Virginians are getting a break from the sales tax this weekend courtesy of Virginia’s General Assembly, which combined three existing sales tax holidays into one longer Tax-Free Weekend this year, according to the Virginia Department of Taxation.
According to the department, items exempt from the sales tax this weekend include school supplies, clothing and footwear, emergency preparedness items and some energy-efficient home appliances with either the Energy Star or WaterSense label.
Included in the list of exemptions are back-to-school staples like backpacks, calculators, flash drives and composition notebooks, as well as a variety of sports and recreational equipment.
For items that do not qualify for the sales tax exemption, store owners may still offer them as tax-free by choosing to have the store absorb the cost of the sales tax on behalf of the consumer.
Photo via pixabay.com
There are actually two hurricane tax holidays this year. The first tax holiday is May 25-31, which has been declared Hurricane and Flooding Preparedness Week by Gov. Terry McAuliffe. The second is Aug. 7-9.
After 2015, there will only be one holiday in August. The Virginia General Assembly voted to combine three hurricane preparedness tax holidays into one three-day period. However, the bill goes into effect on July 1, 2015, which means the planned tax holiday from May 25-31 was unaffected.
The 2015 Atlantic hurricane season runs from June 1 to November 30, according to the National Weather Service. The National Oceanic and Atmospheric Administration will release its predictions for the 2015 hurricane season at 10:30 a.m. today.
Among the list of items exempt from tax are supplies under $60, including bottled water and batteries, generators under $1,000 and chainsaws under $350. Food and candles are not exempt.
While inland, Arlington is not immune to the impacts of Atlantic hurricanes. The county saw plenty of wind and rain from Hurricane Sandy in 2012 and more significant damage from Hurricane Irene in 2011.
(Updated at 1:20 p.m.) The Artisphere cultural center in Rosslyn will close and Arlington’s property tax rate will stay the same under the new Fiscal Year 2016 budget approved unanimously by the Arlington County Board last night.
The $1.16 billion budget will provide Arlington Public Schools with the extra $6.2 million it sought to deal with rising enrollment.
It also will fund a new internal auditor position, a campaign promise of County Board member John Vihstadt.
Other budget highlights include:
- An additional $1.4 million for economic development efforts, including an extra $200,000 for TandemNSI, $200,000 for tourism promotion and an extra $100,000 for the Columbia Pike Revitalization Organization
- Five new sheriff deputy positions
- Salary supplement for the public defender’s office
- Additional jail-based mental health services
- An additional animal control officer for the Animal Welfare League of Arlington
- Funding for Affordable Housing Investment Fund remains steady at $12.5 million
- An additional $1 million for housing grants, for a total of $8.9 in housing grant funding
- The county manager’s proposed cuts to BikeArlington were eliminated. Funding for county bike and pedestrian programs remains at $812,121.
- A merit compentation increase for employees
- Funding restored to the “Live Where You Work” program for county employees
Under the budget, Arlington’s real estate tax rate will stay at $0.996 per $100 in assessed value. However, due to the 4.9 percent rise in residential property assessments and a 1.8 percent increase in the water-sewer rate, the average Arlington homeowners’ tax and fee burden will rise about $281 a year, to a total of $7,567, a 4 percent increase.
“Arlington’s real estate tax rate remains the lowest in the region,” a county press release noted.
County government spending will increase 1.1 percent and Arlington Public Schools spending will increase 4.5 percent compared to the previous fiscal year.
Under the budget, the per-pupil cost of Arlington Public Schools to taxpayers will drop to $18,558 per student from $19,040 per student during FY 2015.
The internal auditor position sought by Vihstadt will require $200,000 of funding. The auditor will be independent, reporting to the County Board as opposed to existing internal auditing programs that report to the County Manager.
“The auditor, and an advisory committee, will report directly to the County Board and will focus on tightening financial oversight and deepening program performance review,” according to the press release.
The Virginia General Assembly passed a bill this year giving the Board the authority to hire an auditor. The only other positions the Board can hire directly are the County Attorney, the County Clerk and the County Manager.
County officials say they were able to balance the budget without a tax increase and find additional funding for schools and other priorities by making budget cuts elsewhere, including Artisphere.
