What does it take to refund a Virginia local tax after the commissioner of the revenue decides the original assessment was wrong?

Plain-English summary

Spotsylvania County Commissioner of the Revenue Deborah Williams asked a cluster of related questions about how local tax refunds work in Virginia. The AG answered each:

1. What does the commissioner have to give the board of supervisors to "certify" a correction under § 58.1-3981(A)? Written verification that the commissioner has determined the original assessment was erroneous. The AG read "certificate" by reference to the ordinary meaning of "certify" ("to authenticate or verify in writing") and harmonized it with the use of "certified" in subsection (E) of the same statute, which deals with the same subject matter.

2. What is the county attorney's role in providing consent? The county attorney has a complementary statutory duty: either to consent to or to disagree with the commissioner's determination before the locality issues a refund. To make an informed decision, the county attorney can review the underlying records.

3. Can the commissioner share otherwise-confidential taxpayer information (returns, business and financial records) with the county attorney? Yes. Section 58.1-3(A)(2) permits disclosure of confidential taxpayer information "in the line of duty under the law." The commissioner may disclose information to local officials with tax-related responsibilities to the extent necessary for those officials to perform their duties. The county attorney's consent role under § 58.1-3981(A) qualifies.

4. Is the county attorney's consent required before issuing a refund based on a board of equalization order? No. The board of equalization process is separate from the commissioner-of-the-revenue process. When a board of equalization determines an assessment of taxable real estate should be decreased, the order entered into its minutes entitles the owner to a refund directly, and no further commissioner certification or county attorney consent is required.

The underlying structure: Virginia has two distinct routes for correcting and refunding local taxes. Route one runs through the commissioner of the revenue (with county attorney consent). Route two runs through the board of equalization (no consent needed). The AG kept the two routes separate.

Currency note

This opinion was issued in 2010. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

The local tax administration statutes in Title 58.1 have been amended in the years since 2010. Anyone working a current refund matter should check the present text of the local tax correction and refund statutes in Title 58.1 and any newer AG opinions on these procedures.

Common questions

What's the difference between the commissioner of the revenue route and the board of equalization route?
The commissioner of the revenue handles administrative corrections of assessments the commissioner originally made. A taxpayer applies to the commissioner under § 58.1-3980, the commissioner re-examines the assessment, and if the commissioner agrees it was erroneous, the refund flows through with the commissioner's certificate and the county attorney's consent. The board of equalization is a separate body that hears valuation challenges to real estate assessments. If the BOE orders the assessment reduced, the order itself triggers the refund without a second sign-off.

Why does the county attorney get to consent (or not consent)?
The statute treats the refund decision as serious enough to require a legal check on the commissioner's determination. The county attorney's consent is the locality's way of confirming, through legal counsel, that the determination is sound before public money goes out the door.

Can a county attorney refuse to consent?
The opinion does not detail what happens then. Section 58.1-3981(A) requires the consent for the refund to proceed; if the consent is withheld, the refund stops there. The opinion does not analyze remedies a taxpayer would have in that situation.

Does the commissioner have to hand over an entire tax file to the county attorney?
Only what is necessary for the county attorney to make an informed decision about whether to consent. The "line of duty" exception in § 58.1-3(A)(2) is bounded by necessity. The commissioner should provide enough information for the county attorney to perform their statutory role and no more.

What about other county officials (treasurer, county manager) wanting to see the records?
The opinion focuses on the county attorney's specific consent role under § 58.1-3981(A). The "line of duty" exception permits disclosure to local officials with tax-related duties under prior AG opinions, but only to the extent necessary for those duties. The principle would extend to other officials only if and to the extent they have statutory tax-administration responsibilities that require the information.

Background and statutory framework

The two parallel routes:

Commissioner-of-the-revenue route:

• § 58.1-3980. Taxpayer applies to the commissioner of the revenue for correction.
• § 58.1-3981(A). If the commissioner is satisfied the original assessment was erroneous, the commissioner corrects it. If the tax has been paid, the governing body, on the commissioner's certificate and the county attorney's consent, directs the treasurer to refund the excess.
• § 58.1-3981(E). Parallel use of "certified" language, supporting the in pari materia reading.

