August 8, 2019
Re: Notice of Jurisdiction
Taxpayer: *****
Locality Assessing Tax: *****
Business, Professional and Occupational License (BPOL) tax
Dear *****:
This notice of jurisdiction is issued upon the application for correction filed on behalf of your client,***** (the “Taxpayer”), with the Department. The Taxpayer appeals assessments of Business, Professional and Occupational License (BPOL) tax issued by ***** (the “County”) for the 2015 through 2017 tax years.
The following determination is based on the facts presented to the Department summarized below. The Code of Virginia sections, regulations and public documents 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 County audited the Taxpayer and issued assessments. The Taxpayer appealed to the County. In a letter purporting to be a final local determination, the County communicated to the Taxpayer that it was adjusting the assessments. The Taxpayer, however, continued to dispute the outcome of the case, and it filed an appeal with the Department.
ANALYSIS
Under Virginia Code § 58.1-3703.1 A 6 a, a taxpayer may file an appeal with the Department only after a final determination has been issued by a locality. See Public Document (P.D.) 11-124 (7/1/2011). 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.
Under Title 23 of the Virginia Administrative Code (VAC) 10-500-10, “local assessing officer” means the Commissioner of Revenue or chief assessing officer or his designee. Therefore, to qualify as a final local determination, such letter should normally be signed by the Commissioner of Revenue or chief assessing officer and not employees working at their direction, unless the individual has been expressly designated by the Commissioner of Revenue or chief assessing officer and evidence of such designation is included with the final local determination. See P.D. 18-140 (3/30/2018).
In addition, under Title 23 VAC 10-500-710 C, a locality must set forth facts and arguments supporting its decision. The Department’s review of the letter issued by the County indicates that the County failed to: (1) reach a conclusion regarding the type of business the Taxpayer was engaged in, and (2) provide adequate factual and legal grounds to support the method it used to situs the gross receipts.
DETERMINATION
It appears that the purported final determination letter was not signed by the County’s Commissioner of the Revenue. Thus, it cannot be considered to be a final local determination. If the Commissioner of the Revenue wishes a subordinate to be designated with the authority to make final local determinations, that written designation should accompany the final local determination. See P.D. 19-6 (1/30/2019).
Therefore, the case is being remanded to the County to issue a proper final determination letter to the Taxpayer. Once the County has issued its final determination, the Taxpayer may file an appeal with the Department within 90 days pursuant to Title 23 VAC 10-500-720 if it disagrees with any of the City’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/2089.M