Chase sponsors 'costly' BPOL bill
Senate Bill 836, a bill proposed by 11th District Sen. Amanda Chase which would require localities to base the Business, Professional and Occupational License (BPOL) tax on state taxable income, was due to go before the Virginia Senate Finance Committee yesterday (Wednesday, Jan. 18). According to the Virginia Association of Counties (VACo), the change could reduce a locality's BPOL revenue by as much as 95 percent.
VACo calls SB 836 “costly” to counties.
State law currently allows cities and counties to choose whether to impose the tax based on gross receipts or Virginia taxable income. Sen. Chase's bill would take that option away from localities.
In a 2013 study, the legislature's Joint Legislative Audit and Review Commission (JLARC) concluded making localities base the BPOL on net income would reduce local BPOL revenues by about 95 percent.
VACo contends this bill, if passed, would reduce the number of businesses paying the BPOL and localities would have to raise the BPOL rate by five percent, making the average BPOL tax a profitable business pays 40 percent higher. In addition, VACo advises the tax would be more difficult for businesses to understand and make administration of the BPOL more costly.
The bill has no provisions for alternative revenue sources, VACo noted. Nor are there any provisions to reduce local costs in carrying out state mandates in public education and other areas.
Amelia County Commissioner of the Revenue Laura Walsh told The Monitor that like most localities, Amelia bases the BPOL tax on a business' gross receipts. Last year the county collected $192,131 in BPOL tax revenues, she said. While she did not know that SB 836 would mean a 95 percent reduction in those monies, it would “greatly reduce” that revenue. She added that revenue would have to be made up somewhere, either an increase in the BPOL tax rate itself or a general tax increase which would likely include personal property and/or real estate taxes.
In 2015 $683.9 million was collected in BPOL taxes statewide.
Asked for a comment, Sen. Chase responded, “It's not fair to tax businesses on the gross receipts. Instead it should be on profits. Our current system adds insult to injury to our small business owners. Most states don't even have this tax.”
Senate District 11 includes part of Chesterfield County, all of Amelia and the city of Colonial Heights.
Sen. Chase's district office telephone number is (804) 212-2005; her capitol phone is (804) 698-7511; and her email address is district11@ senate.virginia.gov.
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