The City of Colonial Heights, Virginia v. Alpene Land, LLC

COURT OF APPEALS OF VIRGINIA Record No. 0145-25-2 THE CITY OF COLONIAL HEIGHTS, VIRGINIA v. ALPENE LAND, LLC, ET AL. Present: Judges Causey, Chaney and White Argued at Richmond, Virginia Opinion Issued November 10, 2026* FROM THE CIRCUIT COURT OF THE CITY OF COLONIAL HEIGHTS Steven B. Novey, Judge M. Tolley Gwinn (Andrew R. McRoberts; Andrew P. Selman; Hugh P. Fisher, III, City Attorney; Sands Anderson PC; on briefs), for appellant. S. Keith Barker (S. Keith Barker, P.C., on brief), for appellees. MEMORANDUM OPINION BY JUDGE DORIS HENDERSON CAUSEY This appeal concerns a dispute over the City of Colonial Heights’ ability to collect penalties and interest on certain delinquent real property taxes. In June 2024, the Circuit Court for the City of Colonial Heights ruled that the City was not permitted to collect penalties or interest because the City’s operative ordinance was ineffective. In August 2024, prior to the entry of the final order, the City passed a new ordinance (Ordinance No. 24-13) that purported to retroactively set interest and penalty rates at ten percent each. In November 2024, the circuit court ruled that Ordinance No. 24- 13 did not apply retroactively. The City appeals both rulings. For the reasons discussed below, we reverse the circuit court’s judgment in part and hold that statewide default rates imposed by the Code of Virginia * This opinion is not designated for publication. See Code § 17.1-413(A). permitted the City to collect penalties and interest on delinquent property taxes. We affirm the circuit court’s ruling that the City lacked the authority to retroactively impose the changes set forth in the August 2024 ordinance. BACKGROUND In December 2022, the City of Colonial Heights filed one complaint against Alpene Land, LLC, and another complaint against Barker Investment Corporation and A. Louise Haine (these three parties will be referred to collectively as “the taxpayers”). In the two suits, the City sought the sale⎯under Code § 58.1-3965⎯of certain parcels of land owned by the taxpayers for allegedly unpaid real estate taxes. In July 2023, the City filed a third suit against Alpene Land, LLC, seeking sale of a separate parcel under Code § 58.1-3965. The three cases proceeded separately and simultaneously under separate case numbers but were ultimately consolidated in the circuit court’s final order. In May 2024, the taxpayers sought to “redeem” their property pursuant to the relevant statutory mechanism by “paying into the court” the amount that they argued represented the full amount “due with respect to [the] real estate” sought to be purchased by the City. Code § 58.1-3974. Several grounds of disagreement arose between the parties concerning the total amount due. The court’s rulings on two areas of the parties’ disagreement are not challenged on appeal but are useful to note as background. First, the parties disagreed as to the total principal amount of delinquent real estate taxes due and the years for which such taxes were due. The parties and court ultimately determined that the taxpayers’ liability in this case included over $65,000 in delinquent real estate taxes incurred over nine tax years, spanning 2016 through 2024 (with the specific years applicable varying by property). Second, the taxpayers disputed the City’s right to collect attorney -2- fees. In a letter opinion issued in June 2024, the circuit court ruled that the City was indeed authorized to collect attorney fees in the instant case. The court also decided on a third issue in its June 2024 letter opinion: whether the City’s ordinance permitted it to collect interest and penalties on the delinquent property taxes. This question is at the core of this appeal. On this issue, the circuit court ruled for the taxpayers. The circuit court found that City Code § 258-13, the ordinance purporting to authorize certain delinquent penalty and interest rates on such taxes, was ineffective and “enacts nothing.” Consequently, it held that the City lacked authority to collect penalties or interest. At a hearing on July 11, 2024, the circuit court reaffirmed its ruling, rejecting the City’s argument that default penalty and interest rates stated under Code § 58.1-3915 and -3918 should have applied. On August 13, 2024, prior to the entry of a final order, the City passed an ordinance aimed at authorizing it to collect penalties and interest on delinquent property taxes. Ordinance No. 24-13 (the ordinance). The ordinance stated that taxpayers failing to pay real estate taxes by the due date would “incur a penalty of ten percent of the tax” and that “[i]nterest at the rate of ten percent