Time to eliminate the BPOL tax
Published 10:16 pm Tuesday, May 1, 2012
To the editor:
In 1995, I appeared before the General Assembly to voice my support for the repeal of the Business, Professional and Occupational License Tax. On Friday, the Thomas Jefferson Institute for Public Policy recommended that the BPOL tax, which is levied on a company’s gross receipts, be eliminated.
The BPOL tax is and has always been an unfair, anti-business tax — unevenly administered among localities with no regard to profit or loss. For these and many other reasons, the BPOL should be abolished now.
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In 1995, I endorsed Gov. George Allen’s proposed phase-out of BPOL, which would have returned to localities — dollar for dollar — revenues lost during the phase-out term. His suggestion then that localities be allowed to reinstate the tax after the phase-out if the state failed to provide the necessary replacement funds should have been given serious consideration.
Because of past experiences, many localities expressed fear that replacement funds would never materialize.
As a former City Council member and a two-term mayor of Suffolk, I understand well that this tax is a key revenue source for localities. There continues to be fear that a change could result in a loss of revenue.
Communities have loudly proclaimed that they would have to raise real estate taxes, and the burden would shift to homeowners.
Let’s try to understand and reason together. If a dollar in revenue were taken away, and a dollar were replaced and returned to localities from the states, where would be the loss in revenue?
Have we all forgotten the action by the General Assembly in 1978 to reform the BPOL tax? Remember that the state code was amended, placing a rate cap on all four BPOL categories.
The amendment required localities to reduce the amount of business license collection over a three-year period. It was difficult, but we did it.
Well, I remember those days well.
As an example, in Suffolk the tax rate for a professional license was 90 cents per hundred dollars in receipts. The amended code required Suffolk to reduce the rate to 58 cents per $100 over a three-year period — a 38-percent decrease.
We managed, and in that case we were not even reimbursed.
Let’s really be pro-business — not just talk about it. Gov. Allen had the courage to recommend the abolition of this unfair tax. The business community still supports it. Now, let’s do it.