“The Board’s most significant cut was its decision to close Artisphere, a move that will save $2.3 million in net taxpayer support for the County’s critically acclaimed arts and cultural center,” said the press release. “The County has said that the center’s failure to consistently attract a large enough audience and its ongoing need for substantial County funding put too great a burden on strained County finances. The County is redirecting $496,000 of the money saved to fund alternative arts and cultural programming across the County.”
Artisphere is set to close June 30.
The tax rate will likely remain at $0.996 cents of $100 of assessed value, which will result in an average property tax bill increase of $281 per year for Arlington households. The County Board had advertised a rate 1.5 cents higher than it passed, but ultimately decided to make budget cuts instead.
“Every member of this Board is acutely aware of the tax burden on our residents,” County Board Chair Mary Hynes said. “We felt strongly that we did not want to add to that burden.”
The tax rate was one of the key decisions the County Board made during its final budget work session yesterday evening. It will vote on the Calendar Year 2016 tax rate and its FY 2016 budget next Tuesday.
In addition, the County Board vowed to fully fund Arlington Public Schools, allotting $6.2 million above County Manager Barbara Donnellan’s proposed budget. The combination of the flat tax rate and additional money for public schools meant the Board had to slash $2.8 million from their previous budgets.
The biggest of those cuts will come from closing Artisphere, effective June 30. The county still has a lease on the property and there are outside parties that would like to turn it into a tech incubator and conference space, but no formal proposal has yet been made on that front. Closing the center, converting the Metrobus 3A route to ART service and foregoing expansion of urban agricultural offerings were enough to fund a balanced budget.
The Board also acquiesced to other budget requests, including funding a new animal control officer for the Animal Welfare League of Arlington, providing pay increases to the Public Defender’s office and injecting $900,000 into Arlington Economic Development’s budget.
“This budget fully funds Schools, maintains core services and the social safety net, values our employees by providing a modest step increase, and invests more in the critical areas of economic development and public safety,” Hynes said in a press release. “I am confident that next week, we will adopt a budget that continues this County’s long track record of wisely managing taxpayer money while making strategic investments in infrastructure and environmental and economic sustainability.”
In Arlington County, residents who own dogs must pay a for a license.
The license costs $10 per year or $25 for every three years. Despite the abundance of dogs in Arlington, the tax only brought in $59,664 from about 7,000 licensed dogs during a recent fiscal year, according to the Sun Gazette.
That has prompted enquiries from County Board member John Vihstadt.
It also led the president of the Arlington County Taxpayers Association, who fervently advocates for lower taxes, to suggest that the fee might be raised to help pay for the county’s dog parks.
What do you think should be done with the county’s dog license fee?
Today is Tax Day across the nation. Meanwhile, next week, the Arlington County Board will set the Fiscal Year 2016 real estate tax rate.
Last year, in advance of the Board’s FY 2015 budget vote, we asked what you think about the county’s tax rate.
Only 6.5 percent of respondents said the tax rate should be raised, while 27 percent said the tax rate should be held steady and 66.5 percent said it should be lowered.
(The Board ultimately lowered the rate from $1.006 per $100 in value to $0.996.)
This year, the Board advertised a tax rate of $1.011, giving itself the flexibility to raise the rate by up to 1.5 cents. Such a tax hike could be used to help fully fund schools, which are facing a $6.2 million funding gap.
On the other hand, because of higher residential assessments this year, the Board may consider lowering the rate to ease the increasing tax burden on homeowners.
What do you think should be done this year?
The Arlington County Board is considering a recommendation by Arlington County Treasurer Carla de la Pava to reduce the fee for a real estate bill paid up to 30 days late from 10 percent to 5 percent. Tax bills paid after 30 days would continue to incur a 10 percent penalty.
“The Treasurer … has concluded that as currently implemented a 10 percent penalty for late payment of real estate taxes is unnecessarily harsh for delinquent taxpayers who pay of their own accord,” the county’s staff report reads. “Specifically, it treats those taxpayers who simply forgot about a due date the same as those who refuse to meet their tax obligation without collection action by the Treasurer.”
The average real estate bill last year, which are paid in two installments a year, was $2,752.50, according to the treasurer’s office. If a resident paid on June 17, just two days after the June 15 deadline, he or she would have had to pay a $275.25 late fee. If the County Board approves de la Pava’s recommendation, that penalty would be cut in half, to $137.63.