annually shall be levied upon the principal and penalties of” delinquent real estate taxes. Id. at (A) & (B). Further, the ordinance stated that “[t]he provisions of this section are declarative of current policy and shall be applied retroactively to all real estate taxes due on and after May 15, 1992.” Id. at (E) (emphasis added). The City orally notified the court of the new ordinance at the next hearing, which was held on August 22, 2024. The City argued that the ordinance applied retroactively to permit the City to collect penalties and interest of ten percent for the period of taxes owed.1 The taxpayers argued that pursuant to the Dillon Rule, the City lacked the authority to impose the delinquent real estate 1 The City stated that it had always interpreted the ordinance that the court found to be ineffective to have granted it the authority to impose interest and penalty rates of ten percent. -3- penalties and interest retroactively. After receiving supplemental briefing from the parties, the circuit court conducted a second hearing on the issue in October 2024. On November 7, 2024, the circuit court issued a second letter opinion regarding the retroactive penalties and interest and again ruled in the taxpayers’ favor. The opinion explained that under the Dillon Rule, the City had not been delegated the authority to pass a “tax ordinance retroactively applying interest and penalties to previously delinquent property taxes[.]” The August 2024 ordinance, therefore, was “invalid as applied retroactively and is only valid prospectively from when the city passed the ordinance.” On December 23, 2024, the court memorialized the rulings from both of its letter opinions in a final order. It further established the total amounts due, including principal, attorney fees, and certain other costs. Finally, the court denied the taxpayers’ request for attorney fees. This appeal followed. ANALYSIS I. The City’s Ability to Collect Penalties and Interest under the Ordinance In its first assignment of error, the City challenges the circuit court’s first ruling concerning its ability to collect penalties and interest. In this ruling, the circuit court held that because the ordinance was ineffective, the City lacked the authority to collect interest and penalties on delinquent property taxes. The City assigns error as follows: “The circuit court erred in holding that the City could not collect interest and penalties on the delinquent real estate taxes at issue when it refused to apply the mandatory rates for penalties and interest provided in Va. Code §§ 58.1-3915 and 58.1-3918.” A. Applicable Standard of Review and Principles of Statutory Interpretation This first assignment of error requires us to interpret the City’s ordinance and certain provisions of the Code of Virginia. In interpreting both the ordinance and the Code, this Court will -4- apply a de novo standard of review. Bd. of Supervisors v. Cohn, 296 Va. 465, 472 (2018) (citing Conyers v. Martial Arts World of Richmond, Inc., 273 Va. 96, 104 (2007)). In interpreting statutes, this Court’s “primary goal . . . is to determine the General Assembly’s intent.” Commonwealth ex rel. Fair Hous. Bd. v. Windsor Plaza Condo. Ass’n, 289 Va. 34, 51 (2014) (citing Sheppard v. Junes, 287 Va. 397, 403 (2014)). “To do this, we examine the language contained in the statute itself, if unambiguous, and apply its plain meaning.” Id. The same rules guide our review of municipal ordinances. Miller & Rhoads Bldg., L.L.C. v. City of Richmond, 292 Va. 537, 541 (2016). In construing tax statutes, this Court construes ambiguous provisions “in favor of the taxpayer.” Kohl’s Dep’t Stores, Inc. v. Va. Dep’t of Tax’n, 295 Va. 177, 188 (2018). However, “this principle is not an absolute formula that overrides all other canons of interpretation.” Id. at 188-89. “Statutory language is ambiguous only ‘when it may be understood in more than one way, or simultaneously refers to two or more things.’” Ford v. Commonwealth, 86 Va. App. 41, 49 (2025) (quoting Williams v. Commonwealth, 61 Va. App. 1, 9 (2012)). Therefore, when statutory language is not ambiguous, i.e., “when the General Assembly’s intent in enacting a tax statute is ascertainable, the principle requiring strict construction does not prohibit us from giving effect to this intention.” Kohl’s Dep’t Stores, 295 Va. at 189 (emphasis added). B. The Code of Virginia’s Default Penalty and Interest Rates Apply The Code of Virginia establishes a default penalty rate and a default interest rate applicable to delinquent property taxes. Under Code § 58.1-3915, a municipality may collect a default five percent penalty on delinquent property taxes “[e]xcept as otherwise