Several dozen business owners urged Stafford County officials to reject a business tax last night that they said would drive up their costs and could even force some to close their doors.
The Board of Supervisors held a public hearing on the Business, Professional and Occupational License Tax.
BPOL is a tax on businesses' gross receipts. Supervisors considered charging half the maximum rate allowed by state law at a $100,000 threshold.
Supervisors had not voted on the tax at press time.
Critics of the levy argued it's unfair because gross receipts don't factor in expenses. And during an economic slump, many local businesses said an additional tax could force them to raise their prices, downsize their staffs and negatively impact the services they provide.
BPOL will wipe out many of us who are holding on during desperate times, said attorney Holly Hazard.
Stafford business owners already are facing higher tax bills because of a 28 percent increase in commercial property values during a recent reassessment.
If enacted, the tax could generate about $2.6 million each year in revenue. BPOL would replace the Merchants Capital Tax, which brought in about $800,000 in 2006. State law prohibits localities from charging both taxes.
BPOL supporters argued it will provide needed revenue. The county has cut its spending because of declining sales and real estate tax revenue. They said that revenue generated from the tax could fund county services such as the schools system, public safety and roads.
"There is a limit to how much we can do to accommodate for the shrinking county budget," said one BPOL advocate. "Revenue in general is a problem that Stafford County has to address. Our kids are worth it."
Stafford is one of the only area localities that does not charge BPOL. The counties of Spotsylvania, Fairfax, Prince William, Loudoun and the city of Fredericksburg charge the tax.
State law exempts some businesses, including insurance companies, banks and media organizations.
It would not affect major Stafford employers such as GEICO, said Garrisonville Supervisor Mark Dudenhefer.
"The largest non-governmental employer in Stafford isn't going to pay," he said. Other supervisors were concerned the tax could deter the business growth Stafford has enjoyed over the years.
Kafia Hosh: 540/735-1977
Email: khosh@freelancestar.com
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The BPOL tax is on gross receipts from a business. Localities can set a minimum amount of gross income before the tax would kick in, which could end up exempting some mom-and-pop stores.
Localities can set different tax rates for different types of businesses, and don't have to charge the full amount allowed by law. Spotsylvania, for example, charges half the rate allowed. Stafford already charges 14 different business-related taxes. For example, the business property tax is on everything a firm owns, including computers, desks and other materials. --Kafia Hosh |