Jan 09, 2010

Businesses don't see change as a positive

Legislature considers bills affecting businesses

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By: BY CHELYEN DAVIS

Virginia businesses will be playing defense during the upcoming legislative session, hoping to ward off proposed tax changes and any bill that could hurt their bottom lines.

Outgoing Gov. Tim Kaine has proposed a budget that would eliminate a "dealer discount," money from the sales tax that retailers historically have kept, and would implement an "accelerated sales tax" payment next summer.

Small businesses, at least, oppose both.

Julia Hammond, director of the Virginia chapter of the National Federation of Independent Business, said those two tax proposals are a "double whammy" on retailers.

"Retail has taken a heck of a hit in this economic climate," Hammond said. "Yes, some of the end-of-the-year sales numbers do seem a bit better than anticipated, but they're certainly not to a point where people's cash flows are in an area where they could afford an accelerated sales tax."

Hammond said the small-business community's main priority this session is simply keeping the status quo, because even small changes can cost businesses.

"They just do not want the rules to change," she said. "Every time you have to change the way you remit something, you have to alter a payroll procedure, change the way you report something, whatever it may be, there's a cost to it."

There may be good news for businesses in the halls of the General Assembly, though. The recession has state officials looking for ways to help boost businesses and create jobs.

Gov.-elect Bob McDonnell has said he will propose tax credits and other incentives to help spur job creation.

He also campaigned last year on promises to streamline regulations and bureaucratic paperwork for businesses.

Hammond said that while businesses don't want change, incentive-based proposals are more attractive because they don't create new requirements for businesses.

"When you incentivize it rather than mandating it, it's always a welcome way of doing it," she said.

Legislators are still filing bills, but already several have been filed to ease burdens on businesses.

Del. Mark Cole, R-Spotsylvania, has two bills to limit the BPOL (business, professional and occupational license) tax, which is levied at the local level.

One bill would bar localities that don't already charge a BPOL tax on businesses from doing so in the future, and would prevent any locality from raising BPOL rates. The other bill would allow businesses to choose whether they pay the tax on their gross receipts (as is done now) or on state taxable income.

Another delegate has a bill to eliminate the corporate income tax, while state Sen. Richard Stuart, R-Westmoreland, is preparing legislation to give businesses a tax cut if they locate outside the state's congested "non-attainment" areas ("non-attainment" is a government definition based on air quality).

Del. Harry Purkey is pro-posing a joint subcommittee to study the impediments to small businesses' ability to provide health insurance to workers.

Last year legislators passed a law allowing insurance providers to offer small businesses insurance plans that didn't include all the mandated coverage that most plans in Virginia must include. Hammond said insurance companies are developing such plans, and that her organization will also be looking into other ways to make health insurance more affordable for small businesses.

Hammond also said the NFIB will continue to oppose expanding eligibility for unemployment benefits, something Democrats wanted to do last year so that Virginia could get more federal stimulus money.

"There's not going to be a lot of money to go around, so unless it's an incentive program, any new mandates, any new taxes, anything that increases the cost of doing business just is not going to help in this economy," she said.

 

Chelyen Davis: 540/368-5028
Email: cdavis@freelancestar.com

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