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Supervisors vote down increase in business tax threshold - Loudoun supervisors on Oct. 4 voted down a proposed plan to increase the county’s Business, Professional and Occupation License Tax gross receipts threshold from $200,000 to $500,000
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Loudoun County Politics
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Date: October 05, 2011 12:39PM
Supervisors vote down increase in business tax threshold
Tuesday, Oct. 4 by Crystal Owens
http://loudountimes.com/
Loudoun supervisors on Oct. 4 voted down a proposed plan to increase the county’s Business, Professional and Occupation License Tax gross receipts threshold from $200,000 to $500,000.
The 4-5 vote came after advocates of the change said it was needed to attract new business into Loudoun County.
However, supervisors against the change said Loudoun is already competitive with neighboring jurisdictions and has one of the most generous thresholds in the region.
Vice-Chairman Susan Klimek Buckley (D-Sugarland Run) and Supervisors Jim Burton (I-Blue Ridge), Sally Kurtz (D-Catoctin), Stevens Miller (D-Dulles) and Kelly Burk (D-Leesburg) voted against the increase.
“I haven’t seen the evidence as to why we’re looking at it today other than what Chairman York often refers to as ‘This is silly season’,” Buckley said, referring to the election 2011 season.
Buckley argued that changing the threshold amount would not have changed the concern of a sudden increase in tax liability.
“If you change the amount to $500,000 a company one penny over that will pay an increase in taxes of approximately 2,700 percent,” she said .
The tax is expected to generate more than $22 million in general fund revenue based on the county’s adopted fiscal 2012 budget.
“That revenue is needed. I don’t think anybody has to be convinced of that,” Buckley said.
Burk unsuccessfully tried to compromise on the threshold, proposing an increase from $200,000 to $300,000.
“We’re still raising it above what some of the other localities are, but we’re not going to an extreme by taking it to $500,000,” Burk said.
Businesses with annual gross receipts of $200,000 or less in Loudoun County are required to pay a $30 license fee. However, businesses with gross receipts more than $200,000 are subject to taxes ranging from 3 cents to 33 cents per $100 of gross receipts, according to Commissioner of the Revenue Bob Wertz.
Burton, chairman of the county’s Finance and Government Services Committee, said Loudoun is one of the most “generous jurisdictions around on this threshold.”
Fairfax County and Prince William County’s thresholds are $100,000.
“Even at $200,000 as a threshold, business communities on BPOL taxes contribute about 2 percent of our tax revenue. To me that is not an overbearing burden. By raising it to $500,000 there will be reduced tax revenue to the county,” Burton said.
But supervisors in favor of increasing the threshold said they believed it would make Loudoun more business friendly and give starter companies a chance to get ahead.
“Part of the concern here is trying to be a little bit competitive with Fairfax. They do have lower property taxes than we do and, quite frankly, we’re trying to expand our commercial tax base, and I believe … the idea is to try and help businesses locate here in Loudoun County,” said Chairman Scott York (R-At-Large).
Small businesses, according to Supervisor Andrea McGimsey (D-Potomac) are the county’s bread and butter and contribute a lion’s share toward Loudoun’s economic development.
“We have a lot of challenges ahead of us and I am willing to support this and send the message that we want them here. It’s a good place to do business,” McGimsey said.
Supervisor Lori Waters (R-Broad Run) said members of the business community for years have complained to her that they would like to see the business tax based on profits rather than gross receipts.
“A lot of them are facing the situation where while their gross receipts seem high, they’re not making money yet,” Waters said.
She said she would like to see the county move to taxing businesses’ net income, rather than their gross income.
“I don’t view it as lost revenue, I view it as it was their money to begin with,” Waters said.
Tuesday, Oct. 4 by Crystal Owens
http://loudountimes.com/
Loudoun supervisors on Oct. 4 voted down a proposed plan to increase the county’s Business, Professional and Occupation License Tax gross receipts threshold from $200,000 to $500,000.
The 4-5 vote came after advocates of the change said it was needed to attract new business into Loudoun County.
However, supervisors against the change said Loudoun is already competitive with neighboring jurisdictions and has one of the most generous thresholds in the region.
Vice-Chairman Susan Klimek Buckley (D-Sugarland Run) and Supervisors Jim Burton (I-Blue Ridge), Sally Kurtz (D-Catoctin), Stevens Miller (D-Dulles) and Kelly Burk (D-Leesburg) voted against the increase.
“I haven’t seen the evidence as to why we’re looking at it today other than what Chairman York often refers to as ‘This is silly season’,” Buckley said, referring to the election 2011 season.
Buckley argued that changing the threshold amount would not have changed the concern of a sudden increase in tax liability.
“If you change the amount to $500,000 a company one penny over that will pay an increase in taxes of approximately 2,700 percent,” she said .
The tax is expected to generate more than $22 million in general fund revenue based on the county’s adopted fiscal 2012 budget.
“That revenue is needed. I don’t think anybody has to be convinced of that,” Buckley said.
Burk unsuccessfully tried to compromise on the threshold, proposing an increase from $200,000 to $300,000.
“We’re still raising it above what some of the other localities are, but we’re not going to an extreme by taking it to $500,000,” Burk said.
Businesses with annual gross receipts of $200,000 or less in Loudoun County are required to pay a $30 license fee. However, businesses with gross receipts more than $200,000 are subject to taxes ranging from 3 cents to 33 cents per $100 of gross receipts, according to Commissioner of the Revenue Bob Wertz.
Burton, chairman of the county’s Finance and Government Services Committee, said Loudoun is one of the most “generous jurisdictions around on this threshold.”
Fairfax County and Prince William County’s thresholds are $100,000.
“Even at $200,000 as a threshold, business communities on BPOL taxes contribute about 2 percent of our tax revenue. To me that is not an overbearing burden. By raising it to $500,000 there will be reduced tax revenue to the county,” Burton said.
But supervisors in favor of increasing the threshold said they believed it would make Loudoun more business friendly and give starter companies a chance to get ahead.
“Part of the concern here is trying to be a little bit competitive with Fairfax. They do have lower property taxes than we do and, quite frankly, we’re trying to expand our commercial tax base, and I believe … the idea is to try and help businesses locate here in Loudoun County,” said Chairman Scott York (R-At-Large).
Small businesses, according to Supervisor Andrea McGimsey (D-Potomac) are the county’s bread and butter and contribute a lion’s share toward Loudoun’s economic development.
“We have a lot of challenges ahead of us and I am willing to support this and send the message that we want them here. It’s a good place to do business,” McGimsey said.
Supervisor Lori Waters (R-Broad Run) said members of the business community for years have complained to her that they would like to see the business tax based on profits rather than gross receipts.
“A lot of them are facing the situation where while their gross receipts seem high, they’re not making money yet,” Waters said.
She said she would like to see the county move to taxing businesses’ net income, rather than their gross income.
“I don’t view it as lost revenue, I view it as it was their money to begin with,” Waters said.