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Bill seeks to alter rules for BPOL tax
BPOL still a bone of contention

Date published: 12/5/2010

By Chelyen Davis

The BPOL tax, unpopular with businesses, will be back up for debate in the upcoming legislative session.

Del. Mark Cole, R-Spotsylvania, has submitted a bill that would let localities that do impose the Business, Professional and Occupational License tax decide whether to tax gross receipts or Virginia taxable income.

It's similar to a bill he submitted for the 2010 session, which wasn't approved.

Last session, Cole also put in a bill that would have frozen BPOL rates in any county that imposed the tax, and prevented those without a BPOL tax from imposing it in the future.

That bill passed the House overwhelmingly but failed to pass in the Senate.

When the 2010 session began, Stafford County was wrestling with the unpopularity of its new BPOL tax.

The county eventually repealed the tax, but other localities, including Spotsylvania County, still levy it.

While the BPOL tax brings counties much-needed revenue, businesses don't like it because it is a tax on their gross receipts--whether they make a profit or not.

Cole has said that's unfair, because even a company that's losing money would have to pay the tax.

"BPOL can become a job killer, especially for small business," he said on his website.

Spotsylvania County Supervisor Hap Connors said Cole's new bill sounds like something the county has been pushing for a while.

"The biggest complaint we hear about BPOL is it's unfair to tax gross receipts," Connors said.

Changing the way BPOL is imposed, such as taxing net receipts instead of gross receipts, is something Connors thinks the business community would see as fair.

He hopes there will not be an attempt this year to freeze or eliminate the BPOL tax, because doing so would put further limits on localities' ability to generate revenue.

"About a quarter of our property tax is going to pay for unfunded mandates and obligations of the state" in public education, public safety and transportation, Connors said. "If they take away this source of revenue outright, then that means we're going to have to cut those services by a great amount of money, or raise the property tax."

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