Document Number
10-213
Tax Type
BTPP Tax
Description
Tax Commissioner does not have jurisdiction to make any determination with respect to the assessment of a penalty by a local assessing authority.
Topic
Clarification
Local Power to Tax
Local Taxes Discussion
Date Issued
09-15-2010


September 15, 2010








Re: Appeal of Final Local Determination
Taxpayer: *****
Locality: *****
Business Tangible Personal Property (BTPP) Tax

Dear *****:

This final state determination is issued upon the application for correction filed by you on behalf of ***** (the "Taxpayer") with the Department of Taxation. The Taxpayer appeals a final local determination by the ***** (the "City") denying an appeal to waive a late filing penalty for failure to timely file the 2009 personal property tax return.

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

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

FACTS


The Taxpayer's 2009 machinery and tools tax return was filed one day after the due date and the City assessed a late filing penalty. The Taxpayer requested a waiver of the penalty from the City. The Taxpayer had hired an accounting firm to prepare and file its return and believed it was not at fault for the late filing. The City denied the Taxpayer's request.

The Taxpayer has submitted an appeal to the Tax Commissioner, contending that the City may only assess a late filing penalty when the failure to file the tax return timely is the fault of the taxpayer. The Taxpayer has provided a written statement from the accounting firm stating that the Taxpayer provided the information timely to the accounting firm and the accounting firm failed to file the return timely. The City argues only circumstances beyond the control of the Taxpayer or its designated agent would merit waiver of penalty.

ANALYSIS


Virginia Code § 58.1-3983.1 B 1 provides that any person assessed with a local business tax, including machinery and tools tax, may appeal such assessment within certain time limitations to the local assessing official. Pursuant to Public Document (P.D.) 04-28 (6/25/2004), an "assessment" is defined 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." Under this definition, the assessment of a penalty by a local taxing authority would not constitute an assessment for purposes of filing an appeal under Va. Code § 58.1-3983.1. Furthermore, Va. Code § 58.1-3916 states "the commissioner of the revenue shall make determinations of fault relating exclusively to failure to file a return."

DETERMINATION


Virginia Code § 58.1-3983.1 authorizes the Tax Commissioner to address appeals of certain local business taxes. Such appeals are limited to assessments of tax as defined in P.D. 04-28. Accordingly, the Tax Commissioner does not have jurisdiction to make any determination with respect to the assessment of a penalty by a local assessing authority.

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


                • Linda D. Foster
                  Deputy Tax Commissioner


AR/1-4097136151.o

Rulings of the Tax Commissioner

Last Updated 08/25/2014 16:46