provided by ordinance under § 58.1-3916.” Similarly, under Code § 58.1-3918, a municipality may collect a default annual interest rate of ten percent on delinquent taxes, except “when the penalty or interest on such taxes is regulated by ordinance under § 58.1-3916.” Code § 58.1-3918. -5-  Code § 58.1-3916 permits a municipality to set its own penalty and interest rates. See Code § 58.1-3916 (stating that a municipality “may provide by ordinance penalties for failure to file [property tax] applications and returns and for nonpayments in time; may provide for payment of interest on delinquent taxes”). Additionally, this code section sets limits for such penalty and interest rates: The penalty rate “shall not exceed” certain defined figures, depending on the type of penalty and the degree of delinquency. Id. “Interest may commence not earlier than the first day following the day such taxes are due by ordinance to be filed, at a rate not to exceed 10 percent per year.” Id. Interest may not exceed a different rate in any “second and subsequent year[s.]” Id. The City of Colonial Heights’ municipal ordinance stated, “[I]nterest and penalties on delinquent taxes shall be as provided in § 58.1-3916 of the Code of Virginia” (former City Code § 258-13). However, Code § 58.1-3916 does not set an interest or penalty rate; it merely empowers municipalities to set penalty and interest rates, while precluding them from setting rates above a certain level. Therefore, the City did not set an interest or penalty rate; as the circuit court found, this ordinance “enacts nothing.” The circuit court, while noting the ordinance’s ineffectiveness, also held that the default penalty and interest rates set forth in Code § 58.1-3916 were inapplicable. The circuit court stressed that the ordinance was ambiguous and noted that, under Virginia law, ambiguous tax laws must be construed in favor of the taxpayer. See Kohl’s Dep’t Stores, Inc., 295 Va. at 189. Therefore, the circuit court concluded that the City was not authorized to collect any interest or penalties on the late taxes. The circuit court was correct that the ordinance did not set an interest or penalty rate. Consequently, Code §§ 58.1-3915 and -3918 apply. Because the City did not “otherwise provide[]” any separate penalty rate, the default penalty rate of five percent was applicable. Code § 58.1-3915. Similarly, under Code § 58.1-3918, an ordinance that failed to set meaningful rules regarding the -6- interest rate has not “regulate[d]” interest or penalties. See Regulate, Black’s Law Dictionary (12th ed. 2024) (“To control (an activity or process) esp. through the implementation of rules.”). Therefore, the default ten percent interest rate in Code § 58.1-3918 applies.2 The City was thus authorized to impose the five percent penalty and ten percent interest rates on the delinquent real estate taxes. Resisting this conclusion, the taxpayers stress the rule of interpretation requiring that ambiguous tax statutes be interpreted in favor of the taxpayer and argue that it is possible that the municipality intended, in its relevant ordinance, to set a penalty and interest rate of zero percent. As noted, an ambiguity in statutory language would be found where the language “may be understood in more than one way.” Ford, 86 Va. App. at 49 (quoting Williams, 61 Va. App. at 9). However, under either interpretation, the ordinance does not actually establish a specific penalty or interest rate. The ordinance clearly does not state that the penalty and interest rates are zero. It says that the penalty and interest rates are “as provided in § 58.1-3916 of the Code of Virginia” (former City Code § 258-13). Although the ordinance’s language may be ambiguous, neither reasonable interpretation establishes an alternative rate or displaces the statutory default rates under Code §§ 58.1-3915 and -3918. As Code § 58.1-3916 does not set any specific penalties and interest rates, the ordinance’s reference to this statute can be understood in two possible ways: as acknowledging the legal applicability of the interest and penalty rate maximums set out in Code § 58.1-3916— which would be a legally irrelevant statement, as the Code’s maximums would be effective, regardless of any local enactment—or as doing nothing. Although we must construe any ambiguity in the ordinance in favor of the taxpayer, there is no reasonable interpretation that says that the 2 Of note, the fact that the City charged certain rates of penalty and interest cannot serve to exempt the taxpayers from the default rates applicable in Code §§ 58.1-3915 and -3918. Those rates apply in the absence of regulation “by ordinance.” Id. (emphasis added). -7- taxpayer