A bill to reduce local revenue collections is among a growing list of pre-filed legislation to be considered in the upcoming General Assembly session. SB 836 (Chase) requires that a locality tax businesses based on “Virginia taxable income” rather than “gross receipts,” which is the current practice. Such a mandate would have a significant fiscal impact on the 48 counties that employ the Business Professional Operating License (BPOL) tax.
A technical report by Virginia’s Join Legislative Audit Review Commission (JLARC) in 2013 found that changing the basis of the BPOL tax from gross receipts to income (when compared to actual 2012 collections) would reduce local revenue from the tax by approximately 95 percent. The report also concluded that such a change “… would make the tax more difficult for businesses to understand and comply with, and would require more resources for local governments to administer.”
VACo opposes the bill and urges its members to contact their state representatives.