My business was assessed local business personal property tax on equipment I say was never located in that county. How do I appeal, and does the county have to consider my evidence?

Plain-English summary

A technology-services corporation leased space at a data center in a Virginia county starting in 2018. It later noticed that some equipment had been reported on business tangible personal property (BTPP) tax returns in a neighboring locality (where it had an office) by mistake, so it filed an original 2023 BTPP return in the data-center county to report those assets there. Working from that asset list, the county then issued BTPP assessments for 2020, 2021, and 2022 too. The company then realized some of those same assets had never actually been located in the county at all, and appealed. The county upheld the assessments; the company appealed to the Department, which remanded the case back to the county for further consideration.

Who taxes this — and who hears the appeal. BTPP tax is a local tax, imposed and administered by the locality's commissioner of the revenue. Virginia's Constitution reserves tangible personal property for local taxation (Art. X, § 4; Va. Code § 58.1-1100 et seq.). But the state Tax Commissioner has a defined role: § 58.1-3983.1 D lets the Department decide appeals of local BTPP assessments after the taxpayer first appeals to the locality. On such an appeal, the local assessment is prima facie correct — it stands unless the taxpayer proves it wrong (§ 58.1-3983.1 B 4).

Where property is taxed. Tangible personal property is taxed by the locality where it is located on the "tax day" (§ 58.1-3511 A), which is generally January 1 (§ 58.1-3515). So the whole dispute turned on where the equipment actually was on each year's tax day — and the local commissioner may require records to make an accurate assessment (§ 58.1-3109 6).

The key distinction: "never here" vs. "disposed of." Normally, if a taxpayer says an item is no longer on its premises, it must document when it disposed of the property. But this company's argument was different — that the assets were never located in the county in the first place, which would make proof of disposition irrelevant. The company backed this with a sworn affidavit from its representative stating (1) the disputed property was never located in the county and (2) an attached listing accurately showed what was located there each year, all based on a review of its internal asset-tracking and accounting records.

Why the Department remanded. The Commissioner reaffirmed that when a taxpayer's records are incomplete and the locality's basis is reasonable, the local assessment is prima facie correct — and here it was reasonable for the county to rely on the company's own original 2023 asset list. But a locality must consider all the evidence a taxpayer presents. Because the affidavit had never been put in front of the county (it first surfaced on the appeal to the Department), the county had had no chance to evaluate it. Treating the affidavit, absent contrary evidence, as a good-faith effort, the Department sent the case back so the county could weigh it. The company must give the county a more detailed explanation of how its internal records support the affidavit within 60 days; the county must then issue a revised final determination, which the company can appeal to the Department again within 90 days.

What this means for you

Businesses assessed local business personal property tax

BTPP is administered by your locality, not the state — so you appeal to the locality first, and only then can you bring a business-property appeal to the Department under § 58.1-3983.1. The assessment is presumed correct, so the burden is on you to prove where your property actually was on each January 1 tax day. Keep asset-tracking records that tie specific equipment to specific locations and dates; a company's own filings can be used against it, as the original 2023 return was here.

"Never here" vs. "disposed of" — and why it matters

If property left the county, you generally must show when you disposed of it. But if the property was never located in the county at all, disposition is beside the point — you instead have to prove the asset was never there. Frame your argument correctly, because the required evidence differs. A detailed affidavit supported by internal asset records can be a legitimate way to make the "never here" showing.

Tax preparers

Two practical lessons. First, put your evidence in front of the locality before appealing to the Department — new evidence raised for the first time on the state appeal is likely to trigger a remand rather than an immediate win, because the locality is entitled to evaluate it. Second, a sworn affidavit grounded in the client's asset records is treated as a good-faith effort the locality must actually weigh, but expect to back it with a detailed explanation of the underlying records.