pays a zero percent interest rate. Instead, under any reasonable construction of the ordinance, the ordinance “enact[ed] nothing.” Because the ordinance “enact[ed] nothing,” the Code clearly directs that the default rates apply. Whether the ordinance merely restated the requirements of the Code or did nothing at all, it did not, in itself “otherwise provide[]” a penalty rate on delinquent property taxes, nor did it “regulate” delinquent property taxes. See Regulate, Black’s Law Dictionary, supra. Therefore, pursuant to the plain language of the Code, the default provisions are applicable to this situation. See Windsor Plaza Condo. Ass’n, 289 Va. at 51. Because the General Assembly’s intent is manifested in its plain language, this plain language controls our analysis. See Kohl’s Dep’t Stores, 295 Va. at 189. Thus, the circuit court erred in concluding that the City of Colonial Heights was barred from collecting interest or penalties on the delinquent property taxes pursuant to the ordinance in place at the time the taxes were due and owing. Nevertheless, that ordinance did not set a zero percent penalty or interest rate. Instead, the City was authorized to collect a default rate of ten percent interest on delinquent property taxes, and impose a default five percent penalty on the same. Code §§ 58.1-3918, -3915. II. The City’s Ability to Retroactively Impose a Ten Percent Penalty Rate on Delinquent Real Estate Taxes The City also argues that the circuit court erred in invalidating the retroactive application of the penalty and interest rates imposed by Ordinance No. 24-13. The City’s second assignment of error challenges this ruling, stating that: “The circuit court erred in holding that Ordinance No. 24- 13 adopted by the City of Colonial Heights, which specifies the penalty and interest rate on delinquent real estate taxes, has no retroactive application.”3 3 The taxpayers argue that this Court may not review the City’s arguments due to their failure to file transcripts of certain hearings. However, we have permitted review of assignments -8-  The ordinance retroactively imposed both a ten percent interest rate and a ten percent penalty rate. Given our holding that a ten percent interest rate was already applicable by default under Code § 58.1-3918, there is no retroactive change in interest rate available for our review. However, given our holding that the penalty rate applicable by default was five percent under Code § 58.1-3915, we must consider whether the ordinance validly imposed a retroactive increase in the City’s penalty rate to ten percent. The circuit court’s ruling was rendered pursuant to the Dillon Rule. “The Dillon Rule of strict construction controls our determination of the powers of local governing bodies.” Bragg Hill Corp. v. City of Fredericksburg, 297 Va. 566, 578 (2019) (quoting Marble Techs., Inc. v. City of Hampton, 279 Va. 409, 417 (2010)). “Whether a municipality has the power to act [pursuant to the Dillon Rule] is a question of law we review de novo.” Id. “The Dillon Rule provides that ‘municipal corporations have only those powers that are expressly granted, those necessarily or fairly implied from expressly granted powers, and those that are essential and indispensable.’” Marble Techs., 279 Va. at 417 (quoting Bd. of Zoning Appeals v. Bd. of Supervisors, 276 Va. 550, 553-54 (2008)). “This is so because ‘[a] municipal corporation has no element of sovereignty. It is a mere local agency of the state, having no other powers than such as are clearly and unmistakably granted by the law-making power.” Id. (alteration in original) (quoting Whiting v. Town of West Point, 88 Va. 905, 906 (1892)). “In considering whether a local governing body had authority to enact an ordinance, there is no presumption that it is valid; if no delegation from the legislature can be found to authorize its of error that concern pure questions of law in the absence of a transcript. See, e.g., Marlowe v. Sw. Va. Reg’l Jail Auth., 81 Va. App. 415, 419 n.1 (2024); Wolfe v. Commonwealth, 6 Va. App. 640, 644 (1988); Turner v. Commonwealth, 2 Va. App. 96, 99 (1986). The existing record, including the circuit court’s written rulings, is sufficient to resolve the particular legal issues raised on appeal, notwithstanding the missing transcripts. The City does not challenge these precedents; therefore, we hold that the transcript was not indispensable for this Court’s consideration of the assignment of error under Rule 5A:8. -9- enactment, it is void.” Sinclair v. New Cingular Wireless PCS, LLC, 283 Va. 567, 576 (2012) (citing Marble Techs., Inc., 279 Va. at 416-17). “[I]f there is a reasonable doubt whether legislative power