Virginia Administrative Code › Title 23 - TAXATION › Agency 10 - DEPARTMENT OF TAXATION › Chapter 500 - BUSINESS, PROFESSIONAL AND OCCUPATIONAL LICENSE TAX REGULATIONS › Section 23VAC10-500-20 - Authority to impose license tax

Current through Register Vol. 40, No. 24, July 15, 2024
A. Section 58.1-3703 of the Code of Virginia
				authorizes localities to enact an ordinance levying a local license (BPOL) tax
				or a fee, or both for issuing a license. Every ordinance adopted or maintained
				by a locality that levies a license tax is required to be substantially similar
				to the provisions in § 58.1-3703.1 of the Code of Virginia. Further,
				§§ 58.1-3703 and 58.1-3706 of the Code of Virginia set statutory
				maximums for license rates and fees. Localities may choose not to require a
				license or impose fees, or localities may assess rates and fees that are less
				than the maximums stated in the statute.
B. Localities may levy license taxes at rates
				above the statutory maximum only if subject to the "rollback" provisions of
				§ 58.1-3706B of the Code of Virginia. Any locality that had, on January 1,
				1978, a license tax rate for any of the categories listed in § 58.1-3706A
				of the Code of Virginia that is higher than the maximum prescribed in §
				58.1-3706A of the Code of Virginia, may maintain a higher rate in such
				category, but no higher than the rate applicable on January 1, 1978, subject to
				the following conditions:
(i) a locality may
				not increase a rate on any category that is at or above the maximum prescribed
				for such category in § 58.1-3706A of the Code of Virginia;
(ii) if a locality increases the rate on a
				category that is below the maximum, it shall apply all revenue generated by
				such increase to reduce the rate on a category or categories that are above
				such maximum; and
(iii) a locality
				shall lower rates on categories that are above the maximums prescribed in
				§ 58.1-3706A of the Code of Virginia for any tax year after 1982 if it
				receives more revenue in tax year 1981, or any tax year thereafter, than the
				revenue base for such year. The revenue base for tax year 1981 shall be the
				amount of revenue received from all categories in tax year 1980, plus one-third
				of the amount, if any, by which such revenue received in tax year 1981 exceeds
				the revenue received for tax year 1980. The revenue base for each tax year
				after 1981 shall be the revenue base of the preceding tax year plus one-third
				of the increase in the revenues of the subsequent tax year over the revenue
				base of the preceding tax year. If in any tax year the amount of revenues
				received from all categories exceeds the revenue base for such year, the rates
				shall be adjusted as follows: the revenues of those categories with rates at or
				below the maximum shall be subtracted from the revenue base for such year. The
				resulting amount shall be allocated to the category or categories with rates
				above the maximum in a manner determined by the locality, and divided by the
				gross receipts of such category for the tax year. The resulting rate or rates
				shall be applicable to such category or categories for the second tax year
				following the year whose revenue was used to make the calculation.