Local business taxes targeted by 2016 legislation

February 2, 2016

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HB 545 (Watts) and SB 218 (Marsden) exclude wages, salaries and other benefits paid by a staffing firm to an independent contractor working on behalf of or for the benefit of the staffing firm’s clients pursuant to a professional employer organization services or temporary help services contract from the gross receipts of the staffing firm for the purposes of the BPOL Tax.

To the extent that the gross receipts of taxpayers are lowered by amounts paid by staffing firms to independent contractors hired for the use of a client company, this bill would have a negative impact on local revenues. In Fiscal Year 2014, the BPOL tax and fee generated approximately $674.3 million for the counties, cities, and towns that imposed the tax.

VACo spoke against the measures in committees and SB 218 (Marsden) was passed by indefinitely in Senate Finance while HB 545 (Watts) will be before House Finance this week.

VACo members, please contact your delegates now to oppose HB 545 (Watts) because of negative impact to local revenues.

House Finance: Ware (Chairman), Orrock, Byron, Cole, Hugo, Cline, Marshall, R.G., Pogge, Head, Farrell, Fariss, Fowler, Bloxom, Taylor, Freitas, Watts, Keam, Filler-Corn, Kory, Sullivan, Murphy, Aird

VACo Contact: Dean A. Lynch, CAE

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