For property owners across Virginia, the annual real estate tax assessment is more than a routine notice—it is the foundation for your property tax liability. In localities like Fairfax, Loudoun, and Prince William Counties, new buildings are assessed when substantially completed or fit for use, regardless of the calendar date . This means that if you complete a construction project in October, you may receive a partial assessment for the portion of the year the building was in use. Understanding how assessments work, when they are issued, and what rights you have to challenge them is essential for effective property tax management. How Real Property Tax Assessment Works in Virginia The Assessment Process Virginia localities assess real property at fair market value. The Commissioner of the Revenue in each jurisdiction is responsible for determining assessed values and maintaining property records. Under Virginia law, when a new building is substantially completed or fit for use, the Commissioner enters the fair market value in the assessment books . For new construction, the total tax for that year is calculated by combining two components: the tax on the completed building assessment, prorated for the portion of the year the building was in use, and the tax on the assessment as the property existed on January 1 of that year, prorated for the portion of the year it was not yet complete . Partial-Year Assessments The partial assessment provision applies in Arlington, Fairfax, Loudoun, and Prince William Counties, as well as the Cities of Alexandria, Fairfax, Falls Church, Manassas, and Manassas Park . If your locality has adopted the ordinance authorizing partial assessments, you may receive a tax bill for the portion of the year your building was completed. No partial assessment becomes effective until the date and amount are recorded and made available for public inspection. For assessments made after November 1, no penalty for nonpayment is imposed until December 5 or 30 days after the official billing, whichever is later . Real Property Tax Payment Deadlines in DC and Virginia Washington DC Real Property Tax Schedule In the District of Columbia, real property tax bills are paid in two installments. The first half (covering October 1 through March 31) is due by March 31. The second half (covering April 1 through September 30) is due by September 15 . Bills are mailed twice a year: the first-half bill in February, and the second-half bill in August . If you have not received your bill, you should contact the Office of Tax and Revenue. Delayed bills have adjusted due dates, so it is important to verify your specific account status rather than assume a penalty applies . Virginia Locality Deadlines Virginia localities establish their own real property tax due dates. Common schedules include: Fairfax County: Real estate taxes are due in two installments, typically in July and December. Albemarle County: First half due June 25, second half due December 5 . Dinwiddie County: First half due June 5, second half due December 7 . King George County: First half extended to July 6 for 2026 . Property owners should verify deadlines with their local Treasurer’s office, as due dates vary by jurisdiction. Appealing Your Assessment Grounds for Appeal If you believe your property has been over-assessed, you have the right to appeal. Common grounds for appeal include: Incorrect property description (square footage, bedroom count, etc.) Comparable sales that do not support the assessed value Factual errors in the assessment Unequal assessment compared to similar properties The Appeal Process Appeals generally must be filed with the local Board of Equalization or the Commissioner of the Revenue within a specified timeframe after the assessment notice. Deadlines vary by locality, so property owners should act promptly upon receiving their assessment. In Washington DC, the appeal process is administered through the Office of Tax and Revenue. A first-half supplemental assessment may have an October 1 appeal deadline . Property Tax Situs and Leased Equipment Where Property Is Taxed For tangible personal property used in a business, the tax situs is the locality where the property is physically located on the tax day (January 1 in Virginia) . This means that construction equipment, vehicles, and other business assets are taxed in the jurisdiction where they are located and used, not where the business is headquartered. The Virginia Supreme Court has held that situs means more than mere physical presence—property must be used in such a way as to be fairly regarded as part of the property of the locality . Equipment that is casually or incidentally in a jurisdiction is not subject to tax there, but equipment based and used in a locality is. Leased Vehicles and Daily Rentals Virginia law reclassified daily rental passenger cars from tangible personal property to merchants’ capital for local taxation purposes. This means that leasing companies are liable for merchants’ capital tax, not tangible personal property tax, on vehicles leased to daily rental companies . Additionally, daily rental companies are liable for a 2% gross receipts tax on vehicles rented. This tax is separate from the merchants’ capital tax and cannot be offset by a credit for tangible personal property taxes . Business Tangible Property Returns Filing Requirements Businesses in Virginia must file annual returns for tangible personal property. In Fairfax County, businesses located in the towns of Clifton, Herndon, and Vienna must file business tangible personal property returns by May 1 . Augusta County requires individuals and businesses with tangible personal property to file statements by May 1, 2026. The statement details property located in the county as of January 1, 2026 . What to Report Business tangible property includes furniture, fixtures, equipment, computers, machinery, and tools. Vehicles used in business operations are also reportable. Businesses must maintain accurate fixed asset records to ensure complete and accurate reporting. How Nova Tax & Accounting Services Can Help At Nova Tax & Accounting Services, we help property owners and businesses understand their real estate and personal property tax obligations across Virginia and
