December 7, 2018
Re: § 58.1-1821 Application: Land Preservation Tax Credit Application
Dear *****:
This will reply to your letter in which you appeal the denial of an application for the Land Preservation Tax Credit (the “Credit”) submitted by ***** (the “Taxpayers”).
FACTS
The Taxpayers claimed the Credit on their 2016 Virginia individual income tax return. The Department disallowed the Credit because its records showed that it had not timely received a Credit application. Accordingly, an assessment for the taxable year ended December 31, 2016 was issued.
A copy of the Credit application was sent by the Taxpayers and received by the Department in August 2018. The Department did not certify the Credit because it was filed after the December 31, 2017 deadline required by law for claiming the Credit. The Taxpayers appeal, contending they timely mailed the original application in December 2016 and the Department should grant the Credit and abate the assessment.
DETERMINATION
Virginia Code § 58.1-512 provides a Credit for 40% of the fair market value of real property or an interest in real property donated to an eligible charitable organization or instrumentality of the Commonwealth for qualifying land conservation purposes. Beginning with 2015, the total amount of the Credit available for all taxpayers for each calendar year is limited to $75 million. The Department issues the Credit in the order that each Credit application (Form LPC-1) is received.
Pursuant to Virginia Code § 58.1-512 D 4:
No credit shall be allowed for any land or interest in land conveyed on or after July 1, 2015, unless a complete application for tax credit with regard to the conveyance has been filed with the Department by December 31 of the year following the calendar year of the conveyance. For filings by mail or a recognized commercial delivery service, the postmark or confirmation of shipment shall determine the date of filing
In this case, the Taxpayers’ donation was made on November 21, 2016. By law, the deadline for the Taxpayers to file their Form LPC-1 to receive the Credit was December 31, 2017. See Virginia Code § 58.1-512 D 4 a. The Taxpayers contend that they mailed the Credit application on December 22, 2016. The Department has no record of receiving this application. On August 3, 2018, the Taxpayers sent a Credit application along with a letter stating the original application had been timely mailed. After receiving the Taxpayer’s form on August 7, 2018, the Department denied the Credit because the application was received beyond the statutory deadline.
Asserting that Virginia Code § 58.1-512 does not require a particular form of delivery or proof of delivery, the Taxpayers argue that the Department should accept their assertion that they timely filed their application. Pursuant to Virginia Code § 58.1-512 D 4, the date a Credit application sent in the mail is considered filed is the date of the postmark. In this case, the Credit application that was purportedly sent in December 2016 was never received by the Department. An application for the Credit postmarked August 3, 2018 was received well after the December 31, 2017 filing deadline.
If there is no postmark, however, applications for tax credits are considered filed on the date that they are received by the Department. See Public Document (P.D.) 16-146 (7/6/2016). The Taxpayers argue that if the Department can only rely on delivery that is written, a form delivered by hand could not meet the delivery requirement. By date stamping every item of correspondence on the date it is received, however, the Department insures that each hand delivered application form is marked with the delivery date in writing.
Further, the Form LPC-1 instructions indicate that the Department sends an acknowledgement of receipt to applicants when it receives a Credit application. No acknowledgment letter was sent to the Taxpayers. The Taxpayers never contacted the Department to indicate that they did receive an acknowledgment. Had they timely contacted the Department, the Taxpayers would have had time to resubmit the application prior to the deadline.
Therefore, the Taxpayers’ Credit application dated in December 22, 2016 cannot be considered timely filed because it was not received by the Department until August 2018. Because the application was not received in a timely fashion, the Taxpayers’ request for the Credit to be claimed cannot be granted. As such, the assessment issued for the taxable year ended December 31, 2016 is upheld.
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. 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/1824.B