Did Virginia reconsider its refusal to hear BTPP appeals where taxpayers used the circuit-court route, appealed assessments before issuance, or lacked a final local decision?

Plain-English summary

Taxpayers asked Virginia to reconsider P.D. 18-197, which had dismissed their BTPP appeals for 2015 through 2018. They argued that the Department misunderstood their filings and Virginia law.

Virginia reaffirmed the dismissal: each year had a different procedural defect, and none gave the Department jurisdiction.

2015: the chosen route led to circuit court

The taxpayers proceeded under Va. Code § 58.1-3980. That general local-tax correction route is separate from the Department administrative route under Va. Code § 58.1-3983.1.

After a § 58.1-3980 local decision, the next step is circuit court under Va. Code § 58.1-3984 — not the Tax Commissioner. Department review exists only when the taxpayer properly uses § 58.1-3983.1.

2016 and 2017: the appeal was premature

The local appeal letter described assessments expected in the future. Even if the county later issued them, Virginia law did not permit an appeal before issuance.

The taxpayers suggested the county had misled them about whether assessments existed. The Department noted that the assessments had already been paid, so the taxpayers had or should have had knowledge of them. The original letter still challenged forthcoming assessments and was invalid on its face.

2018: no final decision or delay election

The county issued the 2018 assessment after the initial appeal, and the taxpayers appealed locally in October 2018. But at the time of P.D. 19-61:

• the county had not issued a final determination;
• the local appeal had not been pending more than one year; and
• the taxpayers had not given 30 days' written notice electing to treat the delay as a denial.

The Department therefore could not review 2018 either.

What this means for you

• Choose the appeal route deliberately. Section 58.1-3980 leads to circuit court; § 58.1-3983.1 can lead to Department review.
• An assessment must exist before appeal. Do not appeal a projected or expected assessment.
• Wait for a final local determination unless the delay rule applies. More than one year plus 30 days' written notice is required.
• Reconsideration does not cure the original procedural facts. The Department reexamined them and reached the same jurisdictional result.

Common questions

Q: Did the Department decide whether the BTPP assessments were substantively correct?

A: No. It decided only jurisdiction and procedure.

Q: Could the 2015 dispute go anywhere after the local decision?

A: The ruling identifies circuit court under Va. Code § 58.1-3984 as the next step for the route used.

Q: When can a delayed local appeal be treated as denied?

A: After it has been pending more than one year and the taxpayer gives at least 30 days' written notice.

Citations and references

• Va. Code § 58.1-3980 — general local-tax correction
• Va. Code §§ 58.1-3983.1(B)(6), (D) — administrative appeal and delay election
• Va. Code § 58.1-3984 — circuit-court route
• Related Virginia ruling: P.D. 18-197

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 19-61

Original ruling text

June 17, 2019

Re: Request for Reconsideration: Public Document 18-197

Taxpayer: *

Locality Assessing Tax: *

Business Tangible Personal Property Tax

Dear *:

This final state determination is issued pursuant to your request for reconsideration filed on behalf of * and (the “Taxpayers”) with the Department of Taxation (the “Department”). The Taxpayers seek reconsideration of Public Document (P.D.) 18-197 (12/6/2018) and correction of assessments of business tangible personal property (BTPP) tax issued by ** (the “County”) for the 2015 through 2018 tax years.

The following determination is based on the facts presented to the Department summarized below. The Code of Virginia sections and public document cited are available online in the Laws, Rules and Decisions section of the Department’s website, located at www.tax.virginia.gov .

FACTS

In P.D. 18-197, the Department determined that it lacked jurisdiction over the appeal for the 2015 tax year because the Taxpayers had proceeded under Virginia Code § 58.1-3980 instead of Virginia Code § 58.1-3983.1. The Department further determined that it lacked jurisdiction over the appeal for the 2016 through 2018 tax years because the Taxpayers’ local appeal sought correction of assessments the Taxpayers anticipated the County would issue. The Taxpayers request that the Department reconsider its determination in P.D. 18-197, asserting that the determination was based on misapplications of Virginia law and a misunderstanding of the facts.

