procedures or normal administrative or judicial proceedings for the review of a tax assessment or collection action or denial of refund.
(2) The running of the period of limitations on assessment set forth in section fifteen of this article shall be tolled from the date of a taxpayer's request for a taxpayer assistance order until either the date the request is denied or the date specified in the taxpayer assistance order, whichever is applicable.
§ 11-10-24. Alternative dispute resolution of tax disputes.
On or before the thirty-first day of December, two thousand two, the tax commissioner shall propose rules for legislative approval in accordance with the provisions of article three, chapter twenty-nine-a of this code which adopt and implement alternative dispute resolution mechanisms which offer taxpayers voluntary and cost-effective methods of resolving tax disputes in order to encourage voluntary settlements and minimize the number of disputes that require litigation to resolve the controversy.
ARTICLE 10A. WEST VIRGINIA BOARD OF TAX AND REVENUE APPEALS.
§11-10A-1. Legislative finding; purpose.
The Legislature finds that there is a need for an independent quasi-judicial agency separate and apart from the tax division to resolve disputes between the tax commissioner and taxpayers in order to maintain public confidence in the state tax system. The Legislature does therefore declare that the purpose of this article is to create the West Virginia tax tribunal to resolve disputes between the tax commissioner and taxpayers and to prescribe the powers and duties of the tax tribunal.
§11-10A-2. Definitions.
(a) "Division" means the tax division of the West Virginia department of tax and revenue.
(b) "Tax commissioner" or "commissioner" means the tax commissioner of the state of West Virginia or his or her authorized designee.
(c) "Tax tribunal" or "tribunal" means the West Virginia tax tribunal created by this article.
§11-10A-3. Tax tribunal created.
There is hereby created the West Virginia tax tribunal, a quasi-judicial agency which, for administrative purposes only, is in the department of tax and revenue.
§11-10A-4. Principal office; place for hearings; county commission to provide facilities; convenience.

The principal office of the tribunal shall be at the state capital, but the tribunal may hold hearings at any place within this state. Any county commission, upon request by the tribunal, shall provide it with suitable rooms and facilities for hearings it holds in that county at times convenient to the county commission and the tax tribunal. The time and place of hearings shall be fixed by the tribunal, with a view to providing reasonable opportunity to the parties to appear before the tribunal with as little inconvenience and expense to the parties as practicable.
§11-10A-5. Seal; authenticating records; judicial notice.
The tax tribunal shall have a seal. The seal shall have the following words engraved thereon: "West Virginia Tax Tribunal." The tax tribunal shall authenticate all of its orders, records and proceedings with the seal; and the courts of this state shall take judicial notice of the seal.
§11-10A-6. Chief administrative law judge; appointment, term and vacancy; qualifications; compensation; conflicts of interest prohibited; removal.

(a) The governor, with the advice and consent of the Senate, shall appoint the chief administrative law judge from a list of three qualified nominees submitted to the governor by the board of governors of the West Virginia state bar for a six-year term. An appointment to fill a vacancy in the position shall be for the unexpired term.
(b) Prior to appointment, the chief administrative law judge shall be a citizen of the United States and a resident of this state who is admitted to the practice of law in this state and who has five years of full-time or equivalent part-time experience as an attorney with federal or state tax law expertise or as a judge of a court of record.
(c) The annual salary of the chief administrative law judge shall be sixty-five thousand dollars per year.
(d) The chief administrative law judge, during his or her term shall:
(1) Devote his or her full time to the duties of the position;
(2) Not otherwise engage in the active practice of law or be associated with any group or entity which is itself engaged in the active practice of law: Provided, That nothing in this paragraph may be construed to prohibit the chief administrative law judge from being a member of a national, state or local bar association or committee, or of any other similar type group or organization, or to prohibit the chief administrative law judge from engaging in the practice of law by representing himself, herself or his or her immediate family in their personal affairs in matters not subject to this article.
(3) Not engage directly or indirectly in any activity, occupation or business interfering or inconsistent with his or her duties as chief administrative law judge;
(4) Not hold any other appointed public office or any elected public office or any other position of public trust; and
(5) Not be a candidate for any elected public office, or serve on or under any committee of any political party.
(e) The governor may remove the chief administrative law judge only for incompetence, neglect of duty, official misconduct or violation of subsection (d) of this section, and removal shall be in the same manner as that specified for removal of elected state officials in section six, article six, chapter six of this code.
§11-10A-7. Powers and duties of chief administrative law judge; all employees, except chief administrative law judge members of classified service; qualifications of administrative law judges.

