I sold my business years ago, but the county still assessed ME for tangible personal property tax on it for years after the sale -- can I appeal that dispute to the state Department of Taxation?

Plain-English summary

This ruling is a "Notice of Jurisdiction" -- the Department deciding it can't rule on a dispute at all -- and it draws an important line for anyone who sold a business and later got hit with tax bills for it anyway: the Department's local-tax appeal process fixes tax CALCULATIONS, not ownership disputes.

A county assessed business tangible personal property tax against a business for the 2016 through 2020 tax years. The former owner appealed to the county, explaining she had sold the business in July 2016 and shouldn't be liable for the tax in the years after the sale. The county made a small adjustment (accounting for a new business later operating at the same location) but otherwise upheld the assessment, and the owner then took her appeal to the Department.

The Department explained that its jurisdiction over local business tax appeals is defined by Virginia's Guidelines for Appealing Local Business Taxes: it can review whether an "assessment" -- the tax rate applied, the taxable base, and the resulting amount due -- was calculated correctly. The former owner never argued the tax CALCULATION was wrong; her whole argument was that she wasn't the right PERSON to be billed at all, because she'd sold the business years earlier. Because identifying who is legally responsible for an assessment falls outside what the local appeals process is designed to resolve, the Department found it had no jurisdiction to decide her case, leaving her stuck without a path forward through this particular channel.

The Department did add a pointed aside to the county: its final determination letter hadn't properly explained the facts and legal basis for its position on each point the taxpayer raised (as Virginia's Guidelines require), and it wasn't clear the letter had been signed by the properly designated local official. None of that changed the jurisdictional outcome for this taxpayer, but it put the county on notice to clean up its own process for future appeals.

What this means for you

Anyone assessed for a business tax after selling or closing the business

If your dispute is really about WHO should be billed -- not whether the tax amount itself is calculated correctly -- the Department's local business tax appeal process likely can't resolve it. You'll need a different avenue (potentially a direct dispute with the locality, or another legal process) to establish that you're not the responsible party.

Sellers of businesses generally

This is a cautionary tale: get clear, documented, and ideally recorded confirmation with the locality at the time of a business sale that tax responsibility has transferred to the new owner. Waiting years to raise a "I don't own this anymore" argument, especially through a process not designed to decide ownership questions, can leave you without an effective remedy.

Localities and their tax offices

Even when the Department ultimately lacks jurisdiction over the underlying dispute, it will still flag procedural problems with a locality's own final determination letters (missing legal reasoning, unclear signing authority) as a reminder to follow the Guidelines properly.

Common questions

Q: I sold my business, but the county is still billing me for tangible personal property tax years later -- can the Department fix this?
A: Not through this appeals process. The Department can only review whether the tax assessment itself was calculated correctly; it doesn't have jurisdiction to decide who is the legally responsible taxpayer.

Q: What does the Department's jurisdiction over local business tax appeals actually cover?
A: Whether the "assessment" -- the tax rate applied, the taxable measure, and the resulting amount due -- was determined correctly. Ownership and successor-liability questions fall outside that scope.

Q: Does it matter if the county's own local appeal process had problems?
A: It can be worth flagging (as the Department did here regarding the county's determination letter), but it won't change a jurisdictional outcome if the underlying dispute itself isn't something the Department has authority to decide.

Citations and references

• Va. Code § 58.1-3983.1 B (procedure for appealing local business tax assessments to the Department)
• P.D. 04-28 (6/25/2004) (Guidelines for Appealing Local Business Taxes; defines "assessment" and required contents of a local determination)
• P.D. 19-62 (6/17/2019) (final local determinations must be issued and signed by the properly authorized chief assessing officer, or an expressly designated employee with proof of that designation)

Subject

Tangible Property : Administration - No Jurisdiction

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 22-23

Original ruling text

February 08, 2022

Re: Notice of Jurisdiction

Taxpayer: *

Locality: *

Business Tangible Personal Property Tax

Dear *:

This notice of jurisdiction is issued upon the application for correction filed by * (the “Taxpayer”) with the Department. The Taxpayer appeals an assessment of business tangible personal property tax issued to the Taxpayer as the owner of (the “Company”) by ** (the “County”) for the 2016 through 2020 tax years.

The following determination is based on the facts presented to the Department summarized below. The Code of Virginia section and public documents cited are available online 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 business tangible personal property taxes to the Company for the 2016 through 2020 tax years. The Taxpayer appealed to the County, contending she sold the Company in July 2016. The County made a small adjustment to the assessment because a new business was operating in the Company’s location but upheld the remaining balance of the assessment. The Taxpayer then filed an appeal with the Department.

ANALYSIS

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 Guidelines define an assessment as a “determination as to the proper rate of tax, the measure to which the rate is applied, and ultimately the amount of tax . . . that is due.” In addition, the Guidelines require that a taxpayer’s appeal include a statement explaining why the assessment is erroneous. The Taxpayer did not allege any error in the determination of the amount of local business property tax due, rather she asserted that she was not responsible for the tax because she sold the Company in 2016. The Department has jurisdiction in local business property tax cases to resolve alleged errors in assessments. The proper identification of the person responsible for the assessment is beyond the scope of the local appeals process.

DETERMINATION

For the reasons stated above, the Department lacks jurisdiction to address this appeal. The County, however, is reminded that the chief assessing officer, in this case the County’s Commissioner of the Revenue, is required to issue and sign final local determinations. Employees working under the direction of a local Commissioner of the Revenue or other chief assessing officer are not permitted to issue final determinations unless expressly designated by such officer and proof of such designation is included with the final local determination. See P.D. 19-62 (6/17/2019). Further, in this case, the County’s final determination did not set forth the facts and legal authority in support of the County’s position on each point raised by the Taxpayer as required by the Guidelines. Although, as stated above, the Department lacks jurisdiction in this case for other reasons, the County should ensure proper local appeals procedures are being followed generally.

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/4009.X

Related Documents

04-28

19-62