Common questions

Q: Who assesses business tangible personal property tax, and where do I appeal?
A: It is a local tax administered by your locality's commissioner of the revenue. You appeal to the locality first; the state Tax Commissioner can then hear an appeal of a local BTPP assessment under § 58.1-3983.1 D.

Q: The county taxed equipment that was never in the county. What do I have to prove?
A: Where your property was located on the January 1 tax day (§ 58.1-3511, § 58.1-3515). If it was never in the county, you don't need to prove disposition — you need to prove the assets were never located there. The assessment is presumed correct, so the burden is on you.

Q: I have an affidavit and internal records. Is that enough to win?
A: It can be a good-faith showing the locality must consider, but not an automatic win. Here the Department remanded so the county could evaluate the affidavit, and required the company to give a more detailed explanation of how its records support it. Present that evidence to the locality, not for the first time on a state appeal.

Q: What happens after a remand?
A: The locality reviews the new evidence and issues a revised final determination. If you still disagree, you have 90 days to appeal that revised determination to the Department.

Citations and references

Statutes and constitutional provision:

• Article X, § 4, Constitution of Virginia; Va. Code § 58.1-1100 et seq. — tangible personal property reserved for local taxation
• Va. Code § 58.1-3983.1 D — Department's authority to decide local BTPP appeals
• Va. Code § 58.1-3983.1 B 4 — taxpayer's burden to prove it properly reported value
• Va. Code § 58.1-3511 A — situs of tangible personal property (locality where located on the tax day)
• Va. Code § 58.1-3515 — tax day generally January 1
• Va. Code § 58.1-3109 6 — local commissioner may require records to make an accurate assessment

Authorities the Commissioner relied on (described here, not linked): prior Department public documents on the taxpayer's burden and on evaluating taxpayer evidence in BTPP appeals, including one treating a taxpayer affidavit as a good-faith effort the locality must consider (P.D. 08-88, 11-54, 12-160, 22-29, and 24-91).

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 25-110

Original ruling text

November 7, 2025

Re: Appeal of Final Local Determination
Taxpayer: *
Locality Assessing Tax: ***
Business Tangible Personal Property Tax

Dear *:

This final state determination is issued upon the administrative appeal filed by you on behalf of your client, * (the “Taxpayer”), with the Department of Taxation. You appeal the assessments of business tangible personal property (BTPP) tax issued to the Taxpayer by the County of ** (the “County”) for the 2020 through 2023 tax years.

The BTPP tax is imposed and administered by local officials. Virginia Code § 58.1-3983.1 D authorizes the Department to issue determinations on taxpayer appeals of BTPP tax assessments. On appeal, a BTPP tax assessment is deemed prima facie correct, i.e., the local assessment will stand unless the taxpayer proves that it is incorrect.

The following determination is based on the facts presented to the Department summarized below. The Code of Virginia sections 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 was a corporation that provided technology and related services. In March 2018, the Taxpayer began leasing space at a data center located in the County. After discovering that certain assets had mistakenly been reported on BTPP returns filed in a neighboring locality where the Taxpayer had an office, the Taxpayer filed an original BTPP tax return in the County for the 2023 tax year to report such assets for the first time there. The County then issued assessments of BTPP tax for the 2020 through 2022 tax years based on the asset detail list provided by the Taxpayer with its 2023 return. According to the Taxpayer, it subsequently discovered that some of these same assets had never been located in the County. Accordingly, the Taxpayer filed an amended 2023 BTPP tax return as well as a local appeal of the assessments for the 2020 through 2022 tax years, seeking to correct the errors.

The County advised the Taxpayer that the 2023 BTPP return could not be amended but that the County would consider that return with the Taxpayer’s appeal of the assessments for the 2020 through 2022 tax years. In its final determination, the County upheld the assessments on the basis that the Taxpayer failed to show that the BTPP reported on the Taxpayer’s original 2023 BTPP tax return had been disposed of or was located outside of the County. The Taxpayer appealed to the Department, contending that the County was assessing assets that were not located in the County.

