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Business Tax Compliance - Inspections and Audits
OVERVIEW
The Business Tax Compliance team is a division within the Tax Administration Division in the Department of finance. The purpose of the Business Tax Compliance team is to obtain, maintain, and achieve tax compliance with all Prince William County business tax laws, through the examination of filed tax returns, identification of non-filers, and unreported tax revenue, and educate business owners regarding tax liability in Prince William County, encourage voluntary compliance with tax laws, discover businesses that are not currently registered and may be unaware of tax obligations, and properly assesses businesses that may be attempting to evade taxes.
The following types of audits are administered by the Tax Compliance team:
- Business Professional and Occupational License (BPOL)
- Business Personal Property Tax (BPPT)
- Machinery and Tools Tax
- Transient Occupancy Tax
- Short Term Rental Tax
- Food and Beverage Tax
The Compliance team is responsible for investigating businesses through desk and field reviews to ensure that business owners are properly registered, taxed in a fair and equitable manner, so that all businesses of the same type, are taxed in the same fashion, and to ensure that businesses are properly classified for Business Professional and Occupational License (BPOL) tax rates.
For a business to be in compliance with Prince William County business tax requirements, all BPOL filings and payments must be submitted each year by March 1st. Business owners, including home-based businesses making more than $500,000 in a calendar year, are required to submit a business license application renewal and payment by March 1st.
In addition, business owners are required to file a Business Tangible Personal Property Tax returns by April 15th, with a current asset list of all property purchased or acquired by their business annually.
The Tax Administration division encourages all business tax filings to be completed online. Failure to maintain current business tax filings can result in audit, statutory assessments, and other penalties as prescribed by law.
For questions and additional information, or if you have a concern regarding the tax status of a business operating within Prince William County, you may contact the Business Tax Compliance Division at 703-792-6710 or e-mail to [email protected]
Additional Resources
INSPECTIONS
Business Tax Inspectors review tax accounts of and perform field visits to newly opened and existing businesses to ensure filing of returns and conduct outreach for businesses that appear to not be complying.
Generally, inspections are performed by geographic area to ensure efficiency. During site visits, inspectors may take pictures of businesses (inside and out) and any business equipment located at the business and try to gather as much relevant information as possible to determine if a tax liability exists.
Once an inspector determines that a business is not in compliance, an engagement letter is mailed to the business requiring to comply. If a business fails or refuses to comply, a statutory assessment is made based on the best available information as required by the Virginia Code and Prince William County statutes. The statutory assessment may or may not reflect market value or the business gross receipt and may result in an assessment that is higher than the actual business gross receipts or business equipment costs.
AUDIT PROCESS
Business Tax Compliance Auditors regularly perform audits and respond to appeals to correct tax rate classification, exclusions, deductions, and filing amendments. Audits are performed to ensure that taxpayers comply with Prince William County statutes. If your return is audited, you will be required to substantiate the information listed on your tax return.
Audits are done by mail or through personal interviews with auditors. You have the right to request that the audit be conducted at a time and place convenient for you and the auditor. Businesses that receive audit notifications should follow all directions in the notification and contact the assigned auditor for further instruction. Failure to comply with an audit request could result in a summons to appear before the Tax Administration division. All communication with the Business Tax Compliance office will be kept confidential in accordance with Virginia Code § 58.1-3.
Businesses are entitled to a fair audit and an explanation of any changes we propose to your tax return. Businesses may represent themselves or have someone represent them when their return(s) are audited. You have a right to know which records you will need to verify or support, prior to any audit meeting.
The auditor will inform you of the types of records you should have available and will explain the planned audit method and procedures. The audit will be conducted in a timely manner and the auditor will review the results with you. You will receive written notice detailing any adjustments made to your tax return and any balance due or additional refund. We will provide you with a copy of the audit-work papers and explain your appeal rights. Audits do not necessarily result in additional taxes.
GUIDELINES FOR APPEALING LOCAL BUSINESS TAXES
Taxpayers can appeal business tax assessments using the Guidelines for Appealing Local Business Taxes. The appeal process begins when a taxpayer files an application with the County’s Tax Compliance Manager. The Tax Compliance Manager reviews the application, makes a determination, and informs the taxpayer in writing. If dissatisfied with the results of the local review, taxpayers have the option to file an appeal with the Tax Commissioner of the Commonwealth of Virginia for a final decision.
HOW TO FILE AN APPEAL
Instructions for filing an appeal are included in the Guidelines for Appealing Local Business Taxes. Taxpayers are to follow the instructions in the guide when applying for a tax assessment review. It is the taxpayers' responsibility to ensure that their appeal is submitted on time, that all requirements are met, and that the submitted information is correct. Failing to adhere to these standards could result in the appeal being rejected.
SEND APPEALS TO:
Tax Compliance Manager
Tax Administration Division - 1st Floor
Prince William County
1 County Complex Court
Prince William, VA 22192TIMELINES
There are strict appeal submission timeline limitations that must be followed (see guide for details). When mailing an appeal, it is "filed" as of the date it is postmarked. If filing close to an expiration period, it is encouraged that the appeal be hand delivered or be submitted by a method that creates a receipt noting the date the appeal was received by the Tax Administration Office.
APPEAL CRITERIA
Although this list is not exclusive, appeals generally fall into one of three categories:
- Rate of Tax
- Amount of Tax; including additional or omitted taxes due
- Assessment Mechanism (for example...)
- Business classification assigned by the County
- Location or status of tangible property
- Method of valuation
ASSISTANCE
Answers to questions and requests for a hard copy of the Guidelines for Appealing Local Business Taxes are available by calling 703-792-6710 or by emailing [email protected].
More information is available at the Virginia Department of Taxation website.
