Letters to the Editor: November 11 – 17, 2015
F.C. Small Businesses Pay More Than Outside City
It may surprise many City residents to know that while they support mixed-use development – which presumably requires a vibrant business community – the City of Falls Church impairs the viability of its businesses, especially small businesses, by imposing significantly higher business license taxes than surrounding jurisdictions.
The City of Falls Church and Arlington and Fairfax Counties impose no business license tax for small businesses with gross receipts below $10,000, and they each impose a flat fee of $30 per year for businesses grossing up to $50,000 in revenue. However, above $50,000, there is a significant disparity between these jurisdictions. Arlington and Fairfax impose a flat fee of $50 for small businesses grossing up to $100,000. Falls Church, on the other hand, imposes normal (or large business) tax rates on all businesses with gross receipts exceeding $50,000. And, Falls Church generally imposes significantly higher business license taxes across the board for large businesses in comparison to surrounding jurisdictions.
This disparity has real consequences for small businesses. It means that a young lawyer or doctor who earns gross revenue of $100,000 would pay Arlington or Fairfax $50 in 2015 for a business license. However, Falls Church would charge a relatively whopping $520 (more than 10x higher) for the privilege of opening the same practice in Falls Church City. Similarly, a retail merchant with gross revenue of $100,000 would pay Arlington or Fairfax a $50 business license tax, but would pay Falls Church $190 (almost 4x higher).
For a City whose voters seem to want vibrant commercial development, there doesn’t appear to be any consideration given to the disincentive created by the City’s significantly higher business taxes on the attraction and retention of business.
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