The Prince William County Board of Supervisors has adopted an ordinance that will impose a business license tax on every type of business in the county.
Officials predicted that the Business, Professional and Occupational License tax, which goes into effect Jan. 1, will generate $1.9 million in new revenue next year.
Anyone wanting to do business in the county will be required to buy a license and pay a tax based on gross receipts. About 150 people opposed to the new tax attended the Tuesday night meeting at which the board voted 4 to 3 for the tax. Most of those who spoke supported a flat license tax, ranging from $25 for real estate agents to $150 for doctors and lawyers.
Woodbridge Supervisor Donald E. Kidwell said he opposed the new tax because it penalizes businesses that are labor intensive. "These businesses have a smaller margin of profit and yet their gross receipts could be high," he said. Kidwell owns a business in Manassas that pays a business license tax based on gross receipts.
The tax replaces the present capital business tax, which taxes only businesses with inventories, such as car dealerships or clothing stores. There are about 1,100 such businesses in the county, and the capital business tax would have produced $595,000 in revenue next year, according to projections.
The new tax will affect about 3,000 businesses, including doctors, lawyers, real estate agents and others not previously taxed.
Prince William is the largest Northern Virginia jurisdiction that has not implemented a license tax since the state legislature revised the law allowing it two decades ago.
In proposing a $135.7 million budget this month, County Executive Robert Noe told the board the adoption of a license tax was necessary to diversify the county's revenue base. It would be a more equitable tax in which all businesses would pay a fair share, he said.
The first public hearing on the tax on March 5 drew several dozen business and professional people.
According to Deputy County Attorney Elizabeth Whiting, some of those who spoke against the ordinance objected to having to reveal their gross income, while others said they would prefer a flat license tax.