Could Virginia's Department of Taxation review a county's refusal to waive mobile-property-tax penalties and interest?

Subject

Local Mobile Property Tax

Plain-English summary

Owners of a travel trailer accepted the county's mobile-property-tax assessments for 2013 through 2015 but asked to remove penalties and interest because they said they never received the bills. The county treasurer denied the request, and they appealed to the Virginia Department of Taxation.

The Department found that it lacked jurisdiction. Va. Code § 58.1-3983.1 and the Department's guidelines allow an administrative appeal when the taxpayer disputes the proper tax rate, tax base, or ultimate amount of local mobile property tax.

These taxpayers disputed only penalties and interest. Under Va. Code § 58.1-3916, the local treasurer determines fault for failure to pay, and that statute did not authorize the Department to review the locality's finding.

Citations and references

• Va. Code §§ 58.1-3983.1 and 58.1-3916.
• P.D. 05-81, 2005 Guidelines for Appealing Local Mobile Property Taxes.

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 16-65

Original ruling text

April 29, 2016

Re: Taxpayers: *
Locality Assessing Tax: ***
Local Mobile Property Tax

Dear *:

This notice of jurisdiction is issued upon the application for correction filed by * (the "Taxpayers"), with the Department. The Taxpayers seek an abatement of the penalties and interest included with the assessments of local mobile property tax issued to them by the *** (the "County") for the 2013 through 2015 tax years.

The following determination is based on the facts presented to the Department summarized below. The Code of Virginia sections and public document cited are available on-line in the Laws, Rules and Decisions section of the Department's web site, located at www.tax.virginia.gov .

FACTS

The Taxpayers owned a travel trailer that was garaged in the County. After the County discovered that the Taxpayers had not paid local mobile property tax on the trailer for the 2013 through 2015 tax years, the County issued assessments. The Taxpayers requested that the County's Treasurer abate the penalties and interest included with the assessments. The Taxpayers' request was denied. The Taxpayers appealed to the Department, contending that they never received the local mobile property tax bills from the County even though the Application for Certificate of Title and Registration filed with the Virginia Department of Motor Vehicles (DMV) listed the County as the jurisdiction in which the trailer was principally garaged.

ANALYSIS

Virginia Code § 58.1-3983.1 permits taxpayers who believe they are erroneously assessed for local mobile taxes the option of using the administrative appeals process when seeking correction of an assessment. Although the term "assessment" is not defined in the Code of Virginia for purposes of Va. Code § 58.1-3983.1, it is defined in the Department's 2005 Guidelines for Appealing Local Mobile Property Taxes, issued as Public Document (P.D.) 05-81 (6/9/2005) (the "Guidelines"). Under § 4 of the Guidelines, “’[a]ssessment’ means a determination as to the proper rate of tax, the measure to which the tax rate is applied, and ultimately the amount of tax, including additional or omitted tax, that is due." As such, the administrative appeals process involving a local mobile property tax requires a dispute as to the ultimate amount of such tax. In this case, the Taxpayers did not dispute the amount of tax due. Rather, they requested a waiver of the included penalties and interest.

Under Va. Code § 58.1-3916, penalty and interest for failure to file a local tax return or pay a local tax may not be imposed when such failure was not the fault of the taxpayer, or was the fault of the commissioner of revenue or the treasurer, as the case may be. This statute also grants the treasurer the power to make determinations of fault relating exclusively to failure to pay a tax. Determinations of fault relating exclusively to failure to file a return are reserved for the local commissioner of the revenue. In localities that do not have a treasurer or commissioner of the revenue, the local governing body may delegate the responsibility to make such determinations to the appropriate local taxing official. V irginia Code § 58.1-3916, however, does not authorize the Department to review the locality's finding of fault.

DETERMINATION

The administrative appeals process for a local mobile property tax requires a dispute as to the ultimate amount of such tax. In this case, the Taxpayers did not dispute the amount of local mobile property tax due. Rather, they requested a waiver of penalties and interest from the locality. As such, the Taxpayers' request was not eligible for the administrative appeals process, which include administrative appeals to the Department, under Va. Code § 58.1-3983.1.

If you have any questions regarding this response, you may contact * in the Office of Tax Policy, Appeals and Rulings, at ***.

Sincerely,

Craig M. Burns
Tax Commissioner

AR/1-6281410267.M