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2023 SESSION

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23104288D
SENATE BILL NO. 1502 Offered January 20, 2023 A BILL to amend and reenact § 58.1-1823 of the Code of Virginia, relating to state taxes; reassessment and refund upon filing of amended return or payment of assessment. ---------- Patron-- Petersen ---------- Referred to Committee on Finance and Appropriations ----------

Be it enacted by the General Assembly of Virginia:

1. That § 58.1-1823 of the Code of Virginia is amended and reenacted as follows:

§ 58.1-1823. Reassessment and refund upon the filing of amended return or the payment of an assessment.

Any person filing a tax return or paying an assessment required for any tax administered by the Department may file an amended return with the Department within the later of (i) three years from the last day prescribed by law for the timely filing of the return; (ii) one year from the final determination date, as defined in § 58.1-311.2, for any change or correction in the liability of the taxpayer for any federal tax upon which the state tax is based, provided that the refund does not exceed the amount of the decrease in Virginia tax attributable to such federal change or correction; (iii) two years from the filing of an amended Virginia return resulting in the payment of additional tax, provided that the amended return raises issues relating solely to such prior amended return and that the refund does not exceed the amount of the payment with such prior amended return; (iv) two years from the payment of an assessment, provided that the amended return raises issues relating solely to such assessment and that the refund does not exceed the amount of such payment; or (v) one year from the final determination of any change or correction in the income tax of the taxpayer for any other state, provided that the refund does not exceed the amount of the decrease in Virginia tax attributable to such change or correction. If the Department is satisfied, by evidence submitted to it or otherwise, that the tax assessed and paid upon the original return exceeds the proper amount, the Department may reassess the taxpayer and order that any amount excessively paid be refunded to him. The Department may reduce such refund by the amount of any taxes, penalties and interest which are due for the period covered by the amended return, or any past-due taxes, penalties and interest which have been assessed within the appropriate period of limitations. Any order of the Department denying such reassessment and refund, or the failure of the Department to act thereon within three months shall, as to matters first raised by the amended return, be deemed an assessment for the purpose of enabling the taxpayer to pursue the remedies allowed under this chapter. For any sales and use tax assessment pursuant to Chapter 6 (§ 58.1-600 et seq.) that is outstanding on or that is assessed on and after July 1, 2023, a refund or credit shall be allowed for erroneous tax payments for the identical periods of any such assessment. A refund or credit shall be allowed for the use tax paid directly to the Department and the sales tax paid to dealers. Such refund or credit shall be allowed on either an actual basis or a projected basis using methodology utilized by the Department in the performance of auditing. A taxpayer may perform an actual refund or credit in lieu of a projection.