ANALYSIS

All tangible personal property, unless declared intangible under the provisions of Virginia Code § 58.1-1100 et seq ., is reserved for local taxation by Article X § 4 of the Constitution of Virginia . Pursuant to Virginia Code § 58.1-3511 A, the situs of tangible personal property for purposes of the BTPP tax is the locality in which such property may be located on the tax day. Tax day is generally January 1. See Virginia Code § 58.1-3515.

Under the provisions of Virginia Code § 58.1-3109 6, the local commissioner of the revenue is empowered with the authority to require records and other information necessary to make an accurate assessment of a person’s tangible personal property. It is incumbent upon the taxpayer to prove to the satisfaction of the local taxing authority that it properly reported the value of its property on its BTPP returns. See Virginia Code § 58.1-3983.1 B 4. See also P.D. 11-54 (4/7/2011), P.D. 12-160 (10/12/2012), P.D. 22-29 (2/15/2022), and P.D. 24-91 (9/24/2024).

The County’s final determination upheld the assessments on the basis that the Taxpayer failed to prove that the assets in question were disposed of or located outside of the County. The Taxpayer acknowledges that it reported the contested assets in its original BTPP return for the 2023 tax year. The Taxpayer also does not dispute that it was required to file BTPP returns with the County for the 2020 through 2022 tax years. In the Department’s opinion, it was reasonable for the County to base its assessments for the 2020 through 2022 tax years on the asset detail list the Taxpayer submitted with its original 2023 BTPP tax return.

In general, when a taxpayer asserts that an item of BTPP is no longer on its premises, the taxpayer must provide sufficient documentation to the locality to show when it disposed of the property in question. In this case, however, the Taxpayer contends that the property was never located in the County, making proof of disposition irrelevant. The Taxpayer’s representative has provided an affidavit concerning the location of the Taxpayer’s BTPP for the tax years at issue. The affidavit states that 1) the property which the Taxpayer seeks to remove from its BTPP tax returns was never located in the County; and 2) the property listing attached to the affidavit accurately reflects the property located in the County for each of the taxable years at issue. The affidavit stated that these conclusions were based on a thorough review of the Taxpayer’s internal asset tracking records and accounting documentation.

DETERMINATION

When the evidence shows a taxpayer’s records are incomplete or inadequate and the locality’s basis for assessment is reasonable, the Department will consider the locality’s assessment to be prima facie correct. However, a locality must consider all evidence presented by a taxpayer that supports its allegations of errors in an assessment.

If the assets at issue were never located at the data center in the County, the Taxpayer is correct that proof of disposition would be irrelevant. The Department is remanding this case to the County to consider the documentation provided by the Taxpayer with its administrative appeal to the Department. In particular, because the Taxpayer’s affidavit was not provided to the County prior to the Taxpayer’s appeal to the Department, the County has not had an opportunity to express its opinion regarding the affidavit’s evidentiary value. In the Department’s opinion, absent evidence to the contrary, the affidavit represents a good faith effort on the part of the Taxpayer to support its contention that it included property on its 2023 BTPP filing which was never located in the County. See, e.g., P.D. 08-88 (6/16/2008).

In addition, the Taxpayer is instructed to provide the County with a more detailed explanation about how the Taxpayer’s internal asset tracking records and accounting documentation support the assertions contained in the affidavit. This explanation should be provided within 60 days of the date of this determination unless the Taxpayer and the County mutually agree to a different deadline. If the County determines that it needs further information, it should make the request in writing and provide the Taxpayer time to provide such information. Once the Taxpayer has submitted the explanation and any additional information and the County has had the opportunity to review everything submitted, the County must issue a revised final determination. If the Taxpayer disagrees with the results of that determination, it may appeal to the Department within 90 days of the final determination.

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

AR 5181.Q

Related Documents

08-88

11-54

12-160

15-39

18-212

22-29

24-91