July 22, 2026
Re: Your Administrative Appeal
Taxpayers: *****
Locality Assessing Tax: *****
Business Tangible Personal Property Tax
Dear *****:
This final state determination is issued upon the application for correction filed by you on behalf of ***** (the “Taxpayers”) with the Department of Taxation. The Taxpayers appeal a late-filing penalty assessed by the ***** (the “City”) in connection with the Taxpayers’ 2025 business tangible personal property (“BTPP”) tax return.
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 Taxpayers are lessors of business vehicles located in the City. The Taxpayers prepared and signed their 2025 BTPP return for the City on April 28, 2025. The envelope containing the return received a postage meter stamp at the Taxpayers’ place of business on April 29, 2025. The United States Postal Service postmarked the envelope on May 2, 2025, one day after the May 1 filing deadline. The City assessed a late filing penalty based on the May 2, 2025 postmark.
By email dated October 22, 2025, the Taxpayers requested that the City waive the late-filing penalty on the ground that the late filing was not the fault of the Taxpayers, or, in the alternative, grant a retroactive extension of time to file the return. By email dated October 30, 2025, the City declined to waive the penalty.
The Taxpayers paid the underlying tax and penalty and filed an application with the Department contending that the penalty should not have been imposed under Virginia Code § 58.1-3916 because the late filing was not the fault of the Taxpayers.
DETERMINATION
Virginia Code § 58.1-3983.1 D authorizes the Department to issue determinations on taxpayer appeals of certain local business tax assessments, including the BTPP tax. Such appeals are limited to assessments of tax. Section 1.4 of the Guidelines of Appealing Local Business Taxes, issued as Public Document (P.D.) 04-28 (6/25/2004), defines an assessment as “a determination as to the proper rate of tax, the measure to which the tax rate is applied, and ultimately the amount of tax, including additional or omitted tax, that is due.”
The Department has determined that, under this definition, the assessment of a penalty by a local taxing authority does not constitute an assessment for purposes of filing an appeal under Virginia Code § 58.1-3983.1. Accordingly, the Tax Commissioner does not have jurisdiction to make any determination with respect to the assessment of a penalty by a local assessing authority. See P.D. 10-213 (9/15/2010).
This conclusion is confirmed by Virginia Code § 58.1-3916, which governs local penalties for the failure to file a return or to pay a tax. Virginia Code § 58.1-3916 provides that “[t]he treasurer shall make determinations of fault relating exclusively to failure to pay a tax, and the commissioner of the revenue shall make determinations of fault relating exclusively to failure to file a return.” The determination of whether the Taxpayers’ late filing was the fault of the Taxpayers is determined by the City’s Commissioner of the Revenue, not by the Tax Commissioner. The Taxpayers’ alternative request for a retroactive extension of time to file is likewise beyond the Department’s authority. Virginia Code § 58.1-3916 gives the authority to grant such extensions to the local governing body, which in this case is the City.
Because the appeal contests only a penalty, the Department lacks jurisdiction over the assessment of a penalty by a local assessing authority, and cannot address the merits of the Taxpayers’ appeal.
If the Taxpayers continue to disagree with the penalty, their remedy lies with the Circuit Court for the City under Virginia Code § 58.1-3984.
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 5583.H