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The Right Note: Abolish the BPOL Tax

The Right Note is a weekly opinion column. The views and opinions expressed in the column are those of the author and do not necessarily reflect the views of ARLnow.com.

Mark KellyCounty leaders agree: they want to to decrease the office vacancy rates in Arlington. One way to start, abolish the BPOL tax.

What is the BPOL? BPOL stands for Business, Professional and Occupational License, and it is also known as a “business privilege tax” or “gross receipts tax.”

Why is it a prime candidate for abolishment? Because it is a tax for the privilege of operating your business in Arlington. The taxes are based on your gross receipts, not your profits. The lower your profit margin, the more the tax hurts your bottom line.

If you look at the website or listen to a proponent of keeping the tax, you have probably seen the bullet points that show how much you pay. Nothing is due under $10,000; $30 up to $50,000 and $50 up to $100,000. It is only those over $100,000 who pay more, depending on what type of business you run.

This looks somewhat fair to the naked eye until you remember the tax is on every dollar you bring into your business regardless of your expenses. It is truly a tax only an accountant or County Board member could love.

In the 2013 campaign, both Gov. Terry McAuliffe and Ken Cuccinelli said they could support eliminating the authority for the tax in Richmond. But, Arlington could do it on its own. And after the fiasco of the almost, not quite, sort of, elimination of the car tax, it would be better to let localities figure their own way out of the BPOL if they so choose.

Proponents of keeping the tax are primarily concerned about keeping the revenue stream. Last fall, the county treasurer pegged it at $60 million.

Arlington could absorb the revenue “loss” by phasing it out over a period of three years. As has been pointed out multiple times, Arlington collects more than it budgets for in tax revenue each and every year. The County Board could simply designate a portion of the close out funds for the next three years to cover the phase out without raising a single dollar in new taxes from elsewhere.

And, if it truly is a priority to hang an “open for business” sign on Arlington’s front door, then this is a tangible place to start. Bringing more businesses to Arlington would have positive revenue effects not measured by the Treasurer. Presumably, more workers each day would be buying sales-taxed lunches and dinners. It stands to reason that commercial property values, and the corresponding tax revenues, would go higher as the demand for space increases as well.

Board members could quickly give Arlington a competitive advantage on our neighbors in Northern Virginia. And, they would not need a task force or listening session to figure it out.

Mark Kelly is a former Arlington GOP Chairman and two-time Republican candidate for Arlington County Board.

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