Chamber of commerce to fight city of Lynchburg
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By Bryan Gentry
Published: November 19, 2008
The statewide chamber of commerce plans to take a stand with English Construction in the company’s lawsuit against the city of Lynchburg.
The board of directors of the Virginia Chamber of Commerce decided this week to file a brief with the Virginia Supreme Court, supporting English’s fight to not pay taxes to Lynchburg on work performed in other localities.
Keith Cheatham, the chamber’s vice president of government affairs, spoke on Wednesday at a “Raise Your Voice Rally” organized by the Lynchburg Regional Chamber of Commerce.
He touched on a number of issues, and told local business leaders that the taxation case has statewide significance. If the court rules in favor of the city, it could set a precedent allowing other localities to tax work done outside their borders.
“It’s an unfair tax on businesses,” Cheatham said after the meeting. However, “There are other localities saying, we don’t see it that way.”
The Virginia Supreme Court announced last week it would hear a case in which English Construction says Lynchburg should not charge business taxes on work English does in other localities that don’t charge a business license tax. English is seeking a refund for $185,472 in taxes paid over three years.
A Circuit Court ruled in favor of English earlier this year, but the city appealed to the Supreme Court.
Bert Dodson, Lynchburg’s vice-mayor and a local company president, said in the meeting that the case is “bigger than just Lynchburg.”
He would not give his personal opinion on the case, but he said, “The majority of (City) Council believed that (appealing the case) was the best thing to do.”
After the meeting he said that English Construction “probably would not have moved” from Altavista to the city if it knew about the tax.
The Lynchburg Regional Chamber of Commerce is not taking sides in the case, said Rex Hammond, chamber president. English Construction and the city of Lynchburg both are members of the chamber. Hammond’s reading of the lawsuit led him to believe it would not affect other businesses and other localities.
On other issues, Cheatham encouraged local businesses to take an active stance and explain their views, especially to local representatives.
Due to a shrinking budget and a tough economy, “We have made the decision that we need to tighten up and focus on issues of state significance, and leave the local issues up to you folks,” he said.
Another speaker, Moore Hallmark, executive director of the southeast region for the U.S. Chamber of Commerce, said businesses should not shy away from being active on controversial issues.
“You’re going to make someone mad, but if you’re going to be the voice of business in your community, you’ve got to take positions on issues.”
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Posted by ( FredSmithee ) on November 20, 2008 at 7:05 am
Actually, the issue is a little more complicated than Lynchburg simply being “greedy.“ Lynchburg wants to collect the BPOL (Business, Professional and Occupational Licensing) tax on businesses that have their principal place of operation in the City but perform work in other localities and (here’s the important part) that DO NOT pay the tax in those localities. Now, you may say that just becuase Danville (in this case) did not collect the tax from English Cnstruction for work done in the city, why should Lynchburg get to do so? That’s a fair question, and the one which the Court will decide. But look at it from Lynchburg’s viewpoint: English operates in Lynchburg and receives services from the city, but, like many large companies, its operations in Lynchburg support jobs all over the state (or even farther afield). In many cases, localities do not collect the tax simply because it would be an accounting nighmare (for example, suppose UPS were to be taxed on the value of the dilvery cost of each package delivered based on the delivery address rather than the address of the depot where the truck left from). So long as there is no double taxation, Lynchburd says why should English avoid paying taxes on its revenue when that revenue is earned (at least in part) through the support operations of the home office? In Lynchburg’s view (and I will qualify by saying I don’t happen to agree with this view—I think that the tax is due where the work is done and if the locality does not collect it, for whatever reason, so be it), it’s like the state’s requirement that taxpayers file the “sales tax on out-of-state purchases” form (I forget the number, CR-10 I think) when they buy things that are shipped from out-of-state and don’t pay sales tax in the point of origin. Lynchburg says, “If the tax is due, it should be paid to the government with a nexus to the taxpayer and the best ability to assess it.“
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Posted by ( observer ) on November 20, 2008 at 6:11 am
Why should a company pay tax on a job they do else where. So the city is saying if English goes to Danville to do a job, they have to pay the City of Lynchburg a Tax for going to Danville to do business? If that is what I am reading, someone is being awful greedy.
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