Can I appeal a Virginia locality's meals (food and beverage) tax assessment to the Department of Taxation?

Plain-English summary

A taxpayer was assessed local food and beverage tax — commonly called the meals tax — by a Virginia county, and tried to appeal it to the Department of Taxation. The Commissioner issued a "notice of jurisdiction" explaining that the Department cannot decide this kind of appeal.

By statute (Va. Code §§ 58.1-3703.1 and 58.1-3983.1), the Department's authority to hear appeals of local taxes is limited to a specific list: the BPOL (business license) tax, business tangible personal property tax, machinery and tools tax, merchant's capital tax, local mobile property tax, and consumer utility tax. The meals tax is not on that list, so the Department has no power to rule on its validity (see P.D. 13-82 and P.D. 17-218).

Instead, general jurisdiction over local-tax appeals sits with the local commissioner of the revenue under Va. Code § 58.1-3980, and a taxpayer may then take a meals-tax assessment to the circuit court under Va. Code § 58.1-3984 A. That court appeal must be filed within the later of: three years from the last day of the tax year, one year from the date of assessment, or one year from the local official's final determination.

What this means for you

Restaurants and businesses assessed a local meals tax

Don't route a meals-tax dispute to the state Department of Taxation — it will decline for lack of jurisdiction, and the clock on your real remedies keeps running while you wait. Take it up with the locality's commissioner of the revenue, and if you're not satisfied, file in circuit court within the deadlines above. The meals tax is a local tax, administered locally, even though some other local taxes (like BPOL) can be appealed to the state.

Anyone mapping a local-tax appeal route

Which body hears your local-tax appeal depends on the tax. The Department hears only the enumerated local taxes (BPOL, business tangible personal property, machinery and tools, merchant's capital, mobile property, consumer utility). Everything else — including the meals tax — goes through the local commissioner of the revenue and then the circuit court. Identify the right forum first so you don't blow a deadline.

Common questions

Q: Can I appeal a local meals tax to the Virginia Department of Taxation?
A: No. The Department's local-tax appeal authority is limited by statute to BPOL, business tangible personal property, machinery and tools, merchant's capital, mobile property, and consumer utility taxes. The meals tax isn't included.

Q: Then where do I appeal a meals tax assessment?
A: To the local commissioner of the revenue (Va. Code § 58.1-3980), and from there to the circuit court under Va. Code § 58.1-3984 A.

Q: What's the deadline for the circuit court appeal?
A: The later of three years from the last day of the tax year, one year from the assessment date, or one year from the locality's final determination.

Q: Did the Department decide whether the tax was correct?
A: No. A notice of jurisdiction decides only that the Department can't hear the case — not whether the assessment is right or wrong.

Citations and references

Statutes:

• § 58.1-3983.1 and § 58.1-3703.1 (the local taxes the Department is authorized to hear on appeal — the meals tax is not among them)
• § 58.1-3980 (local commissioner of the revenue's general jurisdiction over local tax appeals)
• § 58.1-3984 (appeal of a local tax assessment to the circuit court; § 58.1-3981 governs the local final determination)

Public documents referenced: P.D. 13-82 (5/29/2013) and P.D. 17-218 (12/28/2017).

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 20-116

Original ruling text

June 30, 2020

Re: Appeal of Final Local Determination

Taxpayer: *

Locality Assessing Tax: *

Local Food and Beverage Tax

Dear *:

This notice of jurisdiction is issued upon the application for correction filed by * (the “Taxpayer”) with the Department of Taxation. The Taxpayer seeks correction of an assessment of local food and beverage tax issued by *** (the “County”).

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 on-line in the Laws, Rules and Decisions section of the Department’s web site, located at www.tax.virginia.gov .

FACTS

The County issued an assessment of food and beverage tax to the Taxpayer. The Taxpayer filed an appeal with the Department, contending that a portion of its sales were not subject to the tax.

ANALYSIS

Virginia Code §§ 58.1-3703.1 and 58.1-3983.1 authorize the Department to consider appeals of final local determinations of certain taxes. The ability to file an administrative appeal to the Department for a local tax is limited to the Business, Professional and Occupational License (BPOL) tax, business tangible personal property tax, machinery and tools tax, merchant's capital tax, local mobile property tax and consumer utility tax.

DETERMINATION

The Department is not authorized to consider appeals of the local food and beverage tax, commonly known as the meals tax. Therefore, I cannot issue a determination regarding the validity of the meals tax assessments issued to the Taxpayer by the County. See Public Document (P.D.) 13-82 (5/29/2013) and P.D. 17-218 (12/28/2017).

In this case, the applicable jurisdictional statute is Virginia Code § 58.1-3980, which grants local commissioners of the revenue general jurisdiction over appeals involving local taxes, which would include the tax on food and beverages. The Taxpayer may appeal assessments of the meals tax to the circuit court under the provisions of Virginia Code § 58.1-3984 A. In the Taxpayer’s case, such an appeal must be filed with the circuit court: (1) within three years from the last day of the tax year for which the assessments are made, (2) within one year from the date of the assessment, or (3) within one year from the date of the local official’s final determination under Virginia Code § 58.1-3981, whichever is later.

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/3414.B

Related Documents

13-82

17-218