Tax Type
Recordation Tax
Description
Claim was not filed within the statutory limitations period, refund request denied.
Topic
Statute of Limitations
Date Issued
08-20-2012
August 20, 2012
Re: § 58.1-1824 Application: Recordation Tax
Dear *****:
This will reply to your letter in which you request a refund of state and local recordation taxes paid by ***** (the "Taxpayer") for recording a deed of trust. I apologize for the delay in responding to your letter.
FACTS
In January 2008, the Taxpayer recorded a credit line deed of trust in the ***** (the "County") securing a loan for developing commercial property. Part of the loan was designated for the acquisition of the property and the other part of the loan was designated for property improvement. The Taxpayer was unable to utilize the portion of the loan designated for improvements so it was released back to the lender. The Taxpayer filed a request for refund of the recordation tax attributable to the portion of the loan released to the lender.
DETERMINATION
Pursuant to Va. Code § 58.1-1824, any, person who has paid an assessment of taxes administered by the Department of Taxation may preserve his judicial remedies by filing a claim for refund with the Tax Commissioner within three years of the date such tax was assessed. Virginia Code § 58.1-1820 defines an assessment to include "an assessment made pursuant to notice by the Department of Taxation and self assessments made by a taxpayer upon the filing of a return or otherwise not pursuant to notice." In the Taxpayer's case, payment of the tax at the time the deed of trust was recorded falls within the definition of "assessment" in Va. Code § 58.1-1820.
The Department has previously ruled that tax paid on any instrument recorded more than three years prior to the date that a taxpayer's protective claim is filed is not eligible for a refund. See Public Document (P.D.) 09-65 (5/13/2009). In this case, the credit line deed of trust was filed in January 2008. Pursuant to Va. Code § 58.1-1824, the Taxpayer was required to file its protective claim for refund within three years of the date the tax was assessed, i.e., by January 2011. The Taxpayer did not file its protective claim with the Department until September 2011, well beyond the expiration of the filing deadline. Accordingly, the protective claim was not filed within the statutory limitations period, and the refund request must be denied.
The Code of Virginia sections and public document cited, along with other reference documents, are available on-line at www.tax.virginia.gov in the Tax Policy Library section of the Department's website. If you have any questions concerning this determination, you may contact ***** in the Department's Office of Tax Policy, Appeals and Rulings Division, at *****.
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- Sincerely,
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- Craig M. Burns
Tax Commissioner
- Craig M. Burns
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AR/1-4893198304.B
Rulings of the Tax Commissioner