exists, the doubt must be resolved against the local governing body.” Marble Techs., Inc., 279 Va. at 417 (alteration in original) (emphasis added) (quoting Bd. of Supervisors v. Reed’s Landing Corp., 250 Va. 397, 400 (1995)); see also Bragg Hill Corp., 297 Va. at 578 (same); Sinclair, 283 Va. at 576 (same); Richmond v. Confrere Club of Richmond, Inc., 239 Va. 77, 80 (1990) (same). Here, the ordinance enacted by the City retroactively increased the amounts owed by its taxpayers for delinquent real estate tax penalties incurred dating back to May 15, 1992. The City has undoubtedly been “expressly granted,” Marble Techs., Inc., 279 Va. at 417, significant powers of taxation by the Commonwealth. It is authorized to enact local real estate property taxes and to charge penalties and interest thereon. See Powers v. Richmond, 122 Va. 328, 333 (1918); Code §§ 58.1-3915, -3916, -3918. The City’s Charter4 also contains broad language regarding the taxation power—language that the Supreme Court has said “confer[s] upon the city the general power of taxation.” Fallon Florist, Inc. v. Roanoke, 190 Va. 564, 577 (1950). That general power 4 The City’s Charter states that the City “shall have the power,” among other things, to perform the following acts: To raise annually by taxes and assessments in the city such sums of money as the council shall deem necessary to pay the debts and defray the expenses of the city, in such manner as the council shall deem expedient, provided, that such taxes and assessments are not prohibited by the laws of the Commonwealth. In addition to, but not as a limitation upon, this general grant of power the city shall when not prohibited by the laws of the Commonwealth, have power to levy and collect ad valorem taxes on real estate and tangible personal property and machinery and tools and a capitation tax not exceeding one dollar per annum on each resident of the Commonwealth within the limits of the city[.] City of Colonial Heights, Charter § 2.3(b). - 10 - of taxation consists of “the power to levy and impose such taxes as the legislative body of the city may deem necessary for its governmental functions, [] except only as that power is limited by the Constitution and laws of this State and of the United States.” Id. On the other hand, as the City acknowledges, it has not been expressly granted the power to retroactively impose or increase taxes, nor delinquent tax penalties and interest. Therefore, pursuant to the Dillon Rule, we must examine the nature of the retroactively imposed penalties in this case to determine whether the power to impose them can be said to have been “fairly implied from [the City’s] expressly granted powers [of taxation]” or, alternatively, can be said to be “essential and indispensable.” Marble Techs., Inc., 279 Va. at 417. In performing this analysis, we keep in mind that any form of retroactive taxation that is prohibited “by the Constitution and laws of this State [or] of the United States” cannot be said to have been delegated, under the Dillon Rule. Fallon Florist, 190 Va. at 577. A retroactive law has been defined as one that “attaches new legal consequences to events completed before its enactment.” Landgraf v. USI Film Prods., 511 U.S. 244, 270 (1994). In this broad sense, many forms of legislation may be called “retroactive,” changing the present legal effects of acts taken in the past. See Laura Ricciardi and Michael B.W. Sinclair, Retroactive Civil Legislation, 27 U. Tol. L. Rev. 301, 333 (1996) (arguing that “very many, if not all, statutes are retroactive in [this broad] sense,” as “[m]any laws prospective in operation change legal rights and relations that have been established under prior laws”). Taxation laws in particular have a standard retroactive component. Courts have recognized the common legislative practice of revising tax laws during the tax year to which they are applicable, making the changes cover the entire tax year, dating back to January 1. Colonial Pipeline Co. v. Commonwealth, 206 Va. 517, 520-21 (1965) (explaining this common practice and noting that “it is debatable, to say the least, whether a statute enacted” pursuant to this timeline - 11 - “should be classified as ‘retroactive tax legislation’ which has sometimes been condemned by the courts”); United States v. Darusmont, 449 U.S. 292, 296 (1981). Such retroactive effects are not necessarily fatal to tax statutes. See Colonial Pipeline Co., 206 Va. at 520-21; Darusmont, 449 U.S. at 296; see also Welch v. Henry, 305 U.S. 134, 146 (1938) (noting that “a tax is not necessarily unconstitutional because [it is] retroactive . . . .”). That a certain degree of retroactive taxation has come to be accepted does