Can I appeal a county's business tangible personal property tax assessment directly to the Virginia Department of Taxation without first appealing to the county?

Plain-English summary

A county assessed 2018 business tangible personal property tax on a vehicle owned by an out-of-state business because the county believed the vehicle was garaged there. The business argued that the vehicle was instead garaged at its State A headquarters and took the dispute directly to the Virginia Department of Taxation.

The Department did not reach the vehicle's actual situs. Va. Code § 58.1-3983.1 requires a taxpayer to begin by filing an administrative appeal with the commissioner of the revenue or other local assessing official. The locality must fully review the claims and issue a written final determination explaining its facts and analysis. Only then may the taxpayer appeal disputed conclusions to the Department.

There is a limited alternative when a properly filed local appeal has remained pending for more than one year: the taxpayer may appeal to the Department after giving the locality at least 30 days' written notice. Neither route was available here because the taxpayer had not first appealed to the county. The Department therefore issued a notice that it lacked jurisdiction and directed the taxpayer to use the local appeal process.

What this means for you

Businesses disputing a locally assessed vehicle or other tangible property

Start with the locality that issued the assessment. A direct filing with the Department will be dismissed even if your underlying situs argument may have merit.

Taxpayers waiting on a local decision

If a proper local appeal has been pending more than one year, the statute permits a Department appeal after at least 30 days' written notice to the locality.

Preserving appeal rights

The ruling states that a local BTPP appeal must be filed within one year from the last day of the tax year assessed or one year from the assessment date, whichever is later.

Common questions

Q: Did the Department decide where the vehicle was actually garaged?
A: No. It dismissed for lack of jurisdiction before reaching that factual issue.

Q: What must happen before a normal Department appeal?
A: The taxpayer must file locally and receive a written final local determination.

Q: What if the locality does not decide the appeal for more than a year?
A: The taxpayer may file with the Department after giving the locality at least 30 days' written notice of that intent.

Citations and references

• Va. Code § 58.1-3983.1 B 1 -- local appeal deadline and first-level procedure
• Va. Code § 58.1-3983.1 B 6 -- Department appeal after a local appeal remains pending over one year
• Va. Code § 58.1-3983.1 D -- appeal following a final local determination
• P.D. 04-28 (6/25/2004) -- Guidelines for Appealing Local Business Taxes

Subject

Tangible: Appeals - No Local Appeal Filed

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 19-120

Original ruling text

October 4, 2019

Re: Notice of Jurisdiction

Taxpayer: *

Locality Assessing Tax: *

Business Tangible Personal Property (BTPP) Tax

Dear *:

This notice of jurisdiction is issued upon the administrative appeal filed by * (the “Taxpayer”) with the Department of Taxation. The Taxpayer seeks correction of an assessment of business tangible personal property (BTPP) tax issued by the *** (the “County”) for the 2018 tax year.

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 online in the Laws, Rules and Decisions section of the Department’s website, located at www.tax.virginia.gov .

FACTS

The County issued an assessment of personal property tax to the Taxpayer, a * (“State A”) business, for a vehicle the County believed was garaged in its jurisdiction. The Taxpayer appealed to the Department, contending the vehicle was garaged at its headquarters in State A.

ANALYSIS

A taxpayer assessed with BTPP tax may appeal such assessment within one year from the last day of the tax year for which such assessment is made, or within one year from the date of the assessment, whichever is later, to the commissioner of the revenue or other local assessing official. See Virginia Code § 58.1-3983.1 B 1. If a taxpayer wishes to appeal an assessment from a locality to the Department, it must first file a local administrative appeal pursuant to the process set forth in Virginia Code § 58.1-3983.1 B. Once a proper local appeal has been filed, the locality must undertake a full review of the taxpayer’s claims and issue a written determination setting forth the facts and analysis in support of the locality’s decision. Only when a final local determination has been issued can a taxpayer file an administrative appeal with the Department, if it wishes to contest any of the locality’s conclusions. See Virginia Code 58.1-3983.1 D. Alternatively, a taxpayer may file an appeal with the Department if its appeal with the locality has been pending for more than one year and it provides the locality with at least 30 days written notice. See Virginia Code § 58.1-3983.1 B 6.

DETERMINATION

Because the Taxpayer did not appeal the assessment to the County first, the Department lacks jurisdiction to decide the Taxpayer’s appeal. The Taxpayer should review the appeals and rulings procedures described in Virginia Code § 58.1-3983.1 and the Guidelines for Appealing Local Business Taxes (the “Guidelines”), issued as Public Document (P.D.) 04-28 (6/25/2004). If the Taxpayer wishes to dispute the assessment, it must first file an appeal with the County. Once the County issues its final determination, the Taxpayer may file an appeal with the Department if it still disagrees with the outcome. Alternatively, the Taxpayer may file an appeal with the Department if its appeal with the locality has been pending for more than one year, provided the Taxpayer gives 30 days written notice to the County of its intent to file an appeal with the Department. The Taxpayer should review the appeals and rulings procedures described in Virginia Code § 58.1-3983.1 and the Guidelines.

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

Sincerely,

Craig M. Burns

Tax Commissioner

AR/2129.M

Related Documents

04-28