July 20, 2017
Re: Appeal of Final Local Determination
Taxpayer: *****
Locality: *****
Business, Professional and Occupational License (BPOL) Tax
Dear *****:
This notice of jurisdiction is issued upon the application for correction filed by you on behalf of your client, ***** (the “Taxpayer”), with the Department of Taxation. The Taxpayer appeals the denial of a refund of BPOL tax from the ***** (the “County”) for the 2013 through 2015 tax years.
The following determination is based on the facts presented to the Department summarized below. The Code of Virginia sections, regulation 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 filed amended BPOL tax returns for the 2013 through 2015 tax years, claiming refunds. The County denied the refunds and instructed the Taxpayer to file an appeal with the County if it disagreed. The Taxpayer appeals the denial of the refunds to the Department.
ANALYSIS
Virginia Code § 58.1-3703.1 A 5 b 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.
This statute also provides the procedure that a taxpayer must use to appeal a final local license tax assessment. A taxpayer must first file an appeal with the locality in which the appealable event occurred. Once an appeal is filed, the locality's assessing officer will fully review the taxpayer's claims and issue a final determination letter setting forth the facts and arguments in support of its decision. See Va. Code § 58.1-3703.1 A 5 b.
Under Va. Code § 58.1-3703.1 A 6 a, a taxpayer may file an appeal with the Tax Commissioner only after a final determination has been issued by a locality. See Public Document (P.D.) 11-124 (7/1/2001). Virginia Code § 58.1-3703.1 A 5 e, however, does allow a taxpayer to appeal directly to the Department if an appeal to a locality has been pending for more than one year. Under such circumstances, the taxpayer can elect to consider the local appeal to have been denied. The taxpayer is required to give a locality 30 days written notice of such an election.
The County issued a letter denying the Taxpayer's refund request and instructing the Taxpayer to file an administrative appeal with the County within one year of the letter date if the Taxpayer disagreed. As such, the County has not issued a final determination that the Taxpayer may appeal to the Department.
DETERMINATION
Because the County has not issued a final determination, the Taxpayer should first file a local appeal with the County. Once the County has issued its final determination, the Taxpayer may file an appeal with the Department pursuant to Title 23 of the Virginia Administrative Code (VAC) 10-500-720 if it disagrees with any of the County's conclusions. The Taxpayer may also appeal to the Department if its local appeal is pending with the County for more than one year, provided the Taxpayer gives the County 30 days written notice that it is electing to treat the appeal as denied.
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/1351.M