My county's taxpayer-services team emailed me a denial of my BPOL penalty waiver request — does that email count as a final determination I can appeal to the Virginia Tax Commissioner?

Plain-English summary

A retail business in a Virginia county paid its 2024 BPOL tax after the due date and was assessed a late-payment penalty and interest. Rather than filing a formal local appeal, the business emailed the county's general taxpayer-services inbox asking that the assessment be waived. A team member replied that the county's policy required mailed payments to be postmarked by the due date, so the waiver was denied. The business asked whether that reply was the county's "final determination"; the same team member simply repeated that the charge couldn't be waived. The business then appealed to the Department, arguing under Va. Code § 58.1-3703.1 A 2 d that it had acted responsibly and the delay was beyond its control.

No jurisdiction over a penalty-and-interest-only dispute. As in related BPOL rulings, the Department explained that Va. Code § 58.1-3703.1 A 5 only allows an administrative appeal for an "appealable event" — a genuine dispute over the AMOUNT of tax owed (an increase in assessed tax, a denied refund, a first-time assessment, or a classification dispute). Because the county here assessed only penalty and interest for a late payment, with the underlying BPOL tax itself never in question, there was no appealable event, and the local (and Department) appeal process doesn't reach it.

A second, independent defect: no proper appeal chain existed anyway. Even if the law did reach penalty-only disputes, the Department found the taxpayer never actually completed the required steps. Under § 58.1-3703.1 A 6 a, a taxpayer can appeal to the Department only after the LOCALITY has issued a proper final local determination, following a proper local appeal filed with the assessing official (citing P.D. 11-124). Here, the taxpayer's email asking whether the denial was "final" wasn't a substitute for filing a real local appeal — and the county's email reply wasn't a valid final local determination either, since 23 VAC 10-500-710 requires specific content and a signature from the local assessing official or their designee, neither of which an informal email from a general inbox satisfies. The Department specifically cautioned that email's informality and anonymity make it poorly suited to administrative tax appeals and determinations (citing P.D. 20-178).

On the merits, the same rules apply as always. Penalty waivers remain entirely within the locality's own discretion and aren't subject to Department review, while interest cannot be waived under any circumstances.

What this means for you

Businesses disputing a late BPOL payment

Don't rely on an email exchange with a general taxpayer-services inbox as your appeal. If you want your dispute properly reviewed, file a real administrative appeal with the locality's actual assessing official, and make sure any denial you receive is a signed final determination containing the content the regulations require — not an informal email reply.

When emails aren't enough

This ruling is a reminder that Virginia's local tax appeal process has real procedural requirements at every step. An email thread, however substantive, doesn't automatically create the appeal record needed to escalate a dispute — whether to the Department or beyond.

Accountants and tax professionals

If a client's local tax dispute was handled entirely by email, check whether both the local appeal AND the locality's final determination actually met the formal requirements (a real appeal filed with the assessing official; a signed determination with the regulatory required content) before assuming an appeal to the Department is procedurally sound.

Common questions

Q: Does an email from my county's tax department count as a final determination I can appeal?
A: Not necessarily. Virginia regulation 23 VAC 10-500-710 requires a final local BPOL determination to be signed by the local assessing official (or their designee) and contain specific required language — an informal email reply from a general taxpayer-services inbox generally won't meet that standard.

Q: If my dispute is only about penalty and interest, does it matter whether my local appeal was proper?
A: The jurisdiction problem exists either way — the Department has no authority to hear penalty-and-interest-only disputes regardless of how the local appeal was handled. But a defective local appeal chain is a second, independent reason the Department can't act.

Q: What should I do instead of emailing a general inbox?
A: File a formal administrative appeal with the locality's actual commissioner of the revenue or other assessing official, and request a signed final determination if you plan to escalate further.

Q: Can the locality still waive my penalty even without a formal appeal?
A: Yes — penalty waivers are entirely within the locality's discretion, and it may grant one informally. But if it denies the request, a proper administrative appeal is what's needed to preserve further review (subject to the jurisdiction limits above).

Citations and references

Statutes and regulations:

• Va. Code § 58.1-3703.1 A 5 — defines an "appealable event" for a local BPOL appeal
• Va. Code § 58.1-3700.1 — defines "assessment"
• Va. Code § 58.1-3703.1 A 6 a — a Department appeal requires a proper prior final local determination
• 23 VAC 10-500-710 — required content and signature for a final local BPOL determination
• Va. Code § 58.1-3703.1 A 2 d — 10% late-payment penalty; excused only if the taxpayer acted responsibly and the failure was beyond its control
• P.D. 11-124 (7/1/2011); P.D. 20-178 (10/7/2020) — email is generally unsuited to formal local tax appeals and determinations
• P.D. 20-3 (1/7/2020); P.D. 20-18 (2/6/2020) — penalty waivers are a locality's own discretionary call

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 25-11

Original ruling text

January 10, 2025

Re: Notice of Jurisdiction

Taxpayer: *

Locality Assessing Tax: County of *

Business, Professional, and Occupational License Tax

Dear *:

This notice of jurisdiction is issued upon the application for correction filed by you on behalf of * (the “Taxpayer”) with the Department of Taxation. The Taxpayer requests a waiver of penalty and interest assessed by the County of *** (the “County”) for late payment of Business, Professional, and Occupational License (BPOL) tax for the 2024 tax year.