Board-of-equalization route:

• When a board of equalization determines a real estate assessment should be decreased, it enters an order to that effect into its minutes.
• That order entitles the owner to a refund of the excess paid, and no further action by the commissioner of the revenue is required. The commissioner has no power or duty to certify a BOE-ordered adjustment, so there is no certification for the county attorney to consent to.

Taxpayer confidentiality:

• § 58.1-3(A)(2). Disclosure of confidential taxpayer information is permitted "in the line of duty under the law." Prior AG opinions read this as allowing disclosure to local officials with tax-related duties to the extent necessary for those duties.

The reading that knits it all together: where a process explicitly involves the county attorney (refund based on commissioner's correction), the commissioner can share what the attorney needs; where a process does not involve the county attorney (BOE-ordered refund), the attorney has no consent role and the refund flows directly.

Citations

• Va. Code § 2.2-505
• Va. Code Ann. § 58.1-3(A)(2)
• Va. Code Ann. § 58.1-3980
• Va. Code Ann. § 58.1-3981, including subsections (A) and (E)

Source

• Landing page: https://www.oag.state.va.us/annual-reports-opinions/official-opinions
• Original PDF: https://www.oag.state.va.us/files/Opinions/2010/10-094-Williams.pdf

Original opinion text

COMMONWEALTH of VIRGINIA
Office of the Attorney General
Kenneth T. Cuccinelli, II
Attorney General

December 22, 2010

The Honorable Deborah F. Williams
Spotsylvania County Commissioner of the Revenue
P.O. Box 175
Spotsylvania, Virginia 22553

Dear Ms. Williams:

I am responding to your request for an official advisory opinion in accordance with § 2.2-505 of the Code of Virginia.

Issues Presented

You inquire regarding three issues relating to the issuance of refunds of local taxes to taxpayers who already have paid assessments that local tax officials later reduce through administrative procedures. Specifically, you ask what § 58.1-3981(A) requires a local commissioner of the revenue to tender to the board of supervisors in order to "certify" the commissioner's determination that a local tax assessment was erroneous. You also seek guidance as to the role of a county attorney in providing his "consent" to the commissioner of the revenue's determination, as required by that subsection. You further ask to what extent the commissioner of the revenue lawfully may provide an affected taxpayer's local tax filings, with attached business and financial records to the county attorney. Finally, you ask whether a county attorney's review of and consent to a downward adjustment of a local real estate tax assessment by the county's board of equalization is a necessary predicate to the county's issuance of a refund of excess taxes that a taxpayer initially paid.

Response

It is my opinion that a county commissioner of the revenue's "certification" of a correction of a local tax assessment for purposes of § 58.1-3981(A) means that the commissioner should provide written verification that he has determined that the original local tax assessment paid by the affected taxpayer was erroneous. Further, it is my opinion that § 58.1-3(A)(2) authorizes a county commissioner of the revenue to supply to the attorney for his county any information that is necessary to enable the attorney to make an informed decision as to whether to consent to the commissioner of the revenue's determination. Finally, I am of the opinion that a county attorney's consent to a reduction of a real estate tax assessment by a county board of equalization is not a prerequisite to the county's issuance of a refund of excess taxes.

Background

You report that in situations where you have determined that a local tax assessment issued by your office was erroneous, the attorney for your county has requested information concerning the affected taxpayer's tax filings. This request has included any business or financial records attached to those filings. You also state that the county attorney has directed you to prepare a "certification" of an order issued by your county's board of equalization that will reduce the value of a real estate tax assessment, ostensibly to enable your county's officials to process and approve a refund of taxes resulting from the board of equalization's adjustment to the assessment.

Applicable Law and Discussion

Section 58.1-3981 establishes the procedures a locality's officials and governing body must follow where the locality's commissioner of the revenue determines that a local tax assessment he previously issued is erroneous. Subsection (A) of that statute states, in relevant part:

If the commissioner of the revenue ... is satisfied that he has erroneously assessed [a taxpayer who applies to the commissioner of the revenue for correction of a local tax assessment, pursuant to § 58.1-3980] with any such tax, he shall correct such assessment. If the assessment exceeds the proper amount, he shall exonerate the applicant from the payment of so much as is erroneously charged if not paid into the treasury of the county or city. If the assessment has been paid, the governing body of the county or city shall, upon the certificate of the commissioner with the consent of the town, city or county attorney, or if none, the attorney for the Commonwealth, that such assessment was erroneous, direct the treasurer of the county, city or town to refund the excess to the taxpayer.

