Could the Virginia Tax Commissioner decide whether a county should value a used recreational vehicle at purchase price or NADA value?

Plain-English summary

Virginia dismissed the appeal because the Tax Commissioner lacked authority to decide the recreational vehicle's value. The owners bought a used 2010 RV in 2011. The county assessed it using the 2011 NADA used-retail value, while the owners argued for their arm's-length purchase price.

Va. Code § 58.1-3983.1 allowed Department review of certain local business taxes and local mobile property tax issues. But subsection (D)(5) expressly prohibited the Commissioner from determining property value except for local business-tax property.

Recreational vehicles fall within local mobile property tax. The Department therefore did not reach the merits of the owners' evidence or the county's valuation method.

What this means for you

• A Department appeal cannot resolve the valuation amount of locally taxed mobile property.
• Recreational vehicles, campers, boats, airplanes, and trailers fall within the ruling's described mobile-property category.
• A dismissal for lack of jurisdiction is not approval of either valuation method.

Common questions

Q: Did Virginia rule that NADA value was correct?
A: No. It had no authority to decide the valuation dispute.

Q: Did the purchase price win instead?
A: No. The Department did not reach that issue either.

Citations and references

• Va. Code § 58.1-3983.1(D)(5).

Subject

Department does not have the authority to make determinations regarding the value of property subject to the local mobile property tax

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 11-198

Original ruling text

December 7, 2011

Re: Appeal of Final Local Determination

Taxpayer: *

Locality: *

Local Mobile Property Tax

Dear *:

This is response to the letter submitted by * (the "Taxpayer") dated June 29, 2011, appealing the above referenced Final Local Determination. I apologize for the delay in responding to your letter.

The Taxpayer and his wife purchased a used 2010 recreational vehicle in 2011. The County issued to the Taxpayer its bi-annual personal property tax assessment for the first half of the 2011 tax year. The tax on the recreational vehicle was based on the used retail value listed in the 2011 National Automobile Dealer's Association (NADA) pricing guide.

On May 16, 2011, the Taxpayer wrote to the County contending that the tax assessed by the County should have been based on the purchase price of the recreational vehicle rather than the NADA value. The County issued a response to the Taxpayer indicating that it would treat the Taxpayer's letter as an appeal of the tax assessment. The Taxpayer replied with another letter and included additional information to be considered by the County.

The County issued a final determination upholding its assessment on the basis that Virginia law mandates the use of a pricing guide to determine the valuation of a recreational vehicle. The Taxpayer appeals the local final determination to the Department, contending the recreational vehicle should be valued at the arm's length purchase price and the County did not consider the additional information he submitted.

The Taxpayer avers that the recreational vehicle should be valued at the purchase price for purposes of the local tax on mobile property. The County contends that the recreational vehicle was properly valued in accordance with the NADA guide.

Under Va. Code § 58.1-3983.1, the Department has the jurisdiction to address appeals of local determinations of local business taxes and local mobile property tax. However, Va. Code § 58.1-3983.1 D 5 clearly states that the Tax Commissioner "shall not make a determination regarding the valuation of property subject to any tax other than a local business tax." Local business taxes, include machinery and tools tax, business tangible personal property tax, merchant's capital tax and, in certain cases, consumer utility tax. Local mobile property tax is that personal property tax on airplanes, boats, campers, recreational vehicles, and trailers.

The Taxpayer is requesting that the Department issue a determination on the value of a recreational vehicle subject to a local mobile property tax. Pursuant to Va. Code § 58.1-3983.1 D 5, the Department does not have the authority to make determinations regarding the value of property subject to the local mobile property tax. Therefore, the Department lacks jurisdiction to address the Taxpayer's appeal.

The Code of Virginia sections cited are available on-line at www.tax.virginia.gov in the Tax Policy Library section of the Department's website. If you have any questions concerning this determination, you may contact * in the Office of Tax Policy, Appeals and Rulings, at ***.

Sincerely,

Craig M. Burns

Tax Commissioner

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