Woolford v. Virginia Dep't of Taxation, 294 Va. 377

Background

The Woolford family owned a 450-acre King William County farm with significant unmined sand-and-gravel deposits; they donated a conservation easement (recorded Nov. 11, 2011) to the Virginia Outdoors Foundation that prohibited mining.
The Woolfords sought land-preservation tax credits under Va. Code §§ 58.1-512 and 58.1-513 based on an appraisal by Michael Simerlein valuing the fee estate at $13.5M and the easement at $1.07M (a $12.43M reduction). The Department initially awarded $4.972M in credits.
The Department later questioned the appraisal, the Woolfords submitted a revised appraisal reducing the easement value to $10.18M, and the Department ultimately rescinded all credits citing speculative analysis, conflicting data, lack of qualifications, and statutory noncompliance.
The Department moved for summary judgment arguing Simerlein was not a “qualified appraiser” under Code § 58.1-512(B) (which incorporates federal law definitions). The circuit court granted summary judgment for the Department on that ground.
On appeal, the Supreme Court of Virginia reviewed whether Simerlein met the federal "qualified appraiser" standard (including verifiable education/experience in the type of property appraised), whether the Department could audit after initial award, and other valuation/zoning issues remanded for further proceedings.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Simerlein was a “qualified appraiser” under Code § 58.1-512(B) (incorporating 26 U.S.C. § 170(f))	Simerlein’s Virginia appraiser license (general real estate) sufficed; IRS transitional guidance supports that a licensed real-property appraiser meets minimum reqs	License alone insufficient; statute also requires verifiable education/experience in valuing the specific type of property	Court reversed: Simerlein was a qualified appraiser based on his experience, investigations, and reliance on technical experts; trial court erred in finding him unqualified
Whether the Tax Commissioner is barred from challenging an appraisal if he does not request a second appraisal within 30 days after application	If Commissioner fails to request a second appraisal within 30 days, the appraisal’s value is final and not subject to later challenge	The 30-day provision governs completion of the application process, not the scope of later audits	Held for Defendant: 30-day rule affects application completeness, not the Commissioner’s later audit authority
Whether Department may only disregard an appraisal if it is false or fraudulent (per § 58.1-512(B))	Because appraisal was not false or fraudulent, Department cannot disregard it and must accept valuation	§ 58.1-512(B) authorizes disregarding false/fraudulent appraisals but does not limit broader audit authority to challenge other flaws	Held for Defendant: statute does not restrict audits to only false/fraudulent findings; Department may audit and adjust credits based on other appraisal flaws
Whether other valuation and statutory issues require further review (e.g., mining permit/interest, 25% vs 40% credit, zoning consistency, market demand)	Woolfords contend appraisal supports claimed credit and mining-related value	Department contends prospective mining interest may not qualify for full credit, zoning/permitting limits reduce credit, and appraisal overstated market/demand	Court remanded for resolution of these factual and statutory valuation issues; Woolfords are entitled to some credit unless proven value is zero

Key Cases Cited

Jones v. Williams, 280 Va. 635 (statutory interpretation reviewed de novo)
Syed v. ZH Techs., Inc., 280 Va. 58 (same)
Tax Analysts v. IRS, 416 F. Supp. 2d 119 (administrative guidance not carrying force of law)
Horner v. Dep’t of Mental Health, 268 Va. 187 (previous cross-error assignment rule discussed)
Virginia Marine Res. Comm’n v. Clark, 281 Va. 679 (cross-error/assignment jurisprudence)
Alexandria Redevelopment & Hous. Auth. v. Walker, 290 Va. 150 (modern standard on when appellee must cross-appeal)
Jennings v. Stephens, 135 S. Ct. 793 (U.S. Supreme Court guidance on cross-appeal principles)