Zoning regulations and comprehensive plans plus tax rates are good indicators of the types of economic development a locality wants to encourage. This can guide the "what" goes "where" as well as influence related costs of doing business. This is one reason real estate professionals talk about "Location, location, location."
Are a locality's comp plan and zoning definitive and relatively fixed with a vision of the future, or are they plastic and easily modified for any given projects?
Do tax rates provide incentives for locating certain types of businesses, while serving to discourage other types?
In an effort to generate a certain level of increased revenue without impacting residential property owners, the Christiansburg Town Council adopted changes to the BPOL taxes effective July 1, 2008 (BPOL stands for Business, Professional & Occupational Licenses).
The new rates are "still based on $100.00 of your total gross" for the previous fiscal year. This formula equates to Gross / $100 X Tax Rate = Cost of Town Business License.
For non-business readers, gross is all sales or receipts before all expenses (personal property taxes, utilities, rent, capital expenses, payroll, benefits, inventory and so forth). Gross minus expenses equals profit (or losses), and for entrepreneurs this is what is used to (a) reinvest and grow your business and (b) live off of.
While there are six business categories for the BPOL, five increased anywhere from 22% up to 50%. Significantly, one did not increase -- instead, for wholesale businesses this tax was inexplicably reduced 50%. A cynic might say this was in anticipation of the Intermodal in Elliston. This is an easy assumption to dismiss since that proposed facility is in the county instead of town limits. But it sure looks like an incentive for anyone operating a wholesale business in Christiansburg.
Next post, we'll show some specific examples of what these increases look like for businesses.