Does emailing my city about a business tangible personal property tax assessment count as filing a local appeal, so I can then go straight to the Department?

Plain-English summary

A business received a business tangible personal property (BTPP) tax assessment for 2022 that was more than 50% higher than the prior year and believed its property had been overvalued by the city. It appealed directly to the Department of Taxation on that overvaluation theory, mentioning that it had emailed the city about the assessment.

The Department didn't reach the overvaluation question at all. Virginia's local business tax appeal statute requires a taxpayer to first file a formal local administrative appeal with the commissioner of the revenue (or other local assessing official), which triggers a full local review and a written final determination -- only after that final local determination is issued (or after a local appeal has been pending for over a year, with 30 days' written notice to the locality) can the taxpayer bring the dispute to the Department. Here, despite the taxpayer's email to the city, there was no indication any formal local appeal had ever actually been FILED. Because no local appeal existed, the Department had no jurisdiction to decide the overvaluation dispute on the merits at all -- it sent the case back, instructing the taxpayer to file a proper local appeal with the city first, after which the city must issue a final local determination in the required format, and only then (or after the one-year pending threshold) would a further Department appeal become available.

What this means for you

Businesses disputing a local BTPP (or similar local business) tax assessment

An email or informal complaint to your locality about an assessment you disagree with does NOT substitute for filing the formal local administrative appeal required by Va. Code § 58.1-3983.1. Confirm you're actually filing a recognized "appeal" under the statute -- not just raising a concern informally -- before assuming you can escalate to the Department.

Anyone planning to skip straight to the Department of Taxation on a local tax dispute

You generally can't -- the Department has no jurisdiction until either (a) the locality issues a final local determination after a properly filed local appeal, or (b) your local appeal has been pending more than a year and you've given the locality 30 days' written notice that you're electing to treat it as denied.

Accountants and tax professionals

Before advising a client to escalate a local tax valuation or classification dispute to the Department, verify a genuine local appeal was actually filed (not just informal correspondence) and that either a final determination has issued or the one-year pending threshold has been met.

Common questions

Q: Does emailing my locality about a tax assessment count as filing a local appeal?
A: Not based on this ruling -- informal correspondence isn't the same as filing the formal local administrative appeal required under Va. Code § 58.1-3983.1 B.

Q: When can I appeal a local business tax dispute directly to the Virginia Department of Taxation?
A: Only after the locality has issued a final local determination following a properly filed local appeal, or after your local appeal has been pending for more than a year and you've given the locality 30 days' written notice electing to treat it as denied.

Q: What happens if I try to appeal to the Department without first filing a proper local appeal?
A: As here, the Department will find it lacks jurisdiction and send the case back, requiring you to file the local appeal first.

Q: How long does a locality have to issue a final determination after a local appeal is filed?
A: This ruling doesn't specify a fixed number of days for BTPP appeals, but directs the locality to fully review the claim and issue a written determination; if that process stalls for over a year, the taxpayer gains the option to escalate to the Department with proper notice.

Citations and references

• Va. Code § 58.1-3983.1 B (local appeal filing procedure and deadline)
• Va. Code § 58.1-3983.1 D (Department jurisdiction only after final local determination)
• Va. Code § 58.1-3983.1 B 6 (direct appeal to Department if local appeal pending over 1 year, with 30-day notice)
• Guidelines for Appealing Local Business Taxes, P.D. 04-28 (6/25/2004)

Subject

Administration: Local Appeal - Jurisdiction, Required Procedures

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 23-34

Original ruling text

March 29, 2023

Re: Notice of Jurisdiction

Taxpayer: *

Locality Assessing Tax: *

Business Tangible Personal Property (BTPP) Tax

Dear *:

This notice of jurisdiction is issued upon the application for correction filed by * (the “Taxpayer”) with the Department of Taxation. The Taxpayer appeals an assessment of Business Tangible Personal Property (BTPP) tax issued to the Taxpayer by *** (the “City”) for the 2022 tax year.

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

FACTS

The Taxpayer received an assessment of BTPP tax for the 2022 tax year that was more than 50% greater than the prior tax year. The Taxpayer filed an appeal with the Department, contending that the property at issue was overvalued by the City.

ANALYSIS

A taxpayer assessed with BTPP tax may appeal such assessment within one year from the last day of the tax year for which such assessment is made, or within one year from the date of the assessment, whichever is later, to the commissioner of the revenue or other local assessing official. See Virginia Code § 58.1-3983.1 B 1. If a taxpayer wishes to appeal an assessment from a locality to the Department, it must first file a local administrative appeal pursuant to the process set forth in Virginia Code § 58.1-3983.1 B. Once a proper local appeal has been filed, the locality must undertake a full review of the taxpayer’s claims and issue a written determination setting forth the facts and analysis in support of the locality’s decision. Pursuant to Virginia Code § 58.1-3983.1 D, only when a final local determination has been issued can a taxpayer file an administrative appeal with the Department if it wishes to contest any of the locality’s conclusions. Alternatively, a taxpayer may file an appeal with the Department if its appeal with the locality has been pending for more than one year and it provides the locality with at least 30 days written notice. See Virginia Code § 58.1-3983.1 B 6.

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. Although the Taxpayer states that it emailed the City with regards to the assessment, there is no indication that a local appeal has ever been filed with the City.

DETERMINATION

Because no local business tax appeal was filed, the Taxpayer must first file an appeal to the City pursuant to Virginia Code § 58.1-3983.1 and the Guidelines. Should the Taxpayer do so, the City should issue a final local determination in accordance with the Guidelines’ prescribed format for final local determinations. Once a final local determination is issued, the Taxpayer will have 90 days to file an appeal with the Department if it disagrees with the outcome. If the case has been pending with the City for more than one year, the Taxpayer may also appeal to the Department after giving the City the requisite notice.

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/4352.B

Related Documents

04-28