City of Fairfax, Virginia City Council Work Session
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1 City of Fairfax, Virginia City Council Work Session Agenda Item # 13c City Council Meeting 11/17/2015 TO: FROM: SUBJECT: ISSUE(S): Honorable Mayor and Members of City Council Robert Sisson, City Manager Discussion of City of Fairfax Business, Professional and Occupational (BPOL) rate/threshold comparison with other regional jurisdictions. Whether or not the City s BPOL rate/threshold should be adjusted in order to create a more pro-business environment. SUMMARY: It has been some time since a review of the City s BPOL rate/threshold has been conducted. The Commissioner of Revenue has prepared a summary of local BPOL rates in Northern Virginia to determine how our rates compare. The City s BPOL rates are lower in several categories when compared with other Northern Virginia localities, however, falls within the average range in Northern Virginia. Based on this information, the City is not considered to be at a competitive disadvantage with regard to business retention and attraction. The data does show however, that the City has the lowest BPOL threshold in the region. The City has an opportunity to increase the threshold to be more in line with the surrounding communities, create a more pro-business environment, with minimal fiscal impact. The Commissioner has prepared several proposals for the Council s consideration which include increasing the BPOL threshold and imposing a license fee to minimize the reduction in BPOL revenues. Further, staff will return to Council in January with additional measures to improve the City s business climate. FISCAL IMPACT: RECOMMENDATION: ALTERNATIVE COURSE OF ACTION: RESPONSIBLE STAFF/ POC: COORDINATION: ATTACHMENTS: Varies. Receive presentation. Do not receive presentation. Page Johnson, Commissioner of Revenue Nicole Hange, Economic Development Comparison Chart
2 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
3 BPOL Threshold Comparison Locality Threshold Tier One Threshold Tier Two Threshold Tier Three 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
4 BPOL Rate Change Impact BPOL Category BPOL Revenue by Category % Northern Virginia City of Fairfax Fairfax County Effect of.01 +/- on Average Tax Rate Rate* Revenue Rate* Revenue +/- Rate* Revenue +/- Retail $ 2,632, % 0.20 $ 2,632, $ (394,908.00) 0.20 $ - $ 131, Service $ 2,012, % 0.27 $ 2,012, $ (596,149.63) 0.31 $ 298, $ 74, Professional $ 1,899, % 0.40 $ 1,899, $ (427,387.05) 0.48 $ 379, $ 47, Wholesale $ 1,090, % 0.05 $ 1,090, $ (218,069.60) 0.07 $ 436, $ 218, Comm. Rental $ 377, % 0.23 $ 377, $ 49, $ 115, $ 16, Contractor $ 322, % 0.16 $ 322, $ (100,649.38) 0.15 $ (20,129.88) $ 20, Telecomm $ 101, % $ 101, Fed. R/D $ 47, % $ 47, Res. Rental $ 44, % 0.50 $ 44, $ (21,137.28) 0.35 $ (13,210.80) $ Misc. $ 18, % $ 18, Total $ 8,546, % $ 8,546, $ (1,709,001.54) $ 1,195, $ 509, BPOL Tax Revenue by Category Retail Service Professional Wholesale Comm. Rental Contractor Telecomm Fed. R/D Res. Rental
5 BPOL Revenue Reduction by Threshold # of Projected Increase BPOL Gross Businesses Revenue Receipts Threshold Impacted Reduction $-0- to $10, $ - $-0- to $50, $-0- to $100, $ (93,652.00) 1167 $ (184,599.00) Proposal #1 BPOL Threshold Tier 1 & 2 (No ) BPOL Threshold Tier Revenue Revenue Revenue 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, $ (184,599.00) $ (184,599.00) $ (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/ on Tier 2)* BPOL Threshold Tier 1, 2 & 3 (w/ on Tier 2 & 3) Proposal #4 BPOL Threshold Tier 1, 2 & 3 (w/ on Tier 1, 2 & 3)
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