The War Of 1812 Is History. The BPOL Tax Should Be, Too!

The pace of the General Assembly moves very fast, especially during the short session when committee hearings are compressed into a shorter period. Just this afternoon we were notified that HB 1437, patroned by Delegate Mark Cole (R-88, Spottsylvania), which would grant localities the power to keep or discontinue the dreaded BPOL Tax, is in the Senate Finance Committee tomorrow morning. This bill passed the House last week by a 94-5 margin. But we’ve seen in the past that big, bipartisan margins in the House mean nothing in the Senate. So, please contact members of the committee and ask them to vote in favor of this bill!

The BPOL Tax was established to fund the War of 1812. Not only has it outlived that purpose by 199 years, it is inherently unfair, taxing Virginia businesses on gross receipts rather than profit. Companies that lose money still pay a tax! It punishes many small, family-run businesses that run on tight profit margins. In this down economy, government should do all it can to encourage job growth. The BPOL Tax kills jobs and stunts the growth of small businesses — which create 75 percent of all jobs in America — by siphoning away capital they would invest in their businesses and use to hire new employees.

While the local government lobby, which uses your hard-earned tax dollars to lobby for more power at your expense, says it can't afford the loss in tax revenue, HB 1437 only gives localities the option of removing the BPOL Tax. Denying localities the option to end this tax after 199 years is indefensible. Just think: If localities had that option, they could compete against each other for businesses to locate in their city or county to create new jobs. The removal of the BPOL Tax will encourage the start up of new locally-owned businesses as well. 

It's time local governments stop complaining about the loss of revenue and showed concern for the loss of businesses and jobs. Local government always will be in business — but locally owned, small, family-run businesses do not have that guarantee. Government should do all it can to help them. A small business owner in Norfolk lost $70,000 last year, covered by his savings, and still had to pay $4,000 in the BPOL Tax! (See Is that how we create jobs in Virginia?