(a) The chief administrative law judge is the chief executive officer of the tax tribunal and he or she may employ administrative law judges and other personnel necessary for the proper administration of this article. The chief administrative law judge may delegate administrative duties to other employees, but the chief administrative law judge shall be responsible for all official delegated acts.
(1) All employees of the tax tribunal, except the chief administrative law judge, shall be in the classified service and shall be governed by the provisions of the statutes, rules and policies of the classified service in accordance with the provisions of article six, chapter twenty-nine of this code.
(2) Prior to employment by the tax tribunal, all administrative law judges shall be admitted to the practice of law in this state and have at least two years of full-time or equivalent part-time experience as an attorney with federal or state tax law expertise.
(3) The chief administrative law judge and all administrative law judges shall be members of the public employees retirement system and do not qualify as participants in the judicial retirement system during their tenure with the tax tribunal.
(b) The chief administrative law judge shall:
(1) Direct and supervise the work of the legal staff;
(2) Make hearing assignments;
(3) Maintain the records of the tax tribunal;
(4) Review decisions of administrative law judges as to legal accuracy, clarity and other requirements;
(5) Publish decisions in accordance with the provisions of section sixteen of this article;
(6) Submit to the Legislature, on or before the fifteenth day of February, an annual report summarizing the tribunal's activities since the end of the last report period, including a statement of the number and type of matters handled by the tribunal during the preceding fiscal year and the number of matters pending at the end of the year; and
(7) Perform the other duties necessary and proper to carry out the purposes of this article.
§11-10A-8. Jurisdiction of tax tribunal.
The tax tribunal has exclusive and original jurisdiction to hear and determine all:
(1) Appeals from tax assessments issued by the tax commissioner pursuant to article ten of this chapter;
(2) Appeals from decisions or orders of the tax commissioner denying refunds or credits for all taxes administered in accordance with the provisions of article ten of this chapter;
(3) Appeals from orders of the tax commissioner denying, suspending, revoking, refusing to renew any license or imposing any civil money penalty for violating the provisions of any licensing law administered by the tax commissioner;
(4) Questions presented when a hearing is requested pursuant to the provisions of any article of this chapter which is administered by the provisions of article ten of this chapter;
(5) Matters which the tax division is required by statute or legislatively approved rules to hear, except employee grievances; and
(6) Other matters which may be conferred on the tax tribunal by statute or legislatively approved rules.
§11-10A-9. Appeal to tax tribunal; petition; answer.
(a) A proceeding before the tax tribunal appealing a tax assessment, a denial of a tax refund or credit or any other order of the tax commissioner, or requesting a hearing pursuant to the provisions of any article of this chapter which is administered pursuant to article ten of this chapter, shall be initiated by a person timely filing a written petition that succinctly states:
(1) The nature of the case;
(2) The facts on which the appeal is based; and
(3) Each question presented for review by the tax tribunal.
(b) A petition filed pursuant to subsection (a) of this section is timely filed if postmarked or hand delivered to the tax tribunal within sixty days of the date a person received written notice of an assessment, denial of a refund or credit, order or other decision of the tax commissioner.
(c) The tax tribunal shall, within ten days of receipt of a timely petition filed pursuant to subsection (a) of this article, provide the tax commissioner with a copy of the petition. The tax commissioner shall submit a written answer to the petition within sixty days of his or her receipt of the petition. The answer shall succinctly state:
(1) The nature of the case;
(2) The facts relied upon by the commissioner;
(3) An answer to each question presented for review.
(d) A proceeding before the tax tribunal in other matters conferred by statute or legislatively approved rules, shall be initiated by filing a petition with the tax tribunal in accordance with the provisions of the applicable statute or rule.
§11-10A-10. Hearing procedures.
(a) The tax tribunal shall assign a date, time and place for a hearing on a petition and shall notify the parties to the hearing by written notice at least twenty days in advance of the hearing date. The hearing shall be held within ninety days of the date of the filing of the petition unless continued by agreement of the parties for good cause.
(b) A hearing before the tax tribunal shall be heard de novo and conducted pursuant to the provisions of the contested case procedure set forth in article five, chapter twenty-nine-a of this code to the extent not inconsistent with the provisions of this article. In case of conflict, the provisions of this article shall govern.
(c) The tax tribunal is not bound by the rules of evidence as applied in civil cases in the circuit courts of this state. The tribunal may admit and give probative effect to evidence of a type commonly relied upon by a reasonably prudent person in the conduct of his or her affairs.
(d) All testimony shall be given under oath.
(e)
The taxpayer or petitioner always has the burden of proof.
(f) The administrative law judge may ask for proposed findings of fact and conclusions of law from the parties prior to the issuance by the tax tribunal of the decision in the matter.
(g) Hearings shall be exempt from the requirements of article nine-a, chapter six, and article one, chapter twenty-nine-b of this code.
§11-10A-11. Small claims hearing.
(a) If the amount in dispute in any petition filed with the tribunal does not exceed ten thousand dollars for any one taxable year, then, at the option of the taxpayer and with the concurrence of the tribunal, the hearing shall be conducted under this section. Notwithstanding the provisions of section fourteen of this article, a hearing under this section shall be conducted in an informal manner and in accordance with the rules of practice and procedure as the tribunal may prescribe.
(b) A decision entered in any hearing conducted under this section is not subject to administrative or judicial review under this article, article ten of this chapter or article five, chapter twenty-nine-a of this code, and may not be treated as precedent for any other contested matter. The amount, if any, owed by the taxpayer to the state shall be paid within thirty days after notice of the decision is served on the taxpayer. The amount, if any, of overpayment by the taxpayer shall be promptly refunded or credited to the taxpayer.
(c) At any time before commencement of the hearing held under this section, the petitioner may withdraw unilaterally the election made under subsection (a) of this section. At any time before a decision is issued under this section, the petitioner may request or the board, on its own motion, may order that further proceedings under this section be discontinued if there are reasonable grounds for believing that the amount in dispute exceeds the amount described in subsection (a) of this section. Upon a discontinuance, or change of election, a hearing shall be held in the same manner as other contested matters to which this article applies.
(d) For purposes of this section, the amount in dispute includes tax, additions to tax and penalties, but excludes interest.
§11-10A-12. Powers of the tax tribunal.
In determining the outcome of a case, the tax tribunal may affirm, reverse, modify or vacate an assessment of tax; may order the payment of or deny a refund, in whole or part; may authorize or deny a credit, in whole or part; may remand a matter to the tax commissioner for further review; or may grant other relief necessary or appropriate to dispose of the matter.
§11-10A-13. Subpoenas; service; cost; fees; relief; disobedience; oath.

