HD15 - Department of Taxation 2018 House Joint Resolution 98 Final Report (HJR 98, 2018)

Executive Summary:

House Joint Resolution 98 was agreed to by the House and Senate in the 2018 Session of the General Assembly. It directed the Department of Taxation (‘the Department’) to study and make recommendations regarding assessment methodologies and the appeals process for businesses disputing determinations of the fair market value of real and tangible personal property. The Department was to complete its meetings by November 1, 2019 and submit to the Governor and the General Assembly an executive summary and a report of its findings and recommendations no later than December 1,2019.

The Department had initial conversations with representatives of 1) the Commissioners of the Revenue Association, 2) the Virginia Municipal League and the Virginia Association of Counties, 3) the Virginia Association of Assessing Officers, and 4) the Virginia Manufacturers Association in order to obtain a candid evaluation of the study issues from each group. The representatives were chosen by each organization. Additionally, a meeting was held at the Department’s offices on October 18, 2019 to allow the representatives designated by the stakeholders to present their positions. Information gathered by the Department at these conversations and the meeting and background information on the current appeals system in Virginia and surrounding states form the basis for this report.

This report explains the current system for assessing and appealing real and personal property in Virginia; examines three recent Virginia Supreme Court cases involving real estate assessment appeals; describes the current appeals process for both real and personal property in Virginia; compares the real and personal property appeals process in surrounding states; and examines recent studies published about relevant property tax issues.

The Department received input from manufacturing representatives, as well as from local officials and organizations that represent local governments. The Department is appreciative of the involvement of all the stakeholders. While many topics were discussed and debated, and evidence was produced from many different sources, there was no consensus among representatives of taxpayers and representatives of local governments on where problems exist within the current system or how to remedy them. Given this lack of agreement on any issue, the Department of Taxation will not issue any recommendations to change the procedures currently in place for appeals of real and personal property assessments. Rather, the Department urges taxpayers and local officials to work together to resolve disputed assessments using the current informal and administrative avenues of appeal in order to avoid litigation.