April 8, 2025
Re: Notice of Jurisdiction
Taxpayer: *****
Locality Assessing Tax: *****
Business Tangible Personal Property Tax
Dear *****:
This notice of jurisdiction is issued upon the administrative appeal filed by you on behalf of *****. (the “Taxpayer”) with the Department of Taxation. The Taxpayer appeals assessments of business tangible personal property (BTPP) tax issued to it by the ***** (the “County”) for the 2020 through 2023 tax years.
The following determination is based on the facts presented to the Department summarized below. The Code of Virginia sections cited are available online at law.lis.virginia.gov. The public documents cited are available at tax.virginia.gov in the Laws, Rules, & Decisions section of the Department’s website.
FACTS
The County issued statutory and supplemental assessments of BTPP tax to the Taxpayer for the 2020 to 2023 tax years. By letter dated May 17, 2024, the Taxpayer requested that the County abate the assessments because it did not have a definite place of business in the County and did not have any BTPP located in the County. The County subsequently issued a determination letter stating that it was in response to the Taxpayer’s application for correction under Virginia Code § 58.1-3980. Pursuant to Virginia Code § 58.1-3981, the County made minor corrections to the assessments but otherwise upheld them in full. The Taxpayer then appealed to the Department pursuant to Virginia Code § 58.1-3983.1.
ANALYSIS
Virginia Code § 58.1-3980 provides that any person aggrieved by an assessment of local taxes “may, within three years from the last day of the tax year for which such assessment is made, or within one year from the date of the assessment, whichever is later, apply to the commissioner of the revenue or such other official who made the assessment for a correction thereof.” Under this procedure, if the taxpayer disagrees in whole or in part with the local assessing officer’s determination, the taxpayer may then seek correction with the circuit court under the provisions of Virginia Code § 58.1-3984.
Virginia Code § 58.1-3983.1 B 1 provides that any person assessed with a “local business tax . . . may appeal such 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 such assessment, whichever is later, to the commissioner of the revenue or other assessing official.” Under this provision, if the taxpayer’s appeal is denied in whole or in part by the local assessing official, the taxpayer may, within 90 days of the date of the final local determination, appeal to the Department.
In this case, both parties have characterized the Taxpayer’s May 17, 2024, letter to the County as an administrative appeal. The letter, however, did not indicate whether it was filed under Virginia Code § 58.1-3980 or Virginia Code § 58.1-3983.1. The County’s determination stated that it was issued in response to an appeal filed under Virginia Code § 58.1-3980. In the Department’s opinion, the County’s decision to treat the Taxpayer’s letter as an appeal under Virginia Code § 58.1-3980 was reasonable because that section allowed the County to address all of the tax years the Taxpayer was contesting. The assessments for the 2020 through 2022 tax years were no longer appealable under Virginia Code § 58.1-3983.1 based on the tax years and dates of assessment at issue.
As indicated above, taxpayers assessed with BTPP tax may appeal to the locality under either Virginia Code § 58.1-3980 or Virginia Code § 58.1-3983.1. If a taxpayer wishes to appeal an assessment from a locality to the Department, it must first file a local administrative appeal pursuant to the process set forth in Virginia Code § 58.1-3983.1 B and the Guidelines for Appealing Local Business Taxes (the “Guidelines”), issued as Public Document (P.D.) 04-28 (6/25/2004). The Department has consistently declined to address appeals involving local BTPP tax unless the taxpayer has first appealed the assessments to the locality under Virginia Code § 58.1-3983.1. See, e.g., P.D. 18-197 (12/6/2018), P.D. 22-145 (10/7/2022), and P.D. 24-93 (9/25/2024).
DETERMINATION
The Taxpayer did not appeal to the County under a specific section of the Code of Virginia, and, in the Department’s opinion, the County reasonably responded as if the Taxpayer had appealed under Virginia Code § 58.1-3980. That section allowed the County to address all of the tax years the Taxpayer was contesting, whereas the County could not have addressed the assessments for the 2020 through 2022 tax years under Virginia Code § 58.1-3983.1 because the time period within which to appeal those assessments under that section had already expired. Therefore, the Department does not have jurisdiction to address the Taxpayer’s appeal. The Taxpayer, however, may be able to seek relief in circuit court under the procedures set forth in Virginia Code § 58.1-3984 if it wishes to pursue the matter further.
If you have any questions regarding this notice of jurisdiction, you may contact ***** in the Office of Tax Policy and Legal Affairs, Tax Adjudication and Resolution Division, at ***** or *****.
Sincerely,
James J. Alex
Tax Commissioner
Commonwealth of Virginia
AR 5125.Q