(a) The tax tribunal has the power to issue subpoenas and subpoenas duces tecum, requiring the attendance of witnesses and the production of books, papers, records, documents and testimony at the time and place specified. The tax tribunal may exercise the power upon the request of any person who is a party to a hearing before the tribunal.

(b) Every subpoena and subpoena duces tecum must be served at least five days before the return date thereof, by either personal service made by any person over eighteen years of age, or by registered or certified mail, but a return receipt signed by the person to whom subpoena or subpoena duces tecum is directed shall be required to prove service by registered or certified mail. Any party requesting a subpoena or subpoena duces tecum is responsible for service thereof and payment of any fee for service. Any person who serves any subpoena or subpoena duces tecum shall be entitled to the same fee as sheriffs who serve witness subpoenas for the circuit courts of this state.
(c) Fees for the attendance of witnesses subpoenaed shall be the same as for witnesses before the circuit courts of this state. All fees related to any subpoena or subpoena duces tecum issued at the request of a party to an administrative hearing shall be paid by the party who requested the subpoena or subpoena duces tecum be issued. All requests by parties for issuance of subpoena or subpoena duces tecum shall be in writing and shall contain a statement acknowledging that the requesting party agrees to pay the fees.
(d) Upon motion made promptly, and in any event before the time specified in a subpoena or subpoena duces tecum for compliance therewith, the circuit court of the county in which the hearing is to be held or the circuit court of the county in which the person upon whom any subpoena or subpoena duces tecum was served resides, has his, her or its principal place of business or is employed, or the circuit court of the county in which any subpoena or subpoena duces tecum was served, or the judge of any circuit court in vacation, may grant any relief with respect to the subpoena or subpoena duces tecum which any circuit court, under the West Virginia rules of civil procedure, could grant, and for any of the same reasons, with respect to any subpoena or subpoena duces tecum issued from any circuit court.
(e) In case of disobedience to or neglect of any subpoena or subpoena duces tecum served on any person, or the refusal of any witness to testify to any matter regarding which he or she may be lawfully interrogated, the circuit court of the county in which the hearing is being held, or the circuit court of Kanawha County or of the county in which the person resides, has his, her or its principal place of business or is employed, or the judge thereof in vacation, upon application of the chief administrative law judge of the tax tribunal, may compel obedience by attachment proceedings for contempt as in the case of disobedience of the requirements of a subpoena or subpoena duces tecum issued from the circuit court for a refusal to testify therein.
(f) Witnesses subpoenaed under this section shall testify under oath or affirmation.
§11-10A-14. Recording hearings; notice; record; transcripts; costs.