Nonprofit executive compensation has entered a new era of scrutiny. The One Big Beautiful Bill Act (OBBBA), enacted in July 2025, fundamentally expanded the application of the excise tax on excess compensation paid by tax-exempt organizations. On June 5, 2026, the Treasury Department and IRS issued Notice 2026-36, announcing their intent to issue proposed regulations addressing these significant changes . For nonprofit boards and executives across Virginia and Washington DC, understanding these new rules is essential. The expansion from a narrow “top five” framework to potentially any highly compensated employee represents a fundamental shift in how organizations must monitor and document compensation decisions . This guide examines the new requirements, the governance standards that protect organizations, and practical steps for compliance. Understanding IRC Section 4960: The Foundation The Original Framework Section 4960 of the Internal Revenue Code, enacted as part of the Tax Cuts and Jobs Act in December 2017, imposes an excise tax equal to the corporate tax rate (currently 21%) on remuneration in excess of $1 million or any excess parachute payment paid to a “covered employee” of an applicable tax-exempt organization (ATEO) . Under the original statute, the term “covered employee” was limited to an ATEO’s five highest-compensated employees for the current taxable year or any prior taxable year beginning after December 31, 2016 . Final regulations released in January 2021 provided important exceptions to covered employee status—including the “limited hours,” “nonexempt funds,” and “limited services” exceptions—designed to prevent inadvertent application of the excise tax to employees of related organizations who perform limited or temporary services for the ATEO . The OBBBA Expansion The OBBBA, signed into law on July 4, 2025, significantly expanded the definition of “covered employee.” For taxable years beginning after December 31, 2025, the term “covered employee” now means any employee or former employee of an ATEO, not just the five highest-compensated employees . This means that the excise tax can now apply to remuneration above $1 million paid to any employee of a tax-exempt organization—a significant broadening of the tax’s reach. IRS Chief Executive Officer Frank J. Bisignano stated: “The new law strengthens the accountability of tax-exempt organizations by expanding tax compliance requirements for certain organizations paying excessive compensation and excess parachute payments to their executives. It broadens the scope of tax from a limited group of executives to potentially any highly compensated employee” . Notice 2026-36: Key Guidance for Nonprofits Effective Date Interpretation Notice 2026-36 addresses several key issues relevant to ATEOs navigating this transition. The Treasury Department and the IRS interpret the OBBBA’s effective date provision to broaden the definition of covered employee only for taxable years beginning after December 31, 2025, while retaining the prior, narrower definition for earlier years . Accordingly, the expanded definition includes only: Any individual who was a covered employee under prior law for a pre-2026 taxable year, and Any individual who is an employee of an ATEO in any taxable year beginning after December 31, 2025 (unless a covered employee exception applies) . Without this guidance, there would have been uncertainty as to whether former employees who had been employed by an ATEO in any taxable year beginning after December 31, 2016 would automatically be considered covered employees for post-2025 taxable years, even if they had not been among the five highest-compensated employees in years when the earlier covered employee definition had been in effect . Preservation of Limited Hours and Nonexempt Funds Exceptions The Notice confirms that the forthcoming proposed regulations would provide exceptions from the definition of “covered employee” similar to the “limited hours” and “nonexempt funds” exceptions to the definition of “highest-compensated employee” in the existing regulations . These exceptions were originally adopted to address situations where employees of non-ATEO-related organizations perform limited or temporary services for the related ATEO while receiving no compensation from the ATEO . The Notice acknowledges that with the elimination of the concept of highest-compensated employee from the statute, the exceptions need to be adjusted to remain applicable under the new framework . Elimination of the Limited Services Exception The Notice indicates that the proposed regulations will not retain the “limited services” exception because the concern that motivated it—displacement of an employee who would otherwise have been one of the five highest-compensated employees—is no longer relevant under the broadened definition of covered employee . Prospective Application The proposed regulations are anticipated to be prospective and would not apply to taxable years beginning before the issuance of final regulations . Treasury and the IRS request comments on all aspects of this notice by August 4, 2026 . The Governance Framework: IRC Section 4958 and the Rebuttable Presumption While Section 4960 addresses the excise tax on excess compensation, Section 4958 governs “excess benefit transactions” and provides the governance framework that protects both organizations and executives. Understanding Excess Benefit Transactions Section 4958 applies to public charities and social welfare organizations exempt under IRC Sections 501(c)(3) and 501(c)(4) . It does not apply to private foundations, which are governed by the self-dealing rules under IRC Section 4941. A “disqualified person” for purposes of Section 4958 includes any person who was in a position to exercise substantial influence over the affairs of the organization at any time during the five-year period ending on the date of the transaction . This typically includes the CEO, CFO, COO, and other senior executives with meaningful authority over organizational finances or operations. An “excess benefit transaction” is any transaction in which an economic benefit is provided by the organization to a disqualified person and the value of the benefit exceeds the value of the consideration received by the organization . For compensation, this means the total compensation paid—including salary, bonuses, deferred compensation, fringe benefits, and any other economic benefits—exceeds the fair market value of the services the executive provides. The Excise Tax Consequences The excise tax consequences for excess benefit transactions are significant : The disqualified person pays a 25% excise tax on the excess benefit If the excess benefit is not corrected within
