78620858.1-3706Virginia Decodedhttps://vacode.org2016TaxationLocal TaxesLicense TaxesLimitation on rate of license taxesCode 1950, § 58-266.1; 1950, p. 155; 1956, c. 242; 1964, c. 424; 1968, c. 619; 1970, cc. 231, 547; 1974, cc. 196, 438; 1975, cc. 23, 621; 1976, cc. 521, 719; 1977, c. 320; 1978, cc. 772, 799, 817; 1979, cc. 565, 568, 570; 1980, cc. 318, 736; 1981, cc. 419, 636; 1982, cc. 348, 548, 552, 554, 558, 633; 1983, c. 554; 1984, cc. 247, 675, 695; 1985, c. 120; 1989, c. 589; 1992, c. 632; 1993, c. 918; 1996, cc. 77, 715, 720; 2006, c. 763; 2010, cc. 255, 295; 2016, c. 305.HAMPTON NISSAN LTD. v. City of Hampton950732466 S.E.2d 951996-01-12https://www.courtlistener.com/opinion/1060209/hampton-nissan-ltd-v-city-of-hampton/ . . . collection of license taxes on businesses. Code § 58.1-3706 establishes the maximum rate of . . . <abbr title="Supreme Court of Virginia">SCV</abbr>City of Lynchburg v. ENGLISH CONST.081344675 S.E.2d 1972009-04-17https://www.courtlistener.com/opinion/1058361/city-of-lynchburg-v-english-const/ . . . city or town." (Emphasis added.) Code § 58.1-3706 imposes limitations upon the tax rates that the . . . <abbr title="Supreme Court of Virginia">SCV</abbr>Ford Motor Credit v. Chesterfield County092158707 S.E.2d 3112011-03-04https://www.courtlistener.com/opinion/1058078/ford-motor-credit-v-chesterfield-county/ . . . assessment of BPOL taxes. The provisions of Code § 58.1-3706 impose limits on the rate of taxation . . . <abbr title="Supreme Court of Virginia">SCV</abbr>HAMPTON NISSAN LTD. v. City of Hampton950732466 S.E.2d 951996-01-12https://www.courtlistener.com/opinion/1060209/hampton-nissan-ltd-v-city-of-hampton/ . . . collection of license taxes on businesses. Code § 58.1-3706 establishes the maximum rate of . . . <abbr title="Supreme Court of Virginia">SCV</abbr>City of Lynchburg v. ENGLISH CONST.081344675 S.E.2d 1972009-04-17https://www.courtlistener.com/opinion/1058361/city-of-lynchburg-v-english-const/ . . . city or town." (Emphasis added.) Code § 58.1-3706 imposes limitations upon the tax rates that the . . . <abbr title="Supreme Court of Virginia">SCV</abbr>Ford Motor Credit v. Chesterfield County092158707 S.E.2d 3112011-03-04https://www.courtlistener.com/opinion/1058078/ford-motor-credit-v-chesterfield-county/ . . . assessment of BPOL taxes. The provisions of Code § 58.1-3706 impose limits on the rate of taxation . . . <abbr title="Supreme Court of Virginia">SCV</abbr>http://law.lis.virginia.gov/vacode/58.1-3706/58.1-3510.4Short-term rental property; short-term rental businesses/58.1-3510.4/58.1-3703Counties, cities and towns may impose local license taxes and fees; limitation of authority/58.1-3703/58.1-3712Counties and cities authorized to levy severance tax on gases/58.1-3712/58.1-3713Local gas road improvement and Virginia Coalfield Economic Development Authority tax/58.1-3713//58.1-3706/58.1/III/37/58.1-370658.1-370358.1-371758.1-372058.1-3733Except as specifically provided in this section and except for the fee authorized in § 58.1-3703, no local license tax imposed pursuant to the provisions of this chapter, except §§ 58.1-3712 and 58.1-3713, or any other provision of this title or any charter, shall be imposed on any person whose gross receipts from a business, profession or occupation subject to licensure are less than: (i) $ 100,000 in any locality with a population greater than 50,000; or (ii) $ 50,000 in any locality with a population of 25,000 but no more than 50,000. Any business with gross receipts of more than $ 100,000, or $ 50,000, as applicable, may be subject to the tax at a rate not to exceed the rate set forth below for the class of enterprise listed:sectionAA1 For contracting, and persons constructing for their own account for sale, sixteen cents per $ 100 of gross receipts;sectionA1A12 For retail sales, twenty cents per $ 100 of gross receipts;sectionA2A22 For financial, real estate and professional services, fifty-eight cents per $ 100 of gross receipts; andsectionA3A32 For repair, personal and business services, and all other businesses and occupations not specifically listed or excepted in this