The treasurer’s office said 1,346 Arlington taxpayers paid their real estate taxes between one and 30 days late in 2014. The 10 percent late fee meant they paid a combined $535,721 in fees alone.
“As the average Arlington County real estate tax bill increases, so does the financial hardship suffered by generally honest property owners by the late payment penalty system currently in effect,” the report says. “Furthermore, it is worth noting that the typical homeowner with a mortgage escrow account is extremely unlikely to ever incur a late payment penalty. Instead, the individuals more likely to miss a real estate tax due date are longtime and older residents who no longer have a mortgage on their home and thus are directly and personally responsible for making their real estate tax installment payments.”
If the late penalty had been reduced in FY 2011, the county would have taken in an average of $235,000 less each year, or just under $1 million. The reduced fee has already been included in the FY 2016 budget, according to county staff.
The motion is on the County Board’s consent agenda on Saturday, which means it is likely to approve it without discussion. If the Board passes the motion, Arlington would be the first jurisdiction in Northern Virginia to not charge the maximum late fee on a real estate tax, according to county staff.
Arlington Ranks High for Tax Burden — Arlington County has the second highest overall tax burden in the nation, according to stats compiled by the website NerdWallet. Arlington’s high median income and high real estate costs factored heavily in the calculation, which includes federal, state and local taxes. [NerdWallet, Washington Business Journal]
Trevor Noah Performs in Arlington — Comedian Trevor Noah performed his first stand-up comedy show since being named the next host of The Daily Show last night in Arlington. It was the first of seven sold-out shows Noah is performing this weekend at the Arlington Cinema Drafthouse. In writing about the performance, the New York Times described the Drafthouse as “about a half-hour drive outside Washington, with drinks far cheaper than most places in the District.” [New York Times]
Amsterdam Falafelshop Offers Pot Pairings — Amsterdam Falafelshop, which has a location in Clarendon, is offering a “pot pairing menu” in time for 4/20. Also on April 20, the restaurant will offer sandwiches for $4.20. [Washington City Paper]
Arlington Resident in Voice Contest — Tara Cannon, an Arlington resident, is among the singers hoping to get a guaranteed audition for The Voice, via an online voting contest on NBC 4’s website. [NBC Washington]
Fairlington 5K Road Closures — Arlington County Police are planning on shutting down a number of roads Saturday morning for the second annual Fairlington 5K race. The roads are expected to be closed between 7:00 and 9:30 a.m. [Arlington County]
Cherry Blossom Race Closures — Police are planning on closing the Memorial Bridge and Memorial Circle to traffic Sunday morning for the Cherry Blossom Ten Mile Run and 5K. The closure is scheduled to be in place from 5:00 to 11:00 a.m.
Artisphere Executive Director Left in Feb. — Jose Ortiz, executive director of Artisphere, quietly left the position in February. Ortiz is now working as the deputy director of the Bronx Museum in New York City. Artisphere programming director Josh Stoltzfus, meanwhile, has been promoted to acting executive director of the cultural center, which is on the county’s budgetary chopping block.
CivFed: No Tax Hike — Members of the Arlington County Civic Federation approved a resolution this week urging the County Board not to approve any increase in Arlington’s real estate tax rate. Fiscal conservatives on the Civic Federation argued that the county has plenty of reserves and surpluses to tap without the need to further tax struggling homeowners. [InsideNova]
Planning Comm. Rejects Wilson School Historic Status — Arlington’s Planning Commission on Monday voted to oppose a historic designation for the Wilson School in Rosslyn, by a vote of 5-4. That follows the School Board’s unanimous vote again a historic designation for the school, which was built in 1910 but was subsequently renovated significantly from its original form. The school system says trying to preserve parts of the school would require additional time and expense as it plans to build a new facility for the H-B Woodlawn Secondary Program on the site. [InsideNova]
Urban Igloo Debuts Clarendon Page — Local apartment matchmaking service Urban Igloo, an ARLnow.com advertiser, has debuted a number of neighborhood information pages, including one for Clarendon. The company says its recently revamped website makes it “one of the first real estate companies to take an online hyperlocal approach to connect renters to specific neighborhoods.” [Urban Igloo]
Flickr pool photo by Erinn Shirley
One possible explanation for the lack of participation in a program that could save companies thousands of dollars a year: many local tech companies say they haven’t heard about it.
