2010 Session

Budget Bill - HB29 (Chapter 872)

Department of Taxation

Item 270

Item 270 (Not set out)

First Year - FY2009Second Year - FY2010
Revenue Administration Services (73200)$60,647,483$61,357,475
Tax Return Processing (73214)FY2009 $13,747,908FY2010 $13,708,408
Customer Services (73217)FY2009 $10,146,696FY2010 $10,696,188
Compliance Audit (73218)FY2009 $19,136,439FY2010 $19,136,439
Compliance Collections (73219)FY2009 $17,616,440FY2010 $17,816,440
Fund Sources:  
GeneralFY2009 $51,568,909FY2010 $52,078,901
SpecialFY2009 $8,613,155FY2010 $8,613,155
Trust and AgencyFY2009 $452,457FY2010 $652,457
Dedicated Special RevenueFY2009 $12,962FY2010 $12,962

Authority: Title 3.1, Chapters 18, 25.3 and 27; Title 58.1, Code of Virginia.

A. Pursuant to § 58.1-1803, Code of Virginia, the Tax Commissioner is hereby authorized to contract with private collection agencies for the collection of delinquent accounts. The State Comptroller is hereby authorized to deposit collections from such agencies into the Contract Collector Fund (§ 58.1-1803, Code of Virginia). Revenue in the Contract Collector Fund may be used to pay private collection agencies/attorneys and perform oversight of their operations, upgrade audit and collection systems and data interfaces, and retain experts to perform analysis of receivables and collection techniques.  Any balance in the fund remaining after such payment shall be deposited into the appropriate general, nongeneral, or local fund no later than June 30 of each year.

B. There is hereby appropriated, for each year of the biennium, revenues from the sales tax on fuel in certain transportation districts to cover only the direct cost of administration incurred by the Department in collecting these taxes as provided by § 58.1-1724, Code of Virginia.

C.1. The Department of Taxation is authorized to retain, as special revenue, its reasonable share of any court fines and fees to reimburse the Department for any ongoing operational collection expenses.

2. Any form of state debt assigned to the Department of Taxation for collection may be collected by the Department in the same manner and means as state taxes may be collected pursuant to Title 58.1, Chapter 18, Code of Virginia.

D.  The Department of Taxation is authorized to make tax incentive payments to small tobacco product manufacturers who do not participate in the 1998 Tobacco Master Settlement Agreement, pursuant to Chapter 901 of the 2005 Acts of Assembly. 

E.  The Department of Taxation is hereby appropriated revenues from the Communications Sales and Use Tax Trust Fund to recover the direct cost of administration incurred by the department in implementing and collecting this tax as provided by § 58.1-662, Code of Virginia.

G. The Tax Commissioner shall have the authority to waive penalties and grant extensions of time to file a return or pay a tax, or both, to any class of taxpayers when the Tax Commissioner in his discretion finds that the normal due date has, or would, cause undue hardship to taxpayers who were, or would be, unable to use electronic means to file a return or pay a tax because of a power or systems failure that causes the Department's electronic filing or payment systems to be nonfunctional for all or a portion of a day on or about the due date for a return or payment.

H. The Department of Taxation is hereby appropriated Land Conservation Incentive Act fees imposed under § 58.1-513 C. 2., Code of Virginia, on the transferring of the value of the donated interest. The Code of Virginia specifies such fees will be used by the Departments of Taxation and Conservation and Recreation to recover the direct cost of administration incurred in implementing the Virginia Land Conservation Act. 

I.  In the event that the United States Congress adopts legislation allowing local governments, with the assistance of the Commonwealth, to collect delinquent local taxes using offsets from federal income taxes, the Department of Accounts shall provide a treasury loan to the Department of Taxation to finance the costs of modifying the agency's computer systems to implement this federal debt setoff program.  This treasury loan shall be repaid from the proceeds collected from the offsets of federal income taxes collected on behalf of localities by the Department of Taxation.

J. Upon request of the Secretary of Finance, the State Comptroller shall grant the Department of Taxation a treasury loan for the planning and implementation of the Virginia Tax Amnesty Program, estimated to be $6,951,928. Repayment of this loan will be from the gross revenues generated by the amnesty program.

K. The Department of Taxation shall (1) secure and utilize software based on Global Positioning System data in the allocation to localities of the one percent local option sales and use tax, (2) modify remittance forms as appropriate to require each in-state vendor filing a consolidated return to report how many places of business that the vendor has in each locality, (3) provide localities with increased computer systems access to information-only data in order to facilitate local input in error identification, and (4) report to the Chairmen of the Senate Finance and House Appropriations Committees by September 1, 2009, on options for providing incentives and/or penalties for erroneous reporting of sales and use tax data by merchants.

L. The Department of Taxation is hereby appropriated revenues from the digital media fee imposed pursuant to § 58.1-1731, Code of Virginia, to recover the direct cost of administration incurred by the department in implementing and collecting such fee. Documented costs incurred in fiscal year 2009, up to a total $320,000, may be recovered from fees remitted in fiscal year 2010.