The Chesapeake City Council unanimously approved a new ordinance reducing the business license tax. The previous threshold of the first $100,000 of gross receipts being non-taxable income has now doubled to $200,000. This new deduction will go into effect January 1, 2019. This means an additional 1,265 businesses will pay only a $50 business license tax to the City. It is the first city in Hampton Roads to reduce small business license taxes.
The resolution was unanimously supported by the Chesapeake Division of the Hampton Roads Chamber and the Chesapeake Economic Development Authority. The business license tax threshold was set at $100,000 in 1997. With increased costs of rent, labor, utilities, and goods; business revenues were forced to increase yet the tax threshold has not changed for 20 years. Consequently, small businesses were paying more in taxes every year whether or not they made any profit. A $200,000 threshold will enable more businesses to survive and help keep up to 2,500 employees working.
“There is no question that small businesses create more net jobs than do large companies – and this resolution is designed specifically to help create new jobs while simultaneously fostering new investment and promoting innovation. This change will strengthen and retain existing businesses and attract new ones, particularly small business start-ups who are very sensitive to the adverse impacts of the BPOL tax. We want Chesapeake to be where small businesses want to start, grow and stay. Currently, Hampton Roads has declining job growth. We believe this will be a catalyst to reverse this trend and result in greater tax revenues for our city” said Councilman Roland Davis.