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J. RONNIE MINTER <br /> <br /> COM'M IS~ION ER <br /> <br />OFFICE OF THE COMMISSIONER OF THE REVENUE <br /> <br /> MARTINSVILLE, VIRGINIA <br /> <br />To: <br /> <br />From: <br /> <br />Date: <br /> <br />Subject: <br /> <br />Earl Re olds, City Manager <br />J. RoT~Z~inter, CCR, Commissioner of the Revenue <br />February 3, 1999 <br /> <br />Proposed BPOL Changes <br /> <br /> This is in response to concems raised by Mayor Crabtree, Councilman Teague, and <br />Councilwoman Haskell relating to revenue and charitable organizations impact if proposed <br />BPOL amendments adopted. <br /> <br /> The only revenue impact that may occur will be with funeral services and professional <br />employer organizations (PEO). As you know, we have been issuing business licenses based on <br />total gross receipts for such businesses. Effective July 1, 1998 the Virginia Code Section 58.1- <br />3723.3 excludes from the taxable gross receipts of funeral sentice providers certain receipts that <br />are received from clients for products and services provided by third-party, businesses, which <br />collected receipts are directly passed through and paid to such. third-party businesses by funeral <br />service providers. Upon applying for a BPOL license, funeral service providers must list the <br />names of third-party businesses and the amount of receipts provided to such third-party <br />businesses. <br /> <br /> In addition, effective July 1, 1998 the Virginia Code Section 58.1-3732.4 exempts from <br />the local BPOL tax certain amounts from the gross receipts of professional employer <br />organizations (staffing firms). Specifically, these exempted amounts are wages, salaries, payroll <br />taxes, payroll deductions, employee benefits, workers compensation costs, and similar expenses <br />paid to contract employees pursuant to a services contract or a temporary services agreement. <br />Consequently, the taxable gross receipts of staffing finns would generally be administrative fees <br />received from clients. I estimate that revenue lost may be around $10,600.00 on funeral services. <br />and professional employer organizations each year. <br /> <br /> At the present time, I'm not aware of any "receipts from an unrelated trade or business <br />the income of which is taxable under Intemal Revenue Code 511 et seq." and other non-profit <br /> <br /> <br />