The Senate Finance Committee will consider SB 836 at its Jan. 18 meeting, which starts at 9 a.m.  This bill would require localities to base BPOL on the Virginia taxable income of a business.  Under current law, a locality has the option to impose the tax upon gross receipts or Virginia taxable income.

Who to Contact: Members of the Senate Finance Committee

Talking points:

• A 2013 study done by the legislature’s Joint Legislative Audit and Review Commission (JLARC) concluded that changing the basis of the tax from gross receipts to net income would reduce local revenue from the tax by about 95 percent!
• Because so many businesses would no longer be paying BPOL, the rates would have to increase to 5 percent, which would be an average tax increase of 40 percent on profitable businesses still subject to the tax.
• Changing the basis of the tax to net income would make the tax more difficult for businesses to understand and costly for localities to administer.
• In 2015, localities collected $683.9 million in BPOL taxes.  SB 836 does not provide an alternative revenue source.  Nor does it include any provisions to reduce local costs in carrying out state mandates in public education and other areas.

VML contact: Neal Menkes (nmenkes@vml.org)