More firms and vendors from outside of Albemarle that sell goods and services within the county may soon have to acquire a business license.
“We are in the midst of an analysis for economic development purposes comparing ourselves with other jurisdictions to see how our tax structures and a whole bunch of other things match up,” Tom Foley, Albemarle’s county executive, said earlier this week.
The Board of Supervisors will vote next week on whether to lower the threshold requiring non-Albemarle businesses to get a county license.
Currently, companies that make more than $100,000 in annual gross receipts within the county must get one, but that would be lowered to $25,000 under a staff proposal.
Charlottesville and the counties of Louisa, Greene and Augusta already use the $25,000 figure.
Supervisors held a public hearing on the matter Wednesday, but Foley recommended they defer action while staff works out the details.
“We don’t want to make a move into something that would put us at a competitive disadvantage in the midst of us trying to put together a competitive economic development program,” Foley said.
The Charlottesville Regional Chamber of Commerce opposes the change in part because of the additional paperwork that would be required for companies to comply.
“If you do $250,000 worth of business, it doesn’t matter where you are in Virginia because you’re going to be paying taxes on $250,000,” Chamber President Tim Hulbert said. “The fact that other communities have a $25,000 threshold is irrelevant. Albemarle can be a leader here. Be as business-friendly as you have been.”
The county’s finance director said lowering the threshold will not result in double taxation.
“The gross receipts attributable to Albemarle are deductible from the [home] jurisdiction,” said Betty Burrell, who has been the county’s finance director since 2011.
Burrell said affected businesses could end up paying just a flat fee of $50, but her staff needs to confirm.
“It’s based on their gross receipts,” she said.
Staff will continue to work on the ordinance before next week’s meeting. Supervisors wanted to know what the financial impact would be on the impacted businesses.
“I’m sure there are small contractors that would have to start to keep track of this,” said Liz Palmer, chairwoman of the Board of Supervisors.
Other recommended changes include elimination of proration of business taxes for new firms and addition of a 10 percent penalty if a company does not apply for a business license.
Some supervisors expressed concern that the county is beginning to enforce existing rules that require owners of rental property to also obtain a business license.
“A letter was forwarded to me by a person who has had a rental property since 1980 and they’ve just received a letter dated June 24 saying that they have to apply for a business license even though there’s no business going on there,” said Supervisor Ann H. Mallek.
“We have thousands of rental properties within the county,” she added.
Burrell said her department is now fully staffed and is able to enforce the county’s existing rental-by-owner regulations.
“We had a lull because we were short-staffed but we now have both business tax auditors in place and rental-by-owner enforcement is something that we have restarted,” she said.
Foley said the work of the finance department is to help the county ensure it has the financial resources to cover the growing cost of services.
“Their objective is equity and fairness, and that drives what they do,” Foley said. “We’re trying to think differently about some new things.”