not suggest unlimited permissiveness toward such taxes. See Usery v. Turner Elkhorn Mining Co., 428 U.S. 1, 16 (1976) (“It does not follow, however, that what Congress can legislate prospectively it can legislate retrospectively.”). Basic governmental principles demand careful scrutiny of all retroactive legislation. See Landgraf, 511 U.S. at 265 (“[T]he presumption against retroactive legislation is deeply rooted in our jurisprudence, and embodies a legal doctrine centuries older than our Republic.”); E. Enters. v. Apfel, 524 U.S. 498, 547 (1998) (Kennedy, J., concurring) (“Retrospective laws are, indeed, generally unjust; and, as has been forcibly said, neither accord with sound legislation nor with the fundamental principles of the social compact.” (quoting 2 J. Story, Commentaries on the Constitution § 1398 (1833))); see also Bd. of Supervisors of James Cnty. v. Windmill Meadows, LLC, 287 Va. 170, 180 (2014) (“[I]t is a ‘fundamental principle[] of statutory construction that retroactive laws are not favored, and that a statute is always construed to operate prospectively unless a contrary legislative intent is manifest.’” (quoting Berner v. Mills, 265 Va. 408, 413 (2003))). Courts’ longstanding skepticism of retroactivity follows from such basic principles as the right of citizens to “have an opportunity to know what the law is and to conform their conduct accordingly,” Landgraf, 511 U.S. at 265, and the principle that “settled expectations should not be lightly disrupted,” id. Scrutiny is also demanded due to the particular risks raised by retroactive legislation: that it will be used “as a means of retribution against unpopular groups or individuals.” - 12 - E. Enters., 524 U.S. at 548 (Kennedy, J., concurring) (quoting Landgraf, 511 U.S. at 266). For these reasons, courts must make careful distinctions among different degrees and types of retroactive legislation and invalidate them when they violate established limitations. See Colonial Pipeline Co., 206 Va. at 521 (stating that a retroactive tax statute was “valid if it is not arbitrary and does not disturb vested rights, impair contractual obligations, or violate due process”); United States v. Carlton, 512 U.S. 26, 30 (1994) (equating the constitutional test of arbitrariness with the test of “whether ‘retroactive application is so harsh and oppressive as to transgress the constitutional limitation’” (quoting Welch, 305 U.S. at 147)). The retroactive penalty imposed by the City in this case5 transgresses a key dividing line articulated by the U.S. Supreme Court: the City clearly did not “establish[] only a modest period of retroactivity.” Carlton, 512 U.S. at 32 (emphasis added). Instead, the City established a period of retroactive change dating back to 1992, adjusting the legal status of over thirty years of its citizens’ 5 As a secondary observation, we note that the ordinance does not appear only to be retroactive in the broad sense that is true of almost all legislation. See Landgraf, 511 U.S. at 270; Ricciardi and Sinclair, Retroactive Civil Legislation, at 333. Instead, it appears to be “explicitly retroactive legislation,” Landgraf, 511 U.S. at 268, 278 (emphasis added), a category that the Supreme Court has said describes laws that not only change the legal effects of past transactions but only those that are “enacted to take effect from a time anterior to their passage,” id. (quoting Soc’y for the Propagation of the Gospel v. Wheeler, 2 Gall. 105, 22 F. Cas. 756 (C.C.D.N.H. 1814). In other words, pursuant to the City’s interpretation, the ordinance purports to have been in effect for many years prior to the date in which it was enacted—and, in this way, it can claim to alter the amount that the taxpayers owed in the past. Such an ordinance appears to be of the sort that was considered “retroactive” under the English common law, and violative of basic norms dating back to antiquity. See generally Elmer E. Smead, The Rule Against Retroactive Legislation: A Basic Principle of Jurisprudence, 20 Minn. L. Rev. 775, 775-80 (1936) (tracing the development of the retroactivity principle from Greek and Roman law through English law). As a matter of best and narrowest grounds, we need not consider whether this additional, retroactive feature of the ordinance materially detracts from the likelihood that the City possesses this power under the Dillon Rule. See Heald v. Rappahannock Elec. Coop., 80 Va. App. 53, 72 n.7 (2024) (“[t]he doctrine of judicial restraint dictates that we decide cases ‘on the best and narrowest grounds available’” (alteration in original) (quoting Commonwealth v. Swann, 290 Va. 194, 196 (2015))). We rest our holding solely on the ordinance’s