CODE OF VIRGINIA

PROHIBITED CONTRACTS; EXCEPTIONS; DETERMINATION BY DEPARTMENT OF TAXATION;
APPEAL; REMEDIES (§ 2.2-4321.1)

A. No state agency shall contract for goods or services with a nongovernmental
source if the source, or any affiliate of the source, is subject to the
provisions of (i) § 58.1-612 and fails or refuses to collect and remit the tax
on its sales delivered by any means to locations within the Commonwealth or (ii)
Article 2 (§ 58.1-320 et seq.) or Article 10 (§ 58.1-400 et seq.) of Chapter 3
of Title 58.1 and fails or refuses to remit any tax due thereunder. The
provisions of clause (ii) shall not apply to any person that has (a) entered
into a payment agreement with the Department of Taxation to pay the tax and is
not delinquent under the terms of the agreement or (b) appealed the assessment
of the tax in accordance with law and such appeal is pending.

B. A state agency may contract for goods or services with a source prohibited
under subsection A in the event of an emergency or where the nongovernmental
source is the sole source of such goods or services.

C. The determination of whether a source is a prohibited source shall be made by
the Department of Taxation after providing the prohibited source with notice and
an opportunity to respond to the proposed determination. The Department of
Taxation shall notify the Department of General Services of its determination.

D. The Department of General Services shall post public notice of all prohibited
sources on its public internet procurement website and on other appropriate
websites.

E. The remedies provided in Article 5 (§ 2.2-4357 et seq.) of this chapter
shall not apply to any determination made pursuant to this section and the sole
remedy for any adverse determination shall be as provided in subsection F.

F. Any source aggrieved by a determination of the Department of Taxation made
under this section may apply to the Tax Commissioner for correction of the
determination. The Tax Commissioner shall respond within 30 days of receipt of
the application for corrective action. Within 10 days after receipt of the Tax
Commissioner’s response, the aggrieved source may appeal to the Circuit
Court for the City of Richmond. If it is determined that the determination of
the Department of Taxation was arbitrary, capricious, or not in accordance with
law, the sole relief shall be restoration of the source’s eligibility to
contract with state agencies. No claim for damages or attorney’s fees
shall be awarded.

G. Any action of the Department of Taxation, the Department of General Services,
or of any state agency under this section shall be exempt from the provisions of
the Administrative Process Act (§ 2.2-4000 et seq.).

H. For the purposes of this section, “state agency” means any
authority, board, department, instrumentality, institution, agency or other unit
of state government. State agency shall not include any public institution of
higher education or any county, city or town or any local or regional
governmental authority.

HISTORY: 2003, cc. 994, 1006; 2006, c. 408.