The following determination is based on the facts presented to the Department summarized below. The Code of Virginia sections and regulations cited are available online at law.lis.virginia.gov. The public documents cited are available at tax.virginia.gov in the Laws, Rules, & Decisions section of the Department’s website.

FACTS

The Taxpayer operated a retail business in the County. When the Taxpayer filed its 2024 BPOL tax return and paid the tax due after the due date, the County issued an assessment for late payment penalty and interest.

The Taxpayer sent an electronic mail communication to the County’s taxpayer services team’s electronic mail inbox, requesting that the assessment be waived. A member of that team replied that the assessment would not be waived based on the County’s policy that mailed payments must be postmarked on or before the due date of the return to be considered timely. The Taxpayer replied, asking if that was the County’s final determination. The same taxpayer services team member replied that the charge could not be waived. The Taxpayer then appealed to the Department, contending that the late payment penalty and interest should be waived pursuant to Virginia Code § 58.1-3703.1 A 2 d because the Taxpayer acted responsibly, and the failure was due to events beyond its control.

ANALYSIS

Local Appeals Process

Virginia Code § 58.1-3703.1 A 5 provides that any person assessed with a local license tax as a result of an appealable event may file an administrative appeal of the 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 appealable event, whichever is later, with the commissioner of the revenue or other local assessing official. An appealable event is an increase in the assessment of a local license tax payable by the taxpayer, the denial of a refund, or the assessment of a local license tax where none previously was assessed. An appealable event also includes a taxpayer’s appeal of a classification, regardless of whether it is in conjunction with an assessment, examination, audit, or any other action taken by the locality.

In addition, “assessment” is defined in relevant part as “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.” See Virginia Code § 58.1-3700.1. See also Title 23 of the Virginia Administrative Code (VAC) 10-500-10.

In this case, the County assessed penalty and interest only for a late payment of tax. The statute and regulations provide for administrative appeals of local tax assessments resulting from appealable events. Taking the definitions of appealable event and assessment together, an administrative appeal must involve a dispute as the actual amount of tax owed. As such, the local appeals process provided by Virginia Code § 58.1-3703.1 A 5 does not apply to assessments of penalty and interest only.

Even if the local appeals process applied to assessments of penalty and interest only, if the Taxpayer disagreed with the denial of its waiver request, its next step would have been to file an appeal with the County’s local assessing official pursuant to Virginia Code § 58.1-3703.1 A 5. The Taxpayer’s electronic mail communication to the County’s general taxpayer services team’s inbox asking whether the denial represented the County’s final determination was not a substitute for a complete local appeal.

Further, under Virginia Code § 58.1-3703.1 A 6 a, a taxpayer may file an appeal with the Department only after a final determination that met all the requirements of Title 23 VAC 10-500-710 has been issued by a locality. See P.D. 11-124 (7/1/2011). An electronic mail from a member of the County’s taxpayer services team does not meet the requirements for a final local determination which must, among other requirements, be signed by the local assessing official or their designee. Further, Title 23 VAC 10-500-710 contains specific language that must be included in any final written determination for a BPOL tax appeal. This language was not included in the County’s electronic mail. The Department cautions localities and taxpayers that the anonymity and informality of electronic mail is generally ill-suited to administrative appeals and determinations with respect to local tax issues. See, for example, P.D. 20-178 (10/7/2020).

Penalty Waiver

Virginia Code § 58.1-3703.1 A 2 d provides that a penalty of 10% may be assessed for the failure to pay the BPOL tax by the appropriate due date. However, no late payment penalty may be assessed if the failure to pay was not the fault of the taxpayer. In order to demonstrate lack of fault, the taxpayer must show that they acted responsibly, and that the failure was due to events beyond their control.

The determination as to whether the Taxpayer acted responsibly, and whether the late payment of the BPOL tax was due to events beyond its control, are matters of fact to be determined by the County. Even if a locality determined that the late payment of BPOL tax was not due to events beyond a taxpayer’s control, it still may waive the penalty at its discretion. See P.D. 20-3 (1/7/2020). Waivers of BPOL tax penalties are subject to the review and discretion of the locality and are not subject to administrative review by the Department. See P.D. 20-3 and P.D. 20-18 (2/6/2020).

DETERMINATION

As discussed above, the local administrative appeals process provided by Virginia Code § 58.1-3703.1 A requires a dispute as to the amount of BPOL tax for which a taxpayer is ultimately liable. The Department does not have jurisdiction when the disputed assessment is only for penalties and interest. Even if the Department had jurisdiction, it does not appear that a proper local appeal was filed with the County or that the County issued a proper final local determination. Accordingly, the Department does not have jurisdiction to decide the Taxpayer’s appeal on the merits.

If you have any questions regarding this determination, you may contact * in the Office of Tax Policy and Legal Affairs, Tax Adjudication and Resolution Division, at or **@tax.virginia.gov.

Sincerely,

James J. Alex

Tax Commissioner

Commonwealth of Virginia

Related Documents

11-124

20-3

20-18

20-178