prolonged period of retroactivity. - 13 - delinquent property tax obligations. Even when considered only as applied to the appellees in this case, the period of retroactivity is unusually long. Pursuant to the City’s own interpretation, the August 2024 ordinance would retroactively alter the taxpayers’ delinquent property tax penalties that they previously owed over nine tax years, between the years of 2016 and 2024. The ordinance’s extended period of retroactivity separates the penalties imposed by the City from instances of retroactive taxation approved by our Supreme Court. In Alderson v. Allegheny, 266 Va. 333, 338 (2003), the Supreme Court considered a 2002 statute passed by the General Assembly concerning the tax laws governing the residents of a newly created town; the statute retroactively altered laws only as applicable to the 2001 tax year. Colonial Pipeline involved a statute passed in March 1964 changing the taxable status of a certain company for that same year, retroactive to January 1. 206 Va. at 519-21. In fact, the Colonial Pipeline Court explicitly expressed doubt that such a tax should be characterized as retroactive at all. Id. The period of retroactivity also separates the City’s penalties from those applied in the U.S. Supreme Court cases in which retroactive taxation has been accepted. “In every case in which [the U.S. Supreme Court] ha[s] upheld a retroactive federal tax statute against due process challenge . . . the law applied retroactively for only a relatively short period prior to enactment.” Carlton, 512 U.S. at 38 (O’Connor, J., concurring) (emphasis added). See id. at 27-33 (majority decision) (approving a law passed in 1987 that resulted in the denial of a deduction claimed in taxes filed in December 1986); Welch, 305 U.S. 134 (approving a 1935 law denying deductions for certain dividends incurred in 1933 and 1934); Carlton, 512 U.S. at 38 (O’Connor, J., concurring) (listing the following periods of retroactivity previously approved by the Supreme Court in tax cases: “United States v. Hemme, [476 U.S. 558,] 562 [1986] (1 month); . . . Darusmont, supra, at 294-295 (10 months); United States v. Hudson, 299 U.S. 498, 501 . . . (1937) (1 month)”). - 14 -  Considering these precedents, we hold that the ordinance’s prolonged period of retroactivity constitutes a divergence from basic ex post facto principles to an extent that raises serious questions about its constitutionality. See Carlton, 512 U.S. at 32. In rendering this holding, we do not question the power of the state to exercise its authority in enacting changes to tax laws with modest retroactive effect, pursuant to its longstanding practice, see Colonial Pipeline Co., 206 Va. at 520-21; Darusmont, 449 U.S. at 296, nor its ability to enact such changes to accommodate unusual circumstances such as changed locality status. See Alderson, 266 Va. at 338. But in purporting to alter the legally chargeable rate applicable to nine years of its citizens’ previously assessed tax obligations, the City’s ordinance stepped far afield of the normal realm of accepted retroactivity. Even if performed by an entity uninhibited by the Dillon Rule, such as the Commonwealth itself, such an action would be subject to serious constitutional challenge. See Carlton, 512 U.S. at 34 (majority opinion) (distinguishing the retroactive tax it deemed constitutional from that imposed in Nichols v. Coolidge, 274 U.S. 531 (1927), on the basis that “Nichols involved a novel development in the estate tax which embraced a transfer that occurred 12 years earlier” (emphasis added)); id. at 38 (O’Connor, J., concurring) (“A period of retroactivity longer than the year preceding the legislative session in which the law was enacted would raise, in my view, serious constitutional questions.”). This holding, while not definitively resolving the ability of the Commonwealth to impose such a retroactive burden, grounds our necessary Dillon Rule analysis. The General Assembly only grants the taxation power that it itself constitutionally possesses. See Fallon Florist, 190 Va. at 577. The above analysis demonstrates eminently reasonable doubts that the state itself could constitutionally impose such a retroactive burden. As such, there is reasonable doubt as to whether the City has been impliedly delegated the power to impose the prolonged, “[im]modest” period of retroactively increased delinquent tax penalties at issue in this case. Carlton, 512 U.S. at 38. That - 15 - “reasonable doubt” must be resolved against the locality. See Marble Techs., Inc., 279 Va. at 417 (quoting Reed’s Landing Corp., 250 Va. at 400). Therefore, we cannot conclude that such a power is essential and indispensable