Update: City Makes BPOL Tax More Friendly For Small Business

Updated, May 10, 2011

City Council is now proposing to keep the Business, Professional, Occupational License (BPOL) tax the same this year.

Council members were considering a 1-cent increase that would have become effective later this summer for the fiscal year 2012 budget.

If the council decides to keep the BPOL tax the same, the city will lose $100,000 in revenue.

There is a special meeting of the City Council Wednesday at City Hall at 5:30 p.m. for a second reading of the budget and tax ordinance. The public is encouraged to attend.

 Original Post, May 3, 2011

City Council has proposed a plan that would decrease the amount small businesses pay in  Business, Professional and Occupational (BPOL) taxes.

Right now, any business that pays a BPOL tax is exempt on the first $50,000 of gross revenues. The City Council plan would increase the exemption amount to $150,000 of gross revenues.

According to Council Member Andrew Harrover’s blog, the decision was made to “to help small businesses grow.” One city resident called the change “commendable.”

 The City Council proposed the BPOL tax plan after two recent budget meetings at which small business owners and Del. Jackson Miller, R-Manassas, implored council members not to approve any tax hikes.

 “This is not the time to be raising taxes,” Del. Miller told council members. “Please, wait a year or maybe two. We don’t know how high gas prices and food prices are going to go,” he said.

Miller also spoke out about the impact a BPOL Tax increase would do to the city.

 Please, reconsider the BPOL tax, so we do not send businesses and citizens out of the city of Manassas, Del. Miller said. “BPOL taxes can and will drive businesses out of the city and into the county.”

According to President and CEO of the Prince William County Chamber of Commerce Rob Clapper there are some 400 businesses that are part of the city.

 The proposed increase is just one cent, bringing the tax scale to 15 cents for every $100 of revenue. And while the tax increase is still being proposed, tripling the exemption level will certainly provide less of a financial burden on small business.

 Prince William County has also increased the exemption level for BPOL.  Business operators there will be exempt from paying the business license tax on the first $200,000 of gross revenues.

County Supervisor Marty Nohe (Coles District) has long championed BPOL reform. Chairman of the Board of County Supervisors Corey Stewart and Supervisor Wally Covington (Brentsville) are also leading the dialogue to reform BPOL as a means to stimulating economic development in Prince William, according to a press release issued by the Chamber.

“The Prince William Chamber, with its almost 2,000 business members, considers the efforts of Supervisors Stewart, Nohe and Covington to be an important first step.  We praise them for their vision, and hope that this serves as the beginning of much broader discussions on moving the County away from BPOL altogether.  We believe the eventual elimination of BPOL would lead to significant growth in economic opportunity in Prince William,” Clapper said.

  “Small business is the economic engine of a community and by increasing the threshold for BPOL we will allow more businesses to start and flourish,” Chairman Stewart said.

"BPOL reform has been a goal of mine since I was first elected.  As someone who pays BPOL through my own business, I struggle with the fact it is a tax that applies to all revenue, not just a company's profits.  This reform has been a long time in coming, but I know that it is a first step toward bringing meaningful relief to all of the small businesses that are creating jobs in our community,”  Supervisor Nohe said.