July 16, 2026

Re:    Appeal of Final Local Determination
         Taxpayer: *****
          Locality Assessing Tax: *****
          Professional and Occupational License (BPOL) Tax; Business Tangible Personal Property Tax (BTPP); Local Food and Beverage Tax

Dear *****:

This notice of jurisdiction is issued upon the administrative appeal filed by ***** (the “Taxpayer”) with the Department of Taxation. The Taxpayer appeals the scope of an audit and assessments of business, professional and occupational license (“BPOL”) tax, business tangible personal property (“BTPP”) tax, and meals taxes issued by the  ***** (the “City”) for the tax years ended December 31, 2024, through 2025.

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 City conducted an audit of the Taxpayer’s business license, business personal property, and trust taxes. As a result of the audit, the City issued assessments of BPOL, BTPP, and meals taxes. The Taxpayer sent a letter to the City in January 2026, seeking to appeal the scope of the audit along with the additional assessments of meals tax. The City responded, informing the Taxpayer of the process for filing a local appeal with the City. The Taxpayer filed an appeal with the Department, contending that the City exceeded the scope of the audit and also contesting the assessments of additional meals tax.

ANALYSIS

Virginia Code §§ 58.1-3703.1 A 6 and 58.1-3983.1 D authorize the Department to consider appeals of final local determinations of certain taxes. The ability to file an administrative appeal to the Department for a local tax is limited to the business, professional and occupational license tax, business tangible personal property tax, machinery and tools tax, merchant's capital tax, local mobile property tax and consumer utility tax. See Public Document (P.D.) 20-116 (06/30/2020).

The Department is not authorized to consider appeals of the local food and beverage tax, commonly known as the meals tax. See Public Document (P.D.) 13-82 (05/29/2013), P.D. 17-218 (12/28/2017) and P.D. 20-116 (06/30/2020).

Taxpayers assessed with BPOL tax may appeal to the locality under Virginia Code § 58.1-3703.1 A 5. Once an appeal is filed, the locality’s assessing officer will fully review the taxpayer’s claim and issue a final determination letter setting forth the facts and arguments in support of its decision. See Virginia Code § 58.1-3703.1 A 5 b. 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 (07/01/2011).

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 (06/25/2004). 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 (12/06/2018), P.D. 22-145 (10/07/2022), P.D. 24-93 (09/25/2024), and P.D. 25-45 (04/08/2025).

DETERMINATION

The Taxpayer did not file a proper local administrative appeal to the City for BPOL and BTPP taxes. Further, the City did not issue a proper final local determination concerning the Taxpayer’s BPOL and BTPP taxes. Accordingly, the Department lacks jurisdiction to consider any issues the Taxpayer has raised in this appeal.

The Department cannot issue a determination regarding the validity of the meals tax assessments issued to the Taxpayer by the City. Virginia Code § 58.1-3980 grants local commissioners of the revenue general jurisdiction over appeals involving local taxes, which would include the tax on food and beverages. The Taxpayer may appeal assessments of the meals tax to the circuit court under the provisions of Virginia Code § 58.1-3984 A. In the Taxpayer’s case, such an appeal must be filed with the circuit court: (1) within three years from the last day of the tax year for which the assessments are made, (2) within one year from the date of the assessment, or (3) within one year from the date of the local official’s final determination under Virginia Code § 58.1-3981, whichever is later.

If you have any questions regarding this determination, you may contact ***** in the Office of Legal Affairs, Tax Adjudication and Resolution Division, at ***** or *****.

                                                                                                                                                                        Sincerely,

                                                                                                                                                                         Kristin L. Collins
                                                                                                                                                                         Tax Commissioner
                                                                                                                                                                         Commonwealth of Virginia

AR/5473.T