Last year, the Arlington County Board approved a measure “to broaden the Technology Zone incentive program for new technology companies.” The action was trumpeted in a press release by then-County Board chair Jay Fisette.
“These updates reflect the reality of a quickly-changing tech world,” Fisette said at the time. “I said that we would lay the groundwork this year for Arlington to become a hub of the innovation economy. This update to our Tech Zones is a big step in the right direction.”
As of March 19, however, only eight businesses had applied and subsequently qualified for “Technology Zone” status for their 2014 taxes, according to Deputy Commissioner of Revenue Ann Bisson. She could not say which companies had qualified nor how much local tax revenue those companies represent.
“Because of the nature of the tech business currently having so few companies applying, I am not allowed by law to give you that information in this case,” Bisson said. “Virginia law prohibits us from giving out any kind of information where it could be determined what one company has in income.”
In order to qualify, a company has to prove that it meets the following requirements:
- Has been in business in Arlington for no more than 18 months, or has grown in full-time employment by at least 25 percent within the past 12 months.
- Is located in a commercial building in Arlington.
- “Has a primary function in the creation, design, and/or research and development of technology hardware or software.”
It’s unclear how many of the current crop of up-and-coming media- and service-oriented tech companies — Uber, Snapchat, Airbnb, Pinterest, Spotify, etc. — would qualify under of that definition.
“The use of computers, telecommunications services, or a web page or internet site shall not, in itself, be sufficient to qualify as a qualified technology business,” according to county code.
For those that do qualify, the savings are significant: the Business, Professional and Occupational License (BPOL) tax rate is reduced from $0.36 for every $100 of a business’ gross receipts, to between $0.18 and $0.10, depending on the size of the company.
“Arlington Economic Development (AED) estimates that the updated incentives would amount to a five-year benefit from about $39,000 for a 20-employee company to $155,000 for an 80-employee company – an average savings of $2.25 per square foot, if applied to annual rent for companies that qualify,” according to the 2014 press release.
ARLnow.com reached out to a number of the Arlington-based tech firms we have profiled for our Startup Monday feature. Of those that responded, most said they would likely qualify for the incentive, but none had heard of it before we reached out.
“Without you pointing it out, I’m not sure we would have figured it out,” said the founder of a Clarendon-based startup, who declined to be identified. “We use an out-of-state accountant and this is a pretty hyper-local set of incentives. We certainly would sign up, now that we know it exists.”
Raymond Rahbar, founder and CEO of UberOffices, which houses at least a dozen local tech startups at its Rosslyn coworking space, said no one has reached out to him or his company about informing its members of the incentive.
Rami Essaid, the founder and CEO of Distil Networks in Ballston, also said he had not been contacted. However, he said incentive program is small potatoes for startups that hope to scale into billion-dollar businesses.
“When you are in hyper growth, you care more about big picture things like being able to continue to scale and not optimizing little things like taxes,” Essaid told ARLnow.com. “That said, Arlington I feel like has done many of the right things to foster an environment for scale. That means having the right talent pool, good community events, etc. The extra tax perks are nice bonuses but they don’t influence our reason for being in Arlington.”
Ironically, despite being an incentive for tech companies, little information about the program can be found on Arlington County’s own website.
There’s a blurb buried deep on AED’s website, but no information about how to apply for it. “Contact Arlington Economic Development for specific details,” the page said.
We couldn’t find anything on Arlington’s Taxes & Payments site. A PDF document on the site, listing business tax rates, does not list the Technology Zone rate. Neither did the paper tax bill mailed by the Commissioner of Revenue’s office. When we asked about it last month, we were referred to the Tech Zone’s section of county code itself.
