Stafford approves BPOL levy to help fund road improvements, ease tax burden on homeowners

Date published: 7/3/2008

BY KAFIA HOSH

A new business tax in Stafford County will help pay for improvements to the county's clogged roads.

The Board of Supervisors voted 4-3 early yesterday morning to implement the Business, Professional and Occupational License Tax, despite objections from the business community.

BPOL is a tax on business's gross receipts. The county will charge half the maximum rate allowed by state law, exempt the first $200,000 per business and cap the tax collected from each business at $150,000 a year.

The new levy, which takes effect Jan. 1, 2010, will replace the merchants capital tax, which brought in about $830,000 in 2007. State law prohibits localities from charging both.

The BPOL tax could generate an estimated $2.3 million to $2.6 million annually, according to Commissioner of the Revenue Scott Mayausky.

Supervisors Cord Sterling, Paul Milde and Mark Dudenhefer voted against the tax.

The entire board, however, agreed that revenue generated by BPOL will be used to upgrade county roads and help pay the debt service on a potential transportation bond.

Sterling said roads are the county's top problem and using the tax to improve them "would at least help the business community in part."

Critics of the levy argued that it's unfair because gross receipts don't factor in expenses. Hundreds of people, including several dozen business owners, attended a public hearing Tuesday night, filling the board chambers, lobby and a separate overflow room.

Opponents urged supervisors to reject the tax, noting that commercial property owners along State Route 610 and U.S. 17 already are paying a service district tax to help fund road improvements in those areas. And Stafford business owners also are facing higher tax bills because of an average 28 percent increase in commercial property values during the recent reassessment.

"There is no popular support for this tax," said Supervisor Milde, who owns a hardware company in the county. "I don't know where this is coming from. This is not the right time to do this."

But BPOL supporters argued the levy will provide needed revenue that could fund county services such as the schools system, public safety and roads.

And as the county cuts spending because of declining sales and real-estate tax revenue, BPOL could take some of the tax burden off homeowners, the proponents say.

ABOUT BPOL WHAT IS IT? The BPOL tax is on gross receipts from a business. State law exempts some businesses, including insurance companies, banks and media organizations, from paying the tax. SETTING LIMITS: Localities can set a minimum amount of gross income before the tax would kick in, which could exempt some mom-and-pop stores. Stafford will exempt the first $200,000. Localities also can set different tax rates for different types of businesses, and don't have to charge the full amount allowed by law. Like Spotsylvania, Stafford will charge half the rate allowed. OTHER TAXES: Stafford already charges more than a dozen different business-related taxes. For example, the business property tax is on everything a company owns, including computers, desks and other materials.

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Date published: 7/3/2008

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