City of Alexandria Implements New Business Tax System

News Highlights:

• The City has implemented a new business tax system for business license and business personal property taxes, which will create changes in the process for license renewal and tax return forms.

More Information:

• Business Tax
• Sample of New Business License Renewal Application

The City of Alexandria recently implemented a new business tax system for business license and business personal property taxes. The new system has created significant changes to business license renewal applications, which will be mailed to all registered business owners later this month. 

The following changes will affect businesses currently registered with the City:

• Each business has been issued a new account number or numbers for business license and business personal property taxes. All future assessments, billings, returns and correspondence will reflect the new account number or numbers. 
• In addition to the information normally reported on business license renewal applications, businesses will be asked to provide information on their corporate officers, if applicable. 
• The appearance of the annual business license renewal form and business personal property tax return will change to accommodate the new system. 

In addition to implementing the new business tax system, the City is currently working on creating additional payment methods for business license taxes.  When these new methods become available, the Finance Department will announce them at alexandriava.gov/Finance, issue a press release, and send an e-mail to all businesses on the department’s e-mail list. Businesses wishing to be included on the e-mail list for business tax announcements will be able to provide their e-mail addresses on a flyer included with the 2010 business license renewal application.

For more information on the City’s business tax policies and procedures, visit alexandriava.gov/BusinessTax. 
 
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HEALTHCARE REFORM AND BUSINESS---Speaking to WEBA members on Sept. 16 at Clyde’s in Alexandria, a congressional aide offered a chilling forecast:  “If we can’t find a way to control healthcare costs, the country will go bankrupt,” noted Frank Shafroth, chief of staff for Rep. Jim Moran (D-VA).  And this isn’t just a domestic issue, he emphasized, but a global one,recounting President Obama’s recent meeting with his Chinese counterpart.  Rising healthcare costs in the U.S. are a major concern for Chinese officials, he said, since China holds $1 trillion in U.S.Treasury bills, and they don’t want the U.S. to default on them because of burgeoning debt.  On a more upbeat note, Shafroth said the main issues of disagreement are not partisan, but philosophical. There is broad agreement that: any legal resident and legal immigrant should be able to obtain health insurance and that any pre-existing conditions should not be an impediment to getting coverage. He said Congress needs to involve states, cities and counties in these discussions because of the cost sharing at different levels. The House bill has provisions to limit drug advertising and Obama has promised some pilot projects to deal with tort reform.  But he promised it will be a difficult “Kabuki dance” to reconcile the differing bills.

For the first time in U.S. history, the leading source of revenue for the states is federal grants, because of the stimulus package, but they will disappear in January 2011, Schafroth said..  In Virginia, the federal government is paying 53% for the cost of Medicaid, and the state is paying 47%---making it the state’s largest expenditure.

In a preview of the key provisions of the proposal offered later that day by Senate Finance Chairman Max Baucus (D-MT), Schafroth offered this assessment:

• Premium Subsidy: The proposal would require everyone to have insurance, but recognizes that many low- and moderate-income people will need subsidies to afford the premiums. The proposal’s mechanism for providing that assistance is a Health Care Affordability Tax Credit. It would work like this: People who buy insurance through a state exchange would report their modified adjusted gross income for the prior tax year. If they are eligible for the creditundefinedwhich is based on an income-related sliding scaleundefinedthey’d pay their premium minus the credit to the insurance company and the Treasury would pay the difference directly to the insurer.   

• Small business tax credit: A separate credit of up to 35 percent would be available to small businesses that offer insurance to employees in 2011 and 2012, and of up to 50 percent for those small firms that buy insurance through the exchanges starting in 2013. The full benefit, however, would be limited to firms with 10 or fewer workers who make an average of $20,000 or less, and the credit phases out completely for businesses with more than 25 employees or with average taxable wages of $40,000 or more.

• Pre-tax health benefits: The proposal would create a new Simple Cafeteria Plan that is intended to make it easier for workers to purchase pre-tax benefits. It would make the plan available to the self-employed and also add private long-term care insurance as a cafeteria plan option. At the same time, however, the proposal would limit annual contributions to Health Flexible Savings Accounts to $2,000 starting in 2013. This year, the FSA cap is $3,000 for singles.

• Taxing High-Cost Insurance Plans: Starting in 2013, Baucus would impose a 35 percent excise tax on insurance companies for plans valued at more than $8,000 for individuals and $21,000 for couples. While the tax would be imposed on insurers, it is likely that much of the levy would be passed on to insured workers. The threshold would be raised for the 17 highest cost states for the first 3 years. However, the cap would be tied to overall consumer prices not increases in medical costs, which rise much faster. Thus, while it would apply to very few policies at first, it would bite harder as the years went on. The Joint Committee on Taxation estimates this provision would raise almost $215 billion over just 7 years (2013-2019). By 2019, it would raise more than $50 billion annually  

• Insurance and Provider Fees: Baucus would raise about $13 billion by imposing separate taxes--he calls them fees-- on health insurance companies, large pharmaceutical and medical device manufacturers, and clinical labs.