April 12, 2023
Re: Appeal of Final Local Determination
Taxpayer: *****
Locality Assessing Tax: *****
Business Tangible Personal Property Tax
Dear *****:
This notice of jurisdiction is issued upon the application for correction filed by you on behalf of ***** (collectively, the “Taxpayer”) with the Department of Taxation. The Taxpayer appeals the denial of refunds of business tangible personal property (BTPP) tax paid to ***** (the “County”) for the 2017 through 2020 tax years.
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 on-line at www.tax.virginia.gov in the Laws, Rules and Decisions section of the Department’s web site.
FACTS
The Taxpayer operated an amusement park in the County. The Taxpayer submitted a refund request to the County for BTPP tax paid for the 2017 through 2020 tax years, contending that certain items of property that had been the subject of previous BTPP tax assessments were in fact fixtures to realty and not subject to the BTPP tax and that certain assets were removed from the Taxpayer’s asset list because they were no longer owned by the Taxpayer.
The County denied the refund request, concluding that the items at issue were not fixtures and thus were subject to the BTPP tax and that the Taxpayer was not eligible for a refund based on the removal of assets because the Taxpayer failed to supply the County with complete and accurate information concerning past asset disposals. The Taxpayer appealed the County’s determination to the Department, contending that all of the contested items of property were fixtures to realty and that the County is taxing property that is not located within its jurisdiction.
ANALYSIS
The procedural background of this case is similar to the facts of Public Document (P.D.) 22-113 (6/21/2022). In that case, the taxpayer requested a refund on the basis that it had erroneously paid BTPP taxes to the locality. The locality later issued a purported “Final Local Determination Letter” in response to the taxpayer’s “appeal application.” The taxpayer, however, had not filed an appeal. Amended returns or refund claims seeking to correct mistakes in a taxpayer’s own filings are not appeals. In such cases, the locality should either grant the request, or perform a verification process. If the locality chooses to perform a verification process, the taxpayer should be informed of the results of that review and then should be given the opportunity to appeal the locality’s decision. Like that case, here the County proceeded to issue a final local determination in response to the Taxpayer’s initial refund claim, instead of denying the refund and informing the Taxpayer of its local appeal rights.
DETERMINATION
In this case, the Taxpayer filed a refund claim, the County issued a response, and the Taxpayer should now be afforded an opportunity to participate in the local appeals process. Because the County has issued a response, the Taxpayer may now file a local appeal under Virginia Code § 58.1-3980 or § 58.1-3983.1. If the County issues a final determination and the Taxpayer disagrees with the outcome, then the Taxpayer may appeal to the Department under Virginia Code § 58.1-3983.1 or the local circuit court under Virginia Code § 58.1-3980. Until the local appeals process is completed, 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, Appeals and Rulings, at *****.
Sincerely,
Craig M. Burns
Tax Commissioner
AR/4296.X