ANALYSIS

2015 Assessment

It appears that the Taxpayers believe that the Department concluded it did not have jurisdiction over the appeal for the 2015 tax year because the Taxpayers had not filed an appeal with the circuit court. If so, the Taxpayers misconstrue the Department’s conclusion. The Taxpayers filed their local appeal under Virginia Code § 58.1-3980 for the 2015 through 2018 tax years. Alternatively, the Taxpayers filed their local appeal under Virginia Code § 58.1-3983.1 for the 2016 through 2018 tax years. The Taxpayers, therefore, proceeded only under Virginia Code § 58.1-3980 for the 2015 tax year. That statute does not provide for an administrative appeal to the Department in the event that a taxpayer disagrees with a locality’s final determination.

As the Department explained in P.D. 18-197, the administrative appeals process involving the Department under Virginia Code § 58.1-3983.1 D is separate and distinct from the general appeals process afforded to taxpayers with local tax grievances under Virginia Code § 58.1-3980. Should a taxpayer proceed to file an appeal with a locality under Virginia Code § 58.1-3980, its recourse, should it disagree with the locality’s final determination, is to appeal to the circuit court pursuant to Virginia Code § 58.1-3984. The Department is only permitted to consider appeals properly filled under the statutory process established under Virginia Code § 58.1-3983.1.

2016 and 2017 Assessments

The Taxpayers assert that, although their initial administrative appeal to the County suggested the assessments for the 2016 and 2017 tax years had not been issued, the assessments had in fact been issued. The Taxpayers argue that the Department, therefore, has jurisdiction to consider its appeal for the 2016 and 2017 tax years. They further argue that their initial misunderstanding was based on inaccurate or misleading information provided by the County.

The Taxpayers’ local appeal letter clearly appealed assessments it anticipated would be forthcoming for the 2016 and 2017 tax years. The County apparently issued such assessments in June 2018. As stated in P.D. 18-197, the Taxpayers were not permitted under Virginia Code § 58.1-3983.1 to file a local appeal for assessments that had not yet been issued.

With respect to the Taxpayers’ contention that the County was at fault in not disclosing that initial assessments had, in fact, already been issued for the 2016 and 2017 tax years, those assessments had already been paid. As such, it stands to reason that the Taxpayers already had, or at least should have had, knowledge of those assessments.

2018 Assessment

An assessment for the 2018 tax year was issued by the County after the Taxpayers’ initial appeal. The Taxpayers appealed that assessment to the County in October 2018, but the County has not issued a final determination. The Taxpayers assert that the Department now has jurisdiction over this assessment as well.

Virginia Code § 58.1-3983.1 B 6 states, “[a]ny taxpayer whose administrative appeal to the commissioner of the revenue or other assessing official pursuant to this subsection has been pending for more than one year without the issuance of a final determination may, upon not less than 30 days’ written notice to the commissioner of the revenue or other assessing official, elect to treat the application as denied and appeal the assessment to the Tax Commissioner in accordance with provisions of subsection D.” In this case, no final determination has been issued, the appeal has not been pending for more than one year, and the Taxpayers did not provide the County 30 days’ written notice.

DETERMINATION

After carefully considering the information provided, P.D. 18-197 was correct in concluding that the Department lacked jurisdiction to consider the Taxpayers’ appeal of BTPP tax assessments for the 2015 through 2018 tax years. The Taxpayers appealed the 2015 assessment under Virginia Code § 58.1-3980, which does not grant an administrative appeal to the Department. The Taxpayers’ local appeal for the 2016 through 2018 tax years only referenced forthcoming assessments pursuant to Virginia Code § 58.1-3983.1 and, therefore, was invalid on its face. The Taxpayers’ subsequent appeal for 2018 tax year has not received a final local determination or met the requirements of Virginia Code § 58.1-3983.1 B 6.

This letter constitutes the Department’s final determination regarding the jurisdictional matters presented. The Taxpayers should review and follow the Department’s instructions in P.D. 18-197 and this letter, should they continue to seek administrative remedies with the County and the Department.

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/1948

Related Documents

18-197