or fairly implied from the taxing powers expressly granted to the City. Id. (quoting Bd. of Zoning Appeals, 276 Va. at 554). The state can only confer to a municipality those powers that the state constitutionally possesses and retains itself. See Fallon Florist, 190 Va. at 577. Under the Dillion Rule, if there is reasonable doubt as to whether the state has the power to tax its citizens retroactively, then that same doubt remains regarding whether the municipality has such taxation power. See Marble Techs., Inc., 279 Va. at 417. Here, the Commonwealth does not have the power to set retroactive taxes back years and years. The retroactive case law we can rely on from this Court, the Virginia Supreme Court, and the United States Supreme Court allows retroactive taxes to apply only to the one year in which the taxation rates were changed.6 See Colonial Pipeline Co., 206 Va. at 520-21; Bd. of Supervisors of James Cnty., 287 Va. at 180; Berner, 265 Va. at 413. The only retroactivity allowed in this case would be dating back to January 1, 2024.7 See Colonial Pipeline Co., 206 Va. at 520-21. 6 The United States Supreme Court has explicitly said that a long period of retroactivity would raise serious constitutional issues. See Usery, 428 U.S. at 16; Landgraf, 511 U.S. at 265; E. Enters., 524 U.S. at 547 (Kennedy, J., concurring) (“Retrospective laws are, indeed, generally unjust.”). 7 This is to say nothing of the fact that the ordinance retroactively increases penalties already incurred, invoking a taxation power that is nowhere mentioned in Code § 58.1-3916. No degree of retroactive imposition of penalties has been deemed appropriate. Such a power is not lightly read into a general grant of authority. For instance, retroactive imposition of criminal penalties is squarely prohibited by the Constitution. See Kitze v. Commonwealth, 23 Va. App. 213, 216 (1996). The question then is whether the statutory power to prescribe penalties for nonpayment necessarily includes or fairly implies the power to increase liabilities retroactively. On that score, there is at least reasonable doubt about the scope of the delegation, which must be resolved against the City under the Dillon Rule, as discussed. - 16 -  Like the circuit court, we recognize that we need not decide in this case whether the state itself could impose a tax with this degree of retroactive operation. See Heald v. Rappahannock Elec. Coop., 80 Va. App. 53, 72 n.7 (2024) (“[t]he doctrine of judicial restraint dictates that we decide cases ‘on the best and narrowest grounds available’” (alteration in original) (quoting Commonwealth v. Swann, 290 Va. 194, 196 (2015))). Instead, our ruling concerns only the limited powers of the locality as commanded by the Dillon Rule. We affirm the circuit court’s holding8 that the ordinance was invalid insofar as it is applied retroactively. III. Attorney Fees In its assignment of cross-error, the taxpayers challenge the circuit court’s ruling denying attorney fees. The court denied the taxpayers attorney fees after issuing an order compelling responses to the property owners’ discovery requests. Under Rule 4:12, a court must award attorney fees after such an order “unless the court finds that the opposition to the motion was substantially justified or that other circumstances make an award of expenses unjust.” Here, the circuit court found that such a grant would be unjust due to the “circumstances of this case,” including “the opportunities to . . . obtain the information [of] the Respondent” and “the timing of all this.” This Court “review[s] the circuit court’s decision to award attorney fees for an abuse of discretion.” Piney Meeting House Invs., Inc. v. Hart, 284 Va. 187, 196 (2012). “An abuse of discretion occurs only when reasonable jurists could not differ as to the 8 In its letter opinion, the circuit court reached the same conclusion as we do, and on the basis of the Dillon Rule. The circuit court did apply some canons of construction in reaching this same conclusion we do not find necessary to include in our analysis. This fact does not affect our holding. See Vandyke v. Commonwealth, 71 Va. App. 723, 731 (2020) (“Under the right- result-different-reason principle, an appellate court ‘do[es] not hesitate, in a proper case, where the correct conclusion has been reached but [a different] reason [is] given, to sustain the result [on an alternative] ground.’” (alterations in original) (quoting Banks v. Commonwealth, 280 Va. 612, 617 (2010))). - 17 - proper decision.” Wynnycky v. Kozel, 71 Va. App. 177, 193 (2019) (quoting Reston Hosp. Ctr., LLC v. Remley, 63 Va. App. 755, 764 (2014)). The taxpayers identify several instances in which they say