Peter Chang Fast Casual Restaurant in Arlington — Chef Peter Chang, who has a large following in Northern Virginia, is in lease negotiations for the Oriental Gourmet space at 2503 N. Harrison Street. Chang hopes to open Peter Chang Wok, envisioned as a fast casual Chinese restaurant. Chang only plans to make “a few cosmetic changes” to Oriental Gourmet, which is still open, after taking over the lease. [Washington Post]
Cherrydale Plan Passes — Cherrydale has a new Neighborhood Conservation plan. The plan, approved by the County Board on Tuesday, calls for protecting trees, ensuring sidewalks are wide enough for strollers and those with disabilities, timely utility maintenance, more daycare opportunities and infrastructure for residents to age in place. [Arlington County]
Top County Staff Gets Raise — The Arlington County Board on Tuesday voted to give a 3.4 percent raise to the three county employees it’s permitted by law to hire directly: County Manager Barbara Donnellan, County Attorney Stephen MacIsaac and Clerk to the County Board Hope Halleck. The annual salary for Donnellan — who’s in charge of the county government and its more than 3,800 employees — will increase to $269,742. [InsideNova]
Abundance of Busted Pipes — This week Arlington County firefighters have responded to a steady stream of calls for busted water pipes in buildings around the county. “Please make sure you know where your water shut off is in case it happens to you,” the fire department tweeted. [Twitter]
Abingdon Street House Fire — Firefighters extinguished a small fire in the basement of a home on the 100 block of N. Abingdon Street on Wednesday morning. One person had to flee the home, reportedly while only wearing shorts and a t-shirt, but no injuries were reported. [Twitter]
Court Ruling May Cost Arlington Millions — A ruling by the Virginia Supreme Court on a tax dispute in Arlington County may cost Arlington and other Virginia localities millions of dollars in lost business license tax revenue. The court ruled that companies with offices in multiple states may deduct certain out-of-state earnings from their license tax. [Washington Post]
GW Baseball Blanks Georgetown — In a chilly game at Arlington’s Barcroft Park that we previewed Wednesday, the George Washington University baseball team defeated Georgetown in a 3-0 shutout. [GW Sports]
Flickr pool photo by Dennis Dimick
The Board advertised a rate of $1.011 per $100 of assessed value, 1.5 cents above the current $0.996 rate.
By advertising the higher rate, the Board has given itself the flexibility to raise the rate should it choose to do so, despite County Manager Barbara Donnellan’s recommendation (and the Board’s guidance) of keeping the tax rate steady.
The advertised rate is the highest rate the Board may set when it finalizes its Fiscal Year 2016 budget in April.
“The Manager has put forward her budget, which complies with our direction. The County Board’s work now begins,” County Board Chair Mary Hynes said in a statement. “This advertisement sets the stage for a Board and community deliberation about revenue and expenditures.”
“While no one on the County Board wants to see tax rates increase, we believe that having flexibility at this point in time is necessary as we hear from the community, scour the budget for savings, evaluate programs and monitor economic circumstances,” Hynes continued. “Our final goal is to arrive at a sustainable, balanced budget that best serves all Arlingtonians.”
Even if the tax rate were to remain the same, the average Arlington homeowner’s annual tax bill would increase $281 to $7,567, due largely to a rise in residential property assessments.
The budget keeps the county’s current real estate tax rate — of $0.996 per $100 in value — the same, but would result in a net tax hike for homeowners thanks to property assessment increases.
The county’s real estate tax base has increased 3.4 percent, thanks largely to a 4.9 percent increase in single family home assessments and a 4.7 percent increase in apartment building assessments. (New construction added over 0.7 percent to the base.)
The average Arlington homeowner will pay $7,567 — an extra $23 per month, or $281 per year — in total county taxes and fees under the proposed budget.
For owners of Arlington office buildings, which have experienced record levels of vacancies thanks in part to BRAC, taxes will go down. Office assessments decreased 4.5 percent, while hotel assessments decreased 4.7 percent.
Donnellan says she was able to balance the budget and close a forecasted $4 million budget gap without making any formal cuts. Healthcare and retirement costs were lower than expected and some “efficiencies” were found in the budget, she said.
“I think Arlington have been really fortunate,” Donnellan said of the budget, which she was able to balance without significant cuts despite the high office vacancies.
No changes to personal property, stormwater, business improvement district or business license taxes have been proposed. While there’s no change proposed in the household solid waste rate, Donnellan does propose a 1.8 percent increase in the water/sewer rate. Some parks and recreation fee changes have been proposed, including reductions in the rates for aquatics and gymnastics programs.
While not in her base budget, Donnellan included an optional slate of cuts for the Board to consider. The “budget reduction options” include $4.1 million in cuts and savings in various parts of the budget, including:
- Closing Artisphere, but reinvesting half of the $900,000 in annual savings into the county’s Cultural Affairs program (last year Artisphere was funded with $1.8 million in county funds, half of which were designated “one-time” funds.)
