ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Wednesday, July 3, 1996 TAG: 9607030015
SECTION: EDITORIAL PAGE: A-12 EDITION: METRO
SOURCE: DANIEL G. OAKEY
SINCE THE conclusion of this year's Virginia General Assembly session, there has been much discussion and confusion relating to the business, professional and occupational license tax. During the 1996 session, the tax was amended to establish guidelines for the uniform administration of the tax and to provide relief to some small businesses.
During the past several years, the Roanoke Regional Chamber of Commerce has been actively working behind the scenes for BPOL reform. Prior to the 1994 General Assembly session, the chamber developed a position calling for BPOL's repeal. That position was taken because the BPOL tax is a regressive tax on an individual business or profession's gross receipts, and has nothing to do with a company's profitability. The tax places an unfair burden on businesses - especially small businesses that have a more difficult time when beginning operations.
Local governments within the Roanoke Valley expressed great concern with the chamber's position due to their dependency on the BPOL tax as a major revenue source. Because of those concerns, the chamber modified its position. The new position still calls for the total repeal of the BPOL tax, but only after a suitable and fair revenue source is established by the General Assembly to replace lost revenues.
This position was developed after holding multiple focus groups and meetings with chamber members. The focus groups gave the chamber more in-depth information on the impacts of the BPOL tax on business. Older, more established businesses felt the mechanics of the tax (a tax on gross receipts), not the amount of the tax, to be unfair. Additionally, businesses with multiple locations felt the tax wasn't administered in a uniform manner from locality to locality. Smaller businesses, especially start-up businesses, told us the tax is a ``disincentive'' for starting a business.
The chamber recognizes that local governments are dependent on the revenues generated by the BPOL tax. It also recognizes that local governments must adapt to a changing world and become more competitive in the way they provide services to the community. With this in mind, the Roanoke Regional Chamber has been working with Roanoke County and Roanoke city to define ways to establish greater efficiencies in the operation of government. The goal is to reduce the need for local governments to raise taxes and fees, as well as to reduce their dependency on taxes that discourage job creation. Both the city and county have established goals to accomplish this, and they are making progress. The chamber commends them for this.
The chamber also understands that any time a business issues a check to one of our local governments, whether a fee or a tax, it's money that will not go back into the business.
The question of what do with the BPOL tax will resurface during the 1997 General Assembly session. There is strong support for total BPOL repeal by the legislature without any replacement revenue source. This support comes from Northern Virginia, as well as other urban areas, and is supported by the Virginia State Chamber.
The BPOL tax is now, and always has been, a ``local option'' tax. Many communities in Southwest Virginia and Southside do not even impose a BPOL tax. The decision to raise the BPOL tax, or impose a BPOL tax fee, is the decision of local governments.
To date, several local governments across the commonwealth have taken advantage of the new legislation. Proposals have been approved in some jurisdictions that add fees and/or increase the tax in an effort to raise additional revenues, as opposed to only adjusting the tax to keep the government in a revenue-neutral position. By taking advantage of the latitudes provided by the legislature, local governments may be taking a long-term risk of losing this revenue source forever.
This chamber lobbied hard to provide for meaningful BPOL reform that would provide small businesses a reduction in the taxes they pay while gaining a statewide uniform tax policy. We had partial success. However, the actions by many local governments across the state will only add fuel to the fire for the total repeal of the BPOL tax.
Daniel G. Oakey is vice president of the Roanoke Regional Chamber of Commerce.
LENGTH: Medium: 77 linesby CNB