§ 58.1-3706. (For applicability provisions /- See Editor's note) Limitation on rate of license taxes.
A. Except 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, 58.1-3712.1 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:
1. For contracting, and persons constructing for their own account for sale, sixteen cents per $100 of gross receipts;
2. For retail sales,
twenty cents ten cents per $100 of gross
3. For financial, real estate and professional services, fifty-eight cents per $100 of gross receipts; and
4. 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.
B. Any county, city or town which had, on January 1,
1978 2003, 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 2003, subject to the
1. A locality may not increase a rate on any category which is at or above the maximum prescribed for such category in subsection A.
2. 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.
3. A locality shall lower rates on categories which are above the maximums
prescribed in subsection A for any tax year after
1982 2004 if it receives more revenue in tax year 1981
2003, or any tax year thereafter, than the
revenue base for such year. The revenue base for tax year 19812003 shall be the amount of revenue received from all
categories in tax year 1980 2002, plus
one-third of the amount, if any, by which such revenue received in tax year 1981
2003 exceeds the revenue received for tax year 1980
2002. The revenue base for each tax year after 1981
2003 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.
C. Any person engaged in the short-term rental business as defined in § 58.1-3510 shall be classified in the category of retail sales for license tax rate purposes.
D. 1. 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.
2. 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.
3. 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.