§337.13.1. Power to employ counsel; attorney fees

A.(1) The local collector is authorized to employ private counsel to assist in the collection of any taxes, penalties, or interest due under this Subtitle, or to represent him in any dispute, contest, or other controversy involving the determination of sales and use tax due, or in any other proceeding under this Subtitle. The attorney fees and legal expenses incurred by the local collector for the employment of private counsel shall be reimbursed to him by the local taxing authorities and recoverable as a deduction from current collections, unless such attorney fees and legal expenses are recoverable as a reimbursement from the taxpayer.

(2) If any taxes, penalties, or interest due and final under this Subtitle are referred to an attorney at law for a collection action, an additional charge for attorney fees, in the amount of ten percent of the taxes, penalties, and interest due, except with respect to amounts timely paid under protest with a return that is not delinquent, or paid under protest to a vendor in accordance with law, shall be paid by the taxpayer to the local collector; provided, however, that the amount paid for attorney fees shall be subject to the discretion of the court or Board of Tax Appeals as to reasonableness.

(3) A taxpayer shall not be subject to the payment of attorney fees unless the local collector is the prevailing party entitled to reimbursement of attorney fees and costs as provided for in Subsection B of this Section.

B.(1) Except as otherwise provided for in Paragraph (A)(3) of this Section, the prevailing party in a dispute, contest, or other controversy involving the determination of sales and use tax due shall be entitled to reimbursement of attorney fees and costs, not to exceed ten percent of the taxes, penalties, and interest at issue, unless the position of the non-prevailing party is substantially justified. The prevailing party is defined as the party which has substantially prevailed with respect to the amount in controversy or substantially prevailed with respect to the most significant issue or set of issues presented. A position is substantially justified if it has a reasonable basis in law and fact. The reimbursement amount for attorney fees and costs shall be subject to the discretion of the court or Board of Tax Appeals as to reasonableness.

(2) The provisions of this Subsection shall not apply to amounts timely paid under protest by the taxpayer with a return that is not delinquent, or paid under protest to a vendor in accordance with law, as provided for in Subsection A of this Section.

(3) A local collector, which is a non-prevailing party in a dispute, contest, or other controversy involving the determination of sales and use tax due shall be reimbursed by the local taxing authorities for attorney fees and costs incurred by the tax collector and recoverable as a deduction from current collections.

(4) The provisions of this Subsection shall apply only to matters referred to private counsel by the local collector.

C. A local collector may waive the attorney fee award as provided for in this Section. A waiver of attorney fees by a local collector shall be considered timely if the notice of the waiver is mailed to a taxpayer by certified mail, return receipt requested, within thirty days of the service of process, or if it is waived in the collector's initial answer to a petition filed with the Board of Tax Appeals. If a local collector timely waives its attorney fee award, a taxpayer may not recover attorney fees as provided for in Subsection B of this Section.

Acts 2009, No. 493, §1, eff. July 10, 2009; Acts 2010, No. 929, §1, eff. July 2, 2010; Acts 2015, No. 210, §1, eff. June 23, 2015.

NOTE: See Acts 2015, No. 210, §4, re: retroactivity of certain provisions.