Could the Virginia Department decide whether a county overvalued a boat for local mobile property tax?

Plain-English summary

The county adjusted the assessed value of the taxpayer's boat using a pricing guide. The owner appealed, arguing that the result exceeded fair market value.

Virginia did not decide the boat's correct value. The Department can hear certain local mobile property tax appeals, but Va. Code § 58.1-3983.1 D 5 expressly prohibits it from determining the value or valuation method for property outside the local business-tax category. The Tax Commissioner therefore lacked jurisdiction over this valuation dispute.

Citations and references

• Va. Code § 58.1-3983.1 D 5
• P.D. 11-198 and P.D. 16-42

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 18-8

Original ruling text

January 18, 2018

Re: Appeal of Final Local Determination

Taxpayer: *

Locality Assessing Tax: *

Local Mobile Property Tax

Dear *:

This notice of jurisdiction is issued upon the application for correction filed by you (the “Taxpayer”) with the Department of Taxation. The Taxpayer seeks correction of an assessment of local mobile property tax issued to him by * (the “County”) for the 2016 tax year.

The following determination is based on the facts presented to the Department summarized below. The Code of Virginia sections and public documents cited are available on-line in the Laws, Rules and Decisions section of the Department's web site, located at www.tax.virginia.gov .

FACTS

The County assessed local mobile property tax on the Taxpayer's boat for the 2016 tax year. The Taxpayer appealed the assessment to the County. In its final local determination, the County adjusted the assessed value of the boat in accordance with a pricing guide. The Taxpayer appealed to the Department, contending that the County's valuation exceeded the boat's fair market value.

ANALYSIS

Under Virginia 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, Virginia Code § 58.1-3983.1 D 5 clearly states that the Tax Commissioner “shall not make a determination regarding the valuation or the method of 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. Pursuant to Virginia Code § 58.1-3983.1 D 5, therefore, the Department does not have the authority to make determinations regarding the value of property subject to the local mobile property tax. See Public Document (P.D.) 11­-198 (12/7/2011) and P.D. 16-42 (3/31/2016). Although the County properly cited Virginia Code § 58.1-3983.1 D as generally permitting appeals of local mobile property tax assessments to the Department, as stated above, the Department is expressly prohibited under Virginia Code § 58.1-3983.1 D 5 from deciding whether a locality's valuation of property subject to the local mobile property tax is erroneous.

DETERMINATION

Because the Department is prohibited from issuing determinations regarding the valuation or method of valuation used in a local mobile property tax case, I find that the Department lacks jurisdiction to determine whether the assessed value assigned to the Taxpayer's boat for the 2016 tax year is erroneous.

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/1514.M