February 2, 2021
Re: Notice of Jurisdiction
Taxpayer: *****
Locality Assessing Tax: *****
Business Tangible Personal Property (BTPP) tax
Dear *****:
This notice of jurisdiction is issued upon the application for correction filed by ***** (the “Taxpayer”), with the Department. The Taxpayer appeals assessments of Business Tangible Personal Property (BTPP) tax issued to the Taxpayer by ***** (the “County”) for the 2013 through 2019 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 Taxpayer was a limited liability company that describes its activities as designing, manufacturing, marketing, and distributing products to law enforcement, fire-rescue and military customers. It has a warehouse located in the county where it stored tangible property. The County assessed BTPP tax for the 2013 through 2019 tax years on equipment owned by the Taxpayer. The Taxpayer emailed the County contending that this equipment had minimal or no value. In an email response from an employee of the Commissioner of the Revenue’s office, the County upheld the assessments. The Taxpayer appealed to the Department, contending that the equipment at issue was overvalued by the County and that the County did not clarify its classification criteria or provide the appeals process.
ANALYSIS
A taxpayer assessed with BTPP 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 the assessment, whichever is later, to the commissioner of the revenue or other local assessing official. See Virginia Code § 58.1-3983.1 B 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. Once a proper local appeal has been filed, the locality must undertake a full review of the taxpayer’s claims and issue a written determination setting forth the facts and analysis in support of the locality’s decision. Pursuant to Virginia Code § 58.1-3983.1 D, only when a final local determination has been issued can a taxpayer file an administrative appeal with the Department if it wishes to contest any of the locality’s conclusions. Alternatively, a taxpayer may file an appeal with the Department if its appeal with the locality has been pending for more than one year and it provides the locality with at least 30 days written notice. See Virginia Code § 58.1-3983.1 B 6.
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) provide taxpayers with the procedure for appealing local business tax assessments. The Taxpayer’s appeal to the Department attached multiple emails to the County that detail its position on with regard to the equipment at issue, but request guidance on its appeal rights. Thus, it does not appear that any of the emails directed to the County was a local business tax appeal.
Further, the Guidelines define a “local assessing officer” as the Commissioner of Revenue or chief assessing officer or his designee. Therefore, to qualify as a final local determination, the letter should normally be signed by the Commissioner of the Revenue or chief assessing officer and not an employee working at their direction, unless the individual has been expressly designated by the Commissioner of the 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). Additionally, the Guidelines contain specific language that must be included in any final written determination.
DETERMINATION
Because no local business tax appeal was filed, the Taxpayer must first file an appeal to the County pursuant to Virginia Code § 58.1-3983.1 and the Guidelines. The County should issue a final local determination in accordance with the Guidelines’ prescribed format for final local determinations. Once a final local determination is issued, the Taxpayer will have 90 days to file an appeal with the Department if it disagrees with the outcome. If the case has been pending with the County for more than one year, the Taxpayer may also appeal to the Department after giving the County the requisite notice.
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/3560.B