Senate Bill No. 730
(By Senators McCabe, Plymale, Minard, Jenkins, Kessler, Barnes,
Caruth and Guills)
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[Introduced February 19, 2007; referred to the Committee on
Finance.]
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A BILL to amend the Code of West Virginia, 1931, as amended, by
adding thereto a new section, designated §11-10-7d; and to
amend and reenact §11-10-8 of said code, all relating to
narrowing the basis for issuance of assessments of additional
taxes by the State Tax Commissioner.
Be it enacted by the Legislature of West Virginia:
That the Code of West Virginia, 1931, as amended, be amended
by adding thereto a new section, designated §11-10-7d; and that
§11-10-8 of said code be amended and reenacted, all to read as
follows:
ARTICLE 10. PROCEDURE AND ADMINISTRATION.
§11-10-7d. New interpretation or application of law; affirmative
defense; definition.
(a) Unless expressly authorized by law, the Tax Commissioner
may not apply any newly enacted law retroactively or in a manner
that will prejudice a taxpayer for complying with prior law.
(b) If the Tax Commissioner adopts a new interpretation or
application of any provision of this chapter, or of any provision
of an article of this code that is not in this chapter but which is
administered under this article, or of the legislative,
interpretive or procedural rules relating thereto, or determines
that any of those provisions applies to a new or additional
category or type of taxpayer, or applies a new interpretation or
application of a provision of this chapter, or of any provision of
an article of this code that is not in this chapter but which is
administered under this article, to a taxpayer in a manner that is
contrary to the existing and generally followed tax compliance
practices of similarly situated taxpayers, and the change in
interpretation or application is not due to a change in the
provision by the Legislature through enactment of a bill or
approval of a legislative rule:
(1) The change in interpretation or application may be applied
only prospectively unless it is favorable to taxpayers;
(2) The Tax Commissioner may not assess any tax, additions to
tax, penalty or interest retroactively based on the change in
interpretation or application; and
(3) The change shall be recognized as an affirmative defense
in any administrative or judicial action for retroactive assessment
of tax, additions to tax, penalties or interest to taxable periods before the new interpretation or application was adopted by the Tax
Commissioner or the Legislature.
(c) Tax liabilities, additions to tax, penalties and interest
paid before a new interpretation or application of a provision of
this chapter, or of any provision of an article of this code that
is not in this chapter but which is administered under this article
by the Tax Commissioner, may not be refunded unless the taxpayer
requesting the refund provides evidence satisfactory to the Tax
Commissioner that the amounts will be refunded to the person who
paid an added charge to satisfy the tax.
(d) For the purposes of this section, the words "new
interpretation or application" include, but are not limited to,
policies and procedures adopted by administrative rule, as defined
in article one, chapter twenty-nine-a of this code, taxpayer
assistance advisory, private letter ruling, administrative notice
or instructions to a tax return or report.
§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 notice
of assessment or amended or supplemental assessment shall include a written explanation, in nontechnical, plain English language, of
any and all adjustments made, including, but not limited to, the
specific statutory, regulatory, or court specified legal grounds
for the adjustments. 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 nineteen 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 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 office
of tax appeals 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 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), subsection (a) of this section, within sixty
days after service of notice of the assessment 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 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 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 may not be held, but the record shall be properly amended
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.
NOTE: The purpose of this bill is to narrow the basis for
issuance of assessments of additional taxes by State Tax
Commissioner.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.
§11-10-7d is new; therefore, strike-throughs and underscoring
have been omitted.
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