(a) Except in the small claims division, all hearings before the tribunal shall be recorded by means acceptable for use in courts of this state. All parties shall receive notice that the hearing will be recorded and that each is entitled to receive a copy of the recording at cost.
(b) A copy of the written exhibits made part of the record shall be available to any party upon request and payment of a reasonable fee.
(c) Upon appeal to circuit court, a verbatim transcript and copy of written exhibits shall be prepared for submission to the circuit court with the cost paid by the party taking the appeal: Provided, That if both parties appeal, the cost of the transcript shall be shared equally by the two parties.
§11-10A-15. Appearances before the tax tribunal.
(a) A person may appear before the tax tribunal in his or her own behalf, or may be represented by an attorney or by any other person as he or she may choose.
(b) Nothing in this section may be construed to permit the unauthorized practice of law as defined by the West Virginia supreme court of appeals.
§11-10A-16. Decisions and orders of the tax tribunal; publication.
(a) Every final decision or order of the tax tribunal shall be in writing and shall include a concise statement of the material facts and conclusions of law.
(b) All final decisions or orders of the tax tribunal shall be issued within a reasonable time, not to exceed six months, from the date the petition is filed or from the date the hearing record is closed, whichever is later.
(c) All final decisions and orders, except small claims decisions, shall be published in the state register after having been redacted to maintain confidentiality. The tax tribunal may also post its redacted decisions on the internet.
§11-10A-17. Service of notice of final decisions and orders.
(a) Notice of final decisions and orders of the tax tribunal shall be served upon the parties either by personal or substituted service, or by certified mail.
(1) Service of notice by personal or substituted service is valid if made by any method authorized by the rules of the West Virginia rules of civil procedure.
(2) Service of notice by certified mail is valid if accepted by the party, or if addressed to and mailed to the party's usual place of business or usual place of abode or last known address and accepted by any person.
(b) Any notice addressed and mailed in the manner specified in subsection (a), which is refused or not claimed, may then be served by first-class mail, postage prepaid, to the same address and the date of posting in the United States mail is the date of service
.
§11-10A-18. Finality of decision by the tax tribunal; amount due payable; prompt refunds.

