City of Fairfax, Virginia City Council Regular Meeting

Transcription

1 City of Fairfax, Virginia City Council Regular Meeting Agenda Item # 9a City Council Meeting 9/13/2016 TO: FROM: SUBJECT: Honorable Mayor and Members of City Council Robert Sisson, City Manager Introduction of an ordinance amending Chapter 14, Article II, Division 1, Section of the Code of the City of Fairfax, Virginia, as it pertains to license taxes applicable to persons having gross receipts of $50,000 or less. ISSUE(S): Whether to make an adjustment(s) to the BPOL threshold. SUMMARY: The City adopted a BPOL ordinance in December A BPOL threshold excluding the first $1,800 in gross receipts was adopted in October The current threshold excluding the first $10,000 in gross receipts was adopted in December While BPOL rates in the City fall within the average range in Northern Virginia; the City does now have the lowest BPOL threshold in Northern Virginia. This issue was discussed during the budget process earlier this year. The Commissioner of Revenue made a presentation to the City Council during the April 5, 2016 budget work session at which several options were put forward and discussed. The City Council gave direction to proceed with a recommended change to the ordinance that would establish a new threshold of $50,000 in gross receipts exclusion. FISCAL IMPACT: A ($70,000 to $90,000) annual recurring reduction in BPOL revenue. A possible additional one time expenditure of approximately $14,000 to $21,000 in software development cost. RECOMMENDATION: Waive the first reading and set the public hearing for October 25, ALTERNATIVE COURSE OF ACTION: RESPONSIBLE STAFF/ POC: COORDINATION: Do not amend Section of the Code of the City of Fairfax. Commissioner of Revenue n/a ATTACHMENTS: BPOL Threshold Comparison Chart (#1) Proposed BPOL Threshold Changes Chart (#2) BPOL Rate Comparison Chart (#3) Sample motion

2 Attachment #1 BPOL Threshold Comparison Locality BPOL Gross Receipts Threshold Tier One License Fee BPOL Gross Receipts Threshold Tier Two License Fee BPOL Gross Receipts Threshold Tier Three License Fee City of Alexandria $-0- to $10,000 n/a $10,001 to $100,000 $50.00 n/a n/a Arlington County $-0- to $10,000 n/a $10,001 to $50,000 $30.00 $50,001 to $100,000 $50.00 City of Fairfax $-0- to $10,000 n/a n/a n/a n/a n/a Fairfax County $-0- to $10,000 n/a $10,001 to $50,000 $30.00 $50,001 to $100,000 $50.00 City of Falls Church $-0- to $10,000 n/a $10,001 to $50,000 $30.00 n/a n/a Town of Herndon $-0- to $10,000 $30.00 $10,001 to $50,000 $50.00 n/a n/a Loudoun County $-0- to $200,000 $30.00 n/a n/a n/a n/a Prince William County $-0- to $250,000 n/a n/a n/a n/a n/a Town of Vienna $-0- to $50,000 $30.00 n/a n/a n/a n/a

3 Attachment #2 BPOL Revenue Reduction by Threshold # of Projected Increase BPOL Gross Businesses Revenue Receipts Threshold Impacted Reduction $-0- to $10, $ - $-0- to $50, $ (90,947.00) $-0- to $100, $ (93,652.00) 1167 $ (184,599.00) Proposal #1 BPOL Threshold Tier 1 & 2 (No Fee) BPOL Threshold Tier License Fee Revenue License Fee Revenue License Fee Revenue License Fee Revenue Tier 1 $-0- to $10,000 $ - $ - $ - $ - $ - $ - $ $ 3, Tier 2 $10,001 to $50,000 $ - $ - $ $ 20, $ $ 20, $ $ 20, Tier 3 $50,001 to $100,000 n/a n/a n/a n/a $ $ 35, $ $ 35, $ - $ 20, $ 55, $ 59, $ (90,947.00) $ (90,947.00) $ (184,599.00) $ (184,599.00) $ (90,947.00) $ (70,367.00) $ (129,009.00) $ (125,559.00) * Similar to that adopted by Herndon & Vienna Adopted by Alexandria, Arlington & Fairfax Proposed BPOL Threshold Changes Proposal #2 Proposal #3 BPOL Threshold Tier 1 & 2 (w/fee on Tier 2)* BPOL Threshold Tier 1, 2 & 3 (w/fee on Tier 2 & 3) Proposal #4 BPOL Threshold Tier 1, 2 & 3 (w/fee on Tier 1, 2 & 3)

4 Attachment #3 BPOL Rate Comparison Wholesale Builder/Developer Contractor Retail Merchants Services (Business, Personal, Repair) Professional/ Real Estate &Financial Lessors of Property (Commercial) Lessors of Property (Residential) State Maximum City of Alexandria Arlington City of Falls Church City of Fairfax Fairfax County Town of Herndon Loudoun Prince William Town of Vienna No VA Average *Median (VA Cities) Locality Prince William Max. Threshold Amount $250,000 Loudoun $200,000 City of Alexandria $100,000 Arlington $100,000 Town of Vienna $50,000 City of Falls Church $10,000 City of Fairfax $10,000 Fairfax County Town of Herndon 10k-50k $30 >50k-100k $ k $30 >50k-100k $50 *All 39 Virginia Cities Per 2014 Weldon Cooper Survey State Maximum City of Fairfax No VA Average

5 AN ORDINANCE AMENDING CHAPTER 14, ARTICLE II, DIVISION 1, SECTION OF THE CODE OF THE CITY OF FAIRFAX, VIRGINIA, PERTAINING TO LICENSE TAXES APPLICABLE TO PERSONS HAVING GROSS RECEIPTS OF $50,000 OR LESS. BE IT ORDAINED by the City Council of the City of Fairfax, Virginia, that Section 14-33, Division 1, Article II, Chapter 14 of the Code of the city of Fairfax, Virginia is amended to read as follows: Sec License taxes not applicable to person having gross receipts of $10, $50,000 or less. No license tax shall be imposed on any person whose gross receipts are less than $10, for the immediately preceding year from a business, profession or occupation subject to licensure are less than $10, A license tax shall be the lesser of $30.00 per year or the license tax computed on any person whose gross receipts are between $10,001 and $50,000 for the immediately preceding year from a business, profession or occupation subject to licensure. This ordinance shall become effective January 1, INTRODUCED: PUBLIC HEARING: ADOPTED: Mayor ATTEST: Date City Clerk Votes Councilman DeMarco Councilman Greenfield Councilman Meyer Councilmember Miller Councilmember Schmidt Councilman Stehle

6 Sample Motion I MOVE TO INTRODUCE AN ORDINANCE AMENDING CHAPTER 14, ARTICLE II, DIVISION 1, SECTION OF THE CODE OF THE CITY OF FAIRFAX, VIRGINIA, PERTAINING TO LICENSE TAXES APPLICABLE TO PERSONS HAVING GROSS RECEIPTS OF $50,000 OR LESS. I FURTHER MOVE TO WAIVE THE FIRST READING AND SET THE PUBLIC HEARING FOR October 25, 2016.