For nonprofit organizations across Virginia and Washington DC, the landscape of grant funding, financial audits, and compliance has shifted dramatically. The Treasury Department’s April 2026 announcement that the IRS plans to revise Form 990 to require clearer reporting on government grants, contracts, and fiscal sponsorship arrangements signals a new era of scrutiny . Treasury Secretary Scott Bessent stated plainly: “Public money and tax-exempt status demand public accountability. We are ending the days of hiding fraud, abuse, and extremist activity behind complicated nonprofit arrangements” . For mission-driven organizations, this means that the systems and documentation supporting grant funding must be stronger than ever. Auditors, funders, and boards are placing greater emphasis on how nonprofits safeguard their finances. Even small teams must show clear review processes and documented checks and balances . This guide provides a comprehensive overview of grant management, financial audit requirements, and compliance obligations for Virginia and DC nonprofits in 2026. Understanding the Grant Life Cycle Grants management is not a single task—it is a series of decisions, handoffs, and checkpoints that span two broad stages: pre-award and post-award . Pre-Award: Planning and Decision-Making The pre-award phase is about identifying opportunities and making informed decisions. Organizations must assess mission alignment, organizational capacity, financial viability, and whether they can produce a competitive proposal . Developing a realistic project budget is critical, and best practice is for program and finance teams to collaborate on the budget with enough time for review before submission. Even when finance only reviews the budget, its involvement helps ensure the numbers are complete, compliant, and manageable once the grant is awarded . Post-Award: Execution, Monitoring, and Compliance The post-award phase includes grant execution, delivery, monitoring, and compliance. The first step should be reviewing, documenting, and communicating to stakeholders the award terms and conditions, including the period of performance . From there, it is critical to ensure the grant is set up properly in the accounting system and that roles and responsibilities are clarified up front. One practical tool worth adopting is a RACI matrix, which maps who is responsible, accountable, consulted, and informed at each stage. Spanning finance, grants management, program, development, legal, and IT, a formal RACI matrix helps operationalize grants management and reduce risk from start to finish . Who Is Responsible for Grants Management? A recurring point is that no single team owns grants management. It is a shared discipline that spans finance, programs, and development, and it works best when those functions stay connected throughout the life of a grant . Finance Owns the Guardrails The finance team owns internal controls, cash management, the general ledger and chart of accounts, financial reporting, and time and effort reporting. How grants are set up in the accounting system is foundational. Every restricted grant should have its own distinct identifier—a grant code, unique class or fund, or project ID—so spending can be tracked cleanly by award . Without that structure, reporting becomes manual and painful. Time and effort reporting is one of the most scrutinized areas in grants management. Salary and benefit costs must be allocated using a documented, reasonable, and consistently applied method that accurately reflects the work performed. Timesheets or activity reports offer the clearest, most defensible support. The method used to allocate salaries must be documented, applied consistently, reviewed regularly, and supported by documentation that someone outside the organization could reasonably follow . Program Teams Manage the Work Program teams implement grant-funded projects and manage resources, vendor and subrecipient relationships, and the project scope of work. They are responsible for confirming that expenses are allowable in the context of the grant . Procurement is another area where audit issues often surface. Program staff must understand that procurement rules apply directly to them, and ongoing training is important because funder requirements or organizational policies can change . Development Keeps the Funder Relationship Strong Development teams own the funder relationship and need to stay in the loop so they are aware of any grant-related issues and can help communicate with a funder as needed. The handoff from development to program and finance teams is a common place for grant details or funder expectations to fall through the cracks . Internal Controls: The Foundation of Grant Compliance Internal controls may not be an exciting topic, but they are foundational to successful grants management. A common refrain is that an organization “has controls, they’re just not written down”—however, auditors generally view undocumented practices as institutional knowledge, not controls. Documented controls help preserve organizational knowledge, promote consistency, and support continuity as teams and responsibilities evolve . Key Controls for Grant Management Authorization and approval: Funders and auditors want to know who can approve grant expenses, what limits apply, and where that is documented. Automated accounts payable workflow solutions create a clear audit trail when set up thoughtfully . Segregation of duties: Ideally, the person requesting a purchase isn’t the one approving and recording it. When staffing is limited, compensating controls such as secondary or board review help, as long as they are documented . Documentation and record retention: Approvals, cost justifications, allocation methodologies, and exceptions must be documented and retained . Reconciliation: Bank and credit card accounts should be reconciled monthly. Nonprofits should also reconcile pledge and contribution activity between the development department and accounting to ensure that promised donations are accurately recorded . Virginia Nonprofit Audit Requirements Virginia law establishes specific thresholds for nonprofit financial reporting that affect grant compliance and tax exemption. The $750,000 Threshold: Financial Review Required To qualify for Virginia’s sales and use tax exemption, a nonprofit organization with gross annual revenue of at least $750,000 in the previous year must provide a financial review performed by an independent Certified Public Accountant . This is a statutory requirement under Virginia Code § 58.1-609.11. The $1.5 Million Threshold: Audit May Be Required Virginia Tax may require an organization with gross annual revenue of at least $1.5 million in the previous year to provide a financial audit performed by an independent CPA in lieu