Unless an appeal from the decision of the tax tribunal is taken pursuant to section eighteen of this article, within sixty days after service of notice of the decision, the tax tribunal's decision shall become final and conclusive and not subject to either administrative or judicial review. The amount, if any, owed by the taxpayer shall be due and payable to the tax commissioner on the day following the date upon which the decision became final. The amount of overpayment by the taxpayer, if any, shall be promptly refunded or credited to the taxpayer.
§11-10A-19. Judicial review of tax tribunal decisions.
(a) Either the taxpayer or the commissioner, or both, may appeal the final decision or order of the tax tribunal by taking an appeal to the circuit courts of this state within sixty days after being served with notice of the final decision or order.
(b) The tax tribunal may not be made a party in any judicial review of a decision or order it issued.
(c)(1) If the taxpayer appeals, the appeal may be taken in the circuit court of Kanawha County or any county:
(A) Wherein the activity sought to be taxed was engaged in; (B) Wherein the taxpayer resides; or
(C) Wherein the will of the decedent was probated or letters of administration granted.
(2) If the tax commissioner appeals, the appeal may be taken in Kanawha County: Provided, That the taxpayer shall have the right to remove the appeal to the county:
(A) Wherein the activity sought to be taxed was engaged in; (B) Wherein the taxpayer resides; or
(C) Wherein the will of the decedent was probated or letters of administration granted.
(3) In the event both parties appeal to different circuit courts, the appeals shall be consolidated. In the absence of agreement by the parties, the appeal shall be consolidated in the circuit court of the county in which the taxpayer filed the petition for appeal.
(d) The appeal proceeding shall be instituted by filing a petition for appeal with the circuit court, or the judge thereof in vacation, within the sixty day period prescribed in subsection (a) of this section. A copy of the petition for appeal shall be served on all parties appearing of record, other than the party appealing, by registered or certified mail. The petition for appeal shall state whether the appeal is taken on questions of law or questions of fact, or both, and set forth with particularity the items of the decision objected to, together with the reasons for the objections.
(e) If the appeal is of an assessment, except a jeopardy assessment for which security in the amount thereof was previously filed with the tax commissioner, then within ninety days after the petition for appeal is filed, or sooner if ordered by the circuit court, the petitioner shall file with the clerk of the circuit court a cash bond or a corporate surety bond approved by the clerk. The surety must be qualified to do business in this state. These bonds shall be conditioned upon the petitioner performing the orders of the court. The penalty of this bond shall be not less than the total amount of tax or revenue plus additions to tax, penalties and interest for which the taxpayer was found liable in the administrative decision of the tribunal. Notwithstanding the foregoing and in lieu of the bond, the tax commissioner, upon application of the petitioner, may upon a sufficient showing by the taxpayer, certify to the clerk of the circuit court that the assets of the taxpayer are adequate to secure performance of the orders of the court. No bond may be required of the tax commissioner.
(f) The circuit court shall hear the appeal as provided in section four, article five, chapter twenty-nine-a of this code: Provided, That when the appeal is to review a decision or order on a petition for refund or credit, the court may determine the legal rights of the parties, but in no event shall it enter a judgment for money.
(g) Unless the tax commissioner appeals an adverse court decision, the commissioner, upon receipt of the certified order of the court, shall promptly correct his or her assessment or issue his or her requisition on the treasury or establish a credit for the amount of an overpayment.
(h) Either party may appeal to the supreme court of appeals as provided in article six, chapter twenty-nine-a of this code.
§11-10A-20. Rules required.
The tax tribunal shall adopt rules of practice and procedure in accordance with the provisions of article three, chapter twenty-nine-a of this code no later than the thirty-first day of March, two thousand three.
§11-10A-21. Timely filing.
(a) Any petition, statement or other document required to be filed within a prescribed period or on or before a prescribed date under authority of this article is timely filed if it is delivered in person on or before the date to the tax tribunal at its office during normal business hours.
(b) Any petition, statement or other document required to be filed within a prescribed period or on or before a prescribed date under authority of this article which is delivered by the United States mail to the tax tribunal, is timely filed if the date of the United States postmark stamped on the envelope is within the prescribed period or on or before the prescribed date for filing, and the envelope was deposited in the United States mail, postage prepaid and properly addressed to the tax tribunal.
(c) The last date for timely filing includes any extension of time authorized by law or rule and any extension of time granted in writing by the tribunal.
§11-10A-22. Time for performance of acts where last day falls on Saturday, Sunday or legal holiday.

When the last day prescribed under authority of this article for performing any act falls on Saturday, Sunday or a legal holiday, the performance of the act is considered timely if it is performed on the next succeeding day which is not a Saturday, Sunday or a legal holiday. For purposes of this section, the last day for the performance of any act shall be determined by including any authorized extension of time. The term "legal holiday" means a legal holiday in this state.
§11-10A-23. Confidentiality.
The provisions of section five-d, article ten of this chapter, to the extent not inconsistent with the provisions of this article, are applicable to all employees of the tax tribunal.


NOTE: The purpose of this bill is to create the West Virginia Tax Tribunal, a quasi-judicial agency independent of the Tax Division to resolve disputes between the tax commissioner and taxpayers.

Strike-throughs indicate language that would be stricken from the present law and underscoring indicates language that would be added.

Article 10A is new; therefore, strike-throughs and underscoring have been omitted.

This bill is recommended for passage during the 2002 regular session by the Tax Division Appeal Procedures Study Committee.
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