Interpreting this statutory language, a circuit court concluded that a county board of supervisors lacks the statutory authority to correct local tax assessments made by the county's commissioner of the revenue, and, as a result, "a refund can only be authorized and directed to be paid by the [t]reasurer after the [c]ommissioner corrects the assessment and certifies the fact of the erroneous assessment to the governing body of the county."

With regard to the General Assembly's intended meaning of the word "certificate" in § 58.1-3981(A), a prior opinion of the Attorney General construed the use of the term "certified" in § 58.1-3981(E) according to the ordinary meaning of the word "certify," which is "to authenticate or verify in writing." Because subsections (A) and (E) of § 58.1-3981 deal with essentially the same subject, i.e., confirmation of the correction of a local tax assessment by a local commissioner of the revenue or equivalent assessing official, their uses of the terms "certificate" and "certified," respectively, should be construed in pari materia, so as to harmonize the general tenor of the statute as a whole. Applying this maxim to the court's interpretation of § 58.1-3981(A), I conclude that a county commissioner of the revenue's "certificate" under that subsection entails his written verification to the board of supervisors that he has determined an assessment to be erroneous.

In addition to requiring a local commissioner of the revenue to certify that an assessment is erroneous, § 58.1-3981(A) further provides that the consent of the attorney for the locality is necessary before the governing body authorizes the local treasurer to refund the excess taxes. As a result, the Code imposes a duty on the attorney for a locality that is complementary to the duties of the locality's commissioner of the revenue and governing body. Section 58.1-3(A)(2) permits disclosure of otherwise confidential taxpayer information "in the line of duty under the law." The commissioner of the revenue, therefore, lawfully may disclose taxpayer information acquired in the performance of his tax-related duties to personnel of the locality who have a legal responsibility concerning the administration of local taxes. Prior opinions of the Attorney General indicate that a commissioner of the revenue may disclose taxpayer information to local officials charged with tax-related duties under the "line of duty" exception to § 58.1-3 to the extent that such information is "necessary for the performance of the officers' or employees' duties." Moreover, because § 58.1-3981(A) places upon the attorney for a locality a duty either to consent to or to disagree with a commissioner of the revenue's determination that a local tax assessment was erroneous, I conclude that a county commissioner of the revenue lawfully may provide the county attorney with such information as is necessary for the county attorney to make an informed decision whether or not to consent to the commissioner's determination.

In contrast to the two-step procedure outlined above, the statutory process for adjusting local real estate tax assessments by local boards of equalization does not require a second layer of approval by the county attorney. Instead, when a board of equalization determines that an assessment of the value of taxable real estate should be decreased, it has the duty to enter into the board's minutes an order giving effect to that determination. The board of equalization's order decreasing an assessment entitles the owner of the affected real estate to a refund of monies paid in excess of the reduced assessment and no further action by the commissioner of the revenue is necessary. Therefore, I conclude that a commissioner of the revenue has no power or duty to certify an adjustment to a real estate tax assessment ordered by the board of equalization, and consequently, there is no certification by the commissioner to which the attorney for the locality must consent before the treasurer may issue a refund of excess taxes paid by the affected taxpayer.

Conclusion

Accordingly, it is my opinion that a county commissioner of the revenue's "certification" of a correction of a local tax assessment for purposes of § 58.1-3981(A) entails the commissioner's written verification that he has determined that the original local tax assessment paid by the affected taxpayer was erroneous. Further, it is my opinion that § 58.1-3(A)(2) authorizes a county commissioner of the revenue to supply to the attorney for his county any information that is necessary to enable the attorney to make an informed decision as to whether to consent to the commissioner of the revenue's determination, pursuant to § 58.1-3981(A). Finally, I am of the opinion that a county attorney's consent to a reduction of a real estate tax assessment by a county board of equalization is not a prerequisite to the county's issuance of a refund of excess taxes.

With kindest regards, I am

Very truly yours,

Kenneth T. Cuccinelli, II
Attorney General