section, thirty-six cents per $ 100 of gross receipts.The rate limitations prescribed in this section shall not be applicable to license taxes on (i) wholesalers, which shall be governed by § 58.1-3716; (ii) public service companies, which shall be governed by § 58.1-3731; (iii) carnivals, circuses and speedways, which shall be governed by § 58.1-3728; (iv) fortune-tellers, which shall be governed by § 58.1-3726; (v) massage parlors; (vi) itinerant merchants or peddlers, which shall be governed by § 58.1-3717; (vii) permanent coliseums, arenas, or auditoriums having a maximum capacity in excess of 10,000 persons and open to the public, which shall be governed by § 58.1-3729; (viii) savings institutions and credit unions, which shall be governed by § 58.1-3730; (ix) photographers, which shall be governed by § 58.1-3727; and (x) direct sellers, which shall be governed by § 58.1-3719.1.sectionA4A42Any county, city or town which had, on January 1, 1978, a license tax rate, for any of the categories listed in subsection A, higher than the maximum prescribed in subsection A may maintain a higher rate in such category, but no higher than the rate applicable on January 1, 1978, subject to the following conditions:sectionBB1 A locality may not increase a rate on any category which is at or above the maximum prescribed for such category in subsection A.sectionB1B12 If a locality increases the rate on a category which is below the maximum, it shall apply all revenue generated by such increase to reduce the rate on a category or categories which are above such maximum.sectionB2B22 A locality shall lower rates on categories which are above the maximums prescribed in subsection A 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.sectionB3B32Any person engaged in the short-term rental business as defined in § 58.1-3510.4 shall be classified in the category of retail sales for license tax rate purposes.sectionCC1 Any person, firm, or corporation designated as the principal or prime contractor receiving identifiable federal appropriations for research and development services as defined in § 31.205-18 (a) of the Federal Acquisition Regulation in the areas of (i) computer and electronic systems, (ii) computer software, (iii) applied sciences, (iv) economic and social sciences, and (v) electronic and physical sciences shall be subject to a license tax rate not to exceed three cents per $ 100 of such federal funds received in payment of such contracts upon documentation provided by such person, firm or corporation to the local commissioner of revenue or finance officer confirming the applicability of this subsection.sectionD1D12 Any gross receipts properly reported to a Virginia locality, classified for license tax purposes by that locality in accordance with subdivision 1 of this subsection, and on which a license tax is due and paid, or which gross receipts defined by subdivision 1 of this subsection are properly reported to but exempted by a Virginia locality from taxation, shall not be subject to local license taxation by any other locality in the Commonwealth.sectionD2D22 Notwithstanding the provisions of subdivision D 1, in any county operating under the county manager plan of government, the following shall govern the taxation of the licensees described in subdivision D 1. Persons, firms, or corporations designated as the principal or prime contractors receiving identifiable federal appropriations for research and development services as defined in § 31.205-18 (a) of the Federal Acquisition Regulation in the areas of (i) computer and electronic systems, (ii) computer software, (iii) applied sciences, (iv) economic and social sciences, and (v) electronic and physical sciences may be separately classified by any such county and subject to tax at a license tax rate not to exceed the limits set forth in subsections A through C above as to such federal funds received in payment of such contracts upon documentation provided by such persons, firms, or corporations to the local commissioner of revenue or finance officer confirming the applicability of this subsection.sectionD3D32