April 10, 2020
Re: Appeal of Final Local Determination
Taxpayer: *****
Locality Assessing Tax: *****
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 ***** (the “Taxpayer”), with the Department of Taxation. The Taxpayer appeals assessments of Business, Professional and Occupational License (BPOL) tax issued by ***** (the “City”) for the 2017 through 2019 tax years.
The following determination is based on the facts presented to the Department and summarized below. The Code of Virginia sections, regulations and public document cited are available on-line at www.tax.virginia.gov in the Laws, Rules and Decisions section of the Department’s website.
FACTS
In Public Document (P.D.) 18-211 (12/18/2018), the Department determined that it lacked jurisdiction over the Taxpayer’s appeal and instructed the Taxpayer to appeal to the City first, if and when an appealable event occurred. Subsequent to the Department’s notice of jurisdiction, the County issued assessments for the 2017 through 2019 tax years. The Taxpayer again appeals to the Department, contending it was exempt from BPOL tax.
ANALYSIS
As the Department previously explained in P.D. 18-211, Virginia Code § 58.1-3703.1 A 5 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. An appealable event also includes the appeal of a business classification, regardless of whether the taxpayer’s appeal is in conjunction with an assessment, examination, audit or any other action taken by the locality. In P.D. 18-211, the Department determined no appealable event had occurred as no assessments had been issued or increased, no refund denied, and the case did not involve a classification issue.
The Department also explained the procedure a taxpayer must use to appeal a final local license tax assessment. 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 P.D. 11-124 (7/1/2011). A final determination 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 determination. See P.D. 18-140 (3/30/2018).
On or around the same day the assessments were issued, an employee of the Commissioner of the Revenue communicated the City’s rationale for issuing the assessments. This communication did not purport to be a final local determination and the employee clearly explained that the issuance of the assessments would create the appealable event. The Taxpayer, however, appealed directly to the Department again, contrary to the express instructions given in P.D. 18-211.
DETERMINATION
Because the Taxpayer did not appeal the assessments to the City first, the Department lacks jurisdiction to decide the Taxpayer’s appeal. The Taxpayer should review the appeals and rulings procedures described in Virginia Code § 58.1-3703.1 and more fully described in Title 23 of the Virginia Administrative Code (VAC) 10-500-640 et. seq. If the Taxpayer wishes to dispute the assessments, it must first file an appeal with the City. Once the City issues its final determination, the Taxpayer may file an appeal with the Department if it still disagrees with the outcome. Alternatively, the Taxpayer may file an appeal with the Department if its appeal with the locality has been pending for more than one year, provided the Taxpayer gives 30 days written notice to the City of its intent to file an appeal with the Department.
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/2194.A