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Small Business Owners Decry Taxes, Sign Ordinance

by ARLnow.com — April 4, 2011 at 2:14 pm 1,409 16 Comments

What’s on the mind of local entrepreneurs? A lot, as it turns out.

On Thursday night Arlington County held a small business ‘listening session’ at Clarendon Ballroom. More than 50 business owners showed up to tell county staff what they like and don’t like about how the county treats small businesses.

The event was part of County Board Chair Chris Zimmerman’s year-long push to make Arlington more small-business-friendly. Zimmerman gave the opening and closing remarks at the event, but it was county planning and economic development staff who led the group discussions that were the evening’s main substance.

Among the things business owners liked about doing business in Arlington were the friendly personal interactions with county employees, the frequent county programs that teach you how to create a business plan, and the relative ease of running a home-based business. As expected, however, complaints far out-numbered compliments.

There was discussion of the advantages larger businesses have over smaller businesses when trying to navigate the county’s regulations and talk of loosening regulations preventing small businesses from participating in certain citizen-oriented programs. By and large, however, the discussion focused on three areas: clarity and accessibility of information, taxes and fees, and the county’s controversial sign ordinance.

Business owners said the county could do a better job grouping business formation resources on its web site. It would be especially helpful, people said, if the county could create step-by-step guides for the various types of businesses. For instance, the county might list the various permits necessary to open a restaurant.

One restaurant/bar co-owner said he owned a bar in the District and was a former Arlington County employee, but he still had difficulty with the permitting process. The live entertainment permit process in Arlington, he said, was “astronomically different” than in D.C.

Taxes and fees were another lively topic of discussion. Business owners lamented that they’re charged fees for business licenses based on their gross revenue, rather than on their profits. That puts large, low-profit-margin businesses at a disadvantage, some said. Business owners also decried the various increases in taxes and fees levied over the past couple of years.

“Sometimes it feels like as an Arlington business, we’re the ATM machine for Arlington County,” the owner of a small grocery store said. Other business owners specifically criticized Arlington’s business tangible property tax, which forces businesses to pay a percentage of the value of their computers, furniture and other business property. While every locality in Virginia has the tax, business owner said it actually discourages investment — a “disincentive to do the right thing.”

The most-talked about issue of the night, by far, was the county’s much-maligned sign ordinance, which prevents businesses from using certain types and sizes of signage to promote their business. Owners said the ordinance was too restrictive — a detriment to business in Arlington.

Why should the county prohibit sandwich board-style signs in a busy commercial area like Clarendon, shop owners asked. Why are a real estate agent’s balloons considered a prohibited “moving sign” when they’re permitted in most other jurisdictions, and why can some real estate signs only be displayed on weekends, a Realtor wanted to know. Others asked about inconsistencies in the ordinance that permit certain signs on one side of a building but different types of signs on another side.

In addition, some asked why couldn’t some effort be made to subjectively decide which signs to permit based on their aesthetic qualities, since aesthetics is what drives the regulations in the first place. That brought up the topic of the Wag More Dogs mural, which sparked a contentious lawsuit between a business owner and the county.

“People here love art and expression until it becomes commercially viable,” one entrepreneur opined. “I don’t get it… don’t [we] want successful businesses? It’s over-regulated to the point where you’re constricting creativity and imagination.”

In the past, county board members have said that it’s difficult to regulate signs without some sort of objective criteria.

Arlington officials are in the process of rewriting the sign ordinance to address many of the criticisms against it. On Tuesday, April 12, the county will be holding a public workshop about the sign ordinance at the W-L High School cafeteria. From from 7:00 to 9:30 p.m., county staff will discuss the rewrite process and ask for suggestions on how to make the ordinance better. Attendees at Thursday’s meeting were encouraged to attend.

  • JamesE

    Was there a cover charge?

    • KMD

      No, it was a free event.

    • Cas

      haha– touche.

  • Lou

    Re: tangible property being taxed, that is SOP almost any where you go. You get to depreciate your property, the IRS shows you how to do this. So if you play your cards right your tax burden is very low, and when you finally have to invest in equipment, well you’re helping other businesses.

    And yes, live entertainment in DC is handled much differently, by the ABC board and ANC process. I don’t think we are getting ANC’s in Arlington any time soon.

    • Burger

      The rate you can depreciate and the rate Arlington County depreciates goods are markedly different as many business owners stated. What good does it to add equipment if you are going get reamed on the tangible good costs which should be equal to what you can get on the open market for it not the depreciated costs Arlington County tax assessor thinks it should cost.

      For example, you can buy a computer for 2000 and 4 years later (after 4 new releases of computers) it still has a tangible value of $1000 to the county.

      Now, I am not sure I necessarily disagree with the view it limits investment but it is a cost that is not really tangible to Arlington.

      • Raymond Warren, Deputy Commissioner

        Actually the Commissioner of Revenue office uses an accelerated depreciation schedule for computer equipment. Computer equipment depreciation is 65% (1st year), 45% (2nd year), 30% (3rd year), and 10% (4th year and forward until disposed). So a 4 year old computer that cost $2,000 would have an assessed value of $200 until it is disposed.

  • Wayne Kubicki

    Anyone besides me catch the irony in the 4th graph?

    “…the frequent county programs that teach you how to create a business plan…”

    Wonder if part of the program is using the Artisphere’s business plan?

    Let’s go down the usual list…

    Be radically over-optimistic on your estimate of the revenue you can generate. CHECK.

    Carefully budget your expenses before you open your business. CHECK.

    Strictly stay within your expense budget once you open for business. CHECK.

    Make sure you have sufficiently capitalized your business. CHECK

    Be absolutely forthright with your investors (taxpayers). CHECK.

  • Robin

    What are the 14 scariest words in the English language? “I am from the Arlington County government and I am here to help you!”

    • Bluemontsince1961

      Ain’t that the truth, Robin!

    • Thes

      This has not been my experience with Arlington’s police, traffic engineers, firefighters, park planners, county court staff, or health department workers, most of which have solved problems for me and been a pleasure to work with. However, I dread any interaction with Comcast or Dominion Power, and my friends have had some terrible run-ins with some of the major Arlington landlords. I wonder why your personal experience is so different in this regard.

      • AllenB

        Because people like to make things up.

      • BackyardiganFC

        I’m with you there. Arlington County has been wonderful to deal with for me in all respects. I know we pay a lot of taxes here, but I really do believe we get a lot for our money. Other jurisdictions should be so lucky.

      • Mick Way

        I’d have to agree with Thes. Great people all around. How about it Robin? Are you an actual Arlington business owner or just venting a party line?

  • Burger

    The real big thing that kills most business owners, particularly those that work across state lines, is the gross receipts tax. Why Arlington County deserves tax revenue from work I do in other states is beyond me and is an absolute issue with low margin businesses –

    hence, why everyone sees only chain type retails stores or bars opening instead of some local business. Most can’t compete at the margins.

    • CW

      I’m not an expert on taxation or finance, but why would a locally-owned bar or retail store (as opposed to a chain one) suffer due to the gross receipts tax? How much business would they be doing in other states? I don’t follow.

      • Ben

        Economy of scale for one – a large chain can negotiate lower prices for sourced goods (beer, food etc) and thus have lower operating margins. Not to mention already having a solid business plan in place, otherwise the chain wouldn’t exist.

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