Charlottesville, VA – A local tax revenue report from The Free Enterprise Forum found the City of Charlottesville has the highest percentage of business generated local tax revenue (36.85%), Albemarle County (32.23%) and Nelson County (22%) finished second and third respectively. Fluvanna County had the lowest Business Local Tax Impact at 6.6%.
Free Enterprise Forum President Neil Williamson said, “For over fifteen years, our research has informed the debate and promoted dialog about local government. The Revenue Report provides citizens, and decision makers, an objective, locality-specific, metric to be used to compare local tax revenue streams between municipalities. Equipped with this data, citizens can ask better questions of elected officials during comprehensive plans, economic development and zoning discussions”.
The inaugural Revenue Report is based on an independent locality-specific calculation of commercial property tax revenue combined with other taxes generated, or collected, by businesses. Looking exclusively at Fiscal Year 2018, the Revenue Report utilizes self-reported data required to be provided to the Commonwealth of Virginia’s Auditor of Public Accounts. In addition, the Free Enterprise Forum worked with Treasurers, Commissioners of the Revenue, Finance Directors and their staffs to determine number of business licenses and reliable estimates regarding “other” tax revenue streams.
The Free Enterprise Forum highlighted business impact tax revenue as reducing economic pressure on individual homeowners. The report acknowledged Economist Milton Friedman’s theory that most business tax costs are passed through and eventually paid by the end user.
The report concludes:
There are several ways to look at the business impact data. The optimist might consider any amount of local business tax revenue to be helping relieve pressure on residential property taxpayers.
The pessimist might suggest that the level of local taxes paid by commercial entities should be a larger part of the revenue picture.
Realists, such as Economist Milton Friedman, might acknowledge that most “business” taxes are merely pass through costs to the end users (diners, customers, renters, etc.).
In conclusion, The Free Enterprise Forum’s Revenue Report provides citizens, and decision makers, an objective locality specific metric to be used to compare local tax revenue streams between municipalities. As mentioned in the preface, this analysis seeks to promote discussion and debate.
Armed with an objective metric such as The Revenue Report, to inform critical local economic development, zoning, and comprehensive planning discussions. In the end, it is up to the citizens to determine their ideal local revenue mix.
The Free Enterprise Forum is a privately funded public policy organization dedicated to individual economic freedom. The entire report, and supporting documentation, can be accessed under Reports Tab at www.freeenterpriseforum.org