- Converting Metrobus 3A service in Arlington to less expensive ART bus service
- Consolidating an elementary after-school program with Arlington public schools
- County vehicle fleet reductions and utility savings
- Publishing one fewer Citizen newsletter per year
- Reductions to bike and pedestrian programs
- Reductions to employment services programs in the Dept. of Human Services
- Reductions to the community energy program
- Reductions to planning resources
- Reductions to tree planting
- Reductions to library materials
- Reductions to urban agriculture
- Eliminating a proposed increase in funding to courts and constitutional officers, meant to offset state cuts
Donnellan said her suggested cuts wouldn’t result in “totally outraged” community members, but would likely receive some push back from “interested parties.”
“They’re not core services in the sense of how we deliver day-to-day business,” Donnellan said of the proposals.
At $1.156 billion, Donnellan’s budget is a 0.7 percent increase over last year’s $1.15 billion adopted budget. The proposed budget includes a $710.9 operating budget for the county government. The remainder would go to Arlington Public Schools, which will see an overall funding increase of $13.2 million, or 3.1 percent.
APS Superintendent Dr. Patrick Murphy will proposed his Fiscal Year 2016 budget tonight.
Arlington’s residential real estate assessments rose by 4.9 percent on average for 2015, but some of Arlington’s lowest-income neighborhoods, which can least afford the corresponding rise in property taxes, are experiencing the biggest spikes.
According to the trend map (left) provided by the county’s Department of Finance, the area hit hardest by the assessment rise was the southwestern-most part of the county, from Columbia Pike to the border with Alexandria (area 10).
The average assessment for this area rose 11 percent, from $362,527 to $402,404. Homes in this area were the least valuable on average in the county last year and, despite the $40,000 jump, are the least valuable this year. If the tax rate remains at around one dollar per $100 of assessed value, the owners of houses in this area will pay about $400 more on average this year than last year.
The area with the second-least valuable homes in the county is area 8, which includes the Columbia Heights West, Barcroft and Glencarlyn neighborhoods. The average assessment rose 9 percent in this area, from $388,215 to $423,115, or an average increase of about $350 in property taxes this year over last.
By contrast, the wealthiest area in Arlington — area 3 in the northernmost part of the county — experienced almost no rise in assessments. The average home was valued at $1,011,423 last year and $1,014,566 this year, a 0.3 percent increase.
The full list of changes, with area numbers corresponding to the above map:
- Area 1: $713,202 in 2014; $748,523 in 2015; 5.1 percent increase
- Area 2: $810,380 in 2014; $853,100 in 2015; 5.3 percent increase
- Area 3: $1,011,423 in 2014; $1,014,566 in 2015; 0.3 percent increase
- Area 4: $646,590 in 2014; $683,000 in 2015; 5.6 percent increase
- Area 5: $698,305 in 2014; $710,175 in 2015; 1.7 percent increase
- Area 6: $514,552 in 2014; $551,594 in 2015; 7.2 percent increase
- Area 7: $554,480 in 2014; $598,880 in 2015; 8.0 percent increase
- Area 8: $388,215 in 2014; $423,115 in 2015; 9.0 percent increase
- Area 9: $410,274 in 2014; $438,993 in 2015; 7.0 percent increase
- Area 10: $362,527 in 2014; $402,404 in 2015; 11.0 percent increase
- Area 11: $524,082 in 2014; $553,954 in 2015; 5.7 percent increase
Ebbin Bill to Return Checks As Tax Refund Option — State Sen. Adam Ebbin has proposed a bill that would force the state to start using paper checks again for tax refunds. In 2012 Virginia budget eliminated paper check refunds, allowing residents to get their refund either via electronic transfer or pre-paid debit card. Ebbin unsuccessfully proposed a similar bill last year. [InsideNova]
Favola Hate Crime Bill Fails — A bill that would add sexual orientation and gender identity to the definition of hate crimes in Virginia has failed. The bill was proposed by state Senator and former Arlington County Board member Barbara Favola. [Associated Press]
MLK Books for Kids at Library — The Arlington Public Library blog has some recommendations for books that can introduce the life and legacy of Martin Luther King, Jr. to children. [Library Blog]
Flickr pool photo by Brian Allen