My motorcycle was garaged in another state, so I don't think the city should be able to tax it as personal property -- can I appeal that to the Virginia Department of Taxation?

Plain-English summary

A taxpayer who'd purchased a motorcycle in Virginia received tangible personal property tax assessments from a city covering the 2016 through 2020 tax years. He appealed to the Virginia Department of Taxation, arguing the motorcycle was actually garaged in another state during those years and therefore shouldn't have been subject to Virginia local property tax at all -- essentially a dispute about where the vehicle's taxable "situs" really was.

As in the companion rulings the Department issued around the same time for personal cars (P.D. 22-147 and P.D. 22-148), the Department explained it simply doesn't have jurisdiction to referee this kind of dispute, whatever the merits of the situs argument might be. Virginia law limits the Department's appellate authority over local tax matters to two specific categories: local BUSINESS taxes (the machinery and tools tax, business tangible personal property tax, merchant's capital tax, and consumer utility tax) and local MOBILE property taxes (which cover things like airplanes, boats, campers, recreational vehicles, and trailers). A personal motorcycle -- bought and used for personal, non-business purposes -- doesn't fit into either category, so the Department has no authority to decide whether the city was right or wrong to tax it.

Because it lacked jurisdiction, the Department couldn't weigh in on the taxpayer's out-of-state-garaging argument at all. It pointed him instead to the two paths that do exist: applying directly to the city for a correction under Va. Code § 58.1-3980, or, if unresolved, appealing to circuit court under Va. Code § 58.1-3984.

What this means for you

Motorcycle, car, or other personal-vehicle owners disputing where their vehicle should be taxed

Don't send a situs or valuation dispute over a personal vehicle to the Virginia Department of Taxation -- it has no jurisdiction over these disputes, regardless of the underlying facts. Take it up directly with the locality (the city or county's Commissioner of the Revenue or equivalent official) under Va. Code § 58.1-3980, and escalate to circuit court under Va. Code § 58.1-3984 if needed.

Anyone trying to figure out whether a vehicle qualifies as "mobile property" for Department appeal purposes

Virginia's "mobile property" category for Department jurisdiction specifically covers airplanes, boats, campers, recreational vehicles, and trailers -- not everyday personal cars or motorcycles. If your vehicle isn't in one of those specific categories (or a business use), the Department won't have jurisdiction over a related tax dispute.

Common questions

Q: I think my motorcycle (or car) was wrongly taxed because it was actually kept in another state -- can the Virginia Department of Taxation resolve that?
A: No. Disputes about where a personal vehicle should be taxed fall outside the Department's statutory jurisdiction, which is limited to local business taxes and local mobile property taxes (airplanes, boats, campers, RVs, and trailers). You'll need to take a personal-vehicle situs dispute to the locality directly, and then to circuit court if necessary.

Q: What counts as a "mobile property tax" that the Department CAN review?
A: Under Va. Code § 58.1-3983.1(A), local mobile property taxes cover tangible personal property tax on airplanes, boats, campers, recreational vehicles, and trailers -- not ordinary personal cars or motorcycles.

Q: Is this consistent with how the Department handles personal car tax disputes?
A: Yes -- this ruling follows the same jurisdictional rule the Department applied the same month in P.D. 22-147 and P.D. 22-148, which addressed personal car valuation disputes rather than a motorcycle's out-of-state situs, reaching the identical jurisdictional conclusion.

Citations and references

• Va. Code § 58.1-3983.1(D) (Department's jurisdiction limited to local business and mobile property tax assessments)
• Va. Code § 58.1-3983.1(A) (defines local business taxes: machinery and tools, business tangible personal property, merchant's capital, consumer utility taxes)
• Va. Code § 58.1-3980 (local correction request procedure)
• Va. Code § 58.1-3984 (circuit court appeal of local tax assessments)
• P.D. 17-142 (8/7/2017) and P.D. 18-205 (12/10/2018) (Department's jurisdiction doesn't extend to personal, non-business property tax assessments)

Subject

Property Tax: Jurisdiction: Personal Vehicles - Motorcycle

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 22-139

Original ruling text

September 20, 2022

Re: Appeal of Personal Property Tax Assessment

Taxpayer: *

Local Tangible Personal Property Tax

Dear *:

This notice of jurisdiction is issued upon the application for correction filed by * (the “Taxpayer”) with the Department of Taxation. The Taxpayer seeks correction of assessments of tangible personal property tax for property he purchased in the *** (the “City”) for the 2016 through 2020 tax years.

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

FACTS

The Taxpayer, purchased a motorcycle in Virginia. Subsequently, assessments of unpaid personal property tax were issued to the Taxpayer. The Taxpayer appeals, contending the vehicle was garaged in * (State A) during the tax years at issue and thus was not subject to tax in Virginia.

ANALYSIS

Under Virginia Code § 58.1-3983.1 D, the Department’s jurisdiction is limited to appeals from final local determinations concerning local business and mobile property tax assessments. See Public Document (P.D.) 17-142 (8/7/2017) and P.D. 18-205 (12/10/2018). Local business taxes include the machinery and tools tax, business tangible personal property tax, merchant's capital tax, and consumer utility tax. See Virginia Code § 58.1-3983.1 A. Local mobile property taxes include the tangible personal property tax on airplanes, boats, campers, recreational vehicles, and trailers. Neither business nor mobile property taxes include tangible personal property tax assessed on a motorcycle purchased for personal use.

DETERMINATION

An assessment of tangible personal property tax on a motorcycle purchased for personal use is not an assessment over which the Department has jurisdiction to hear an appeal. The Taxpayer may appeal an assessment of tangible personal property tax directly to the locality pursuant to Virginia Code § 58.1-3980 or to the circuit court under the provisions of Virginia Code § 58.1-3984.

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/4164.Y

Related Documents

17-142

18-205