Loudoun County Commissioner of the Revenue, Robert S. Wertz, Jr., recently asked the Board of Supervisors to change the Business Tangible Personal Property (BTPP) Reporting Deadline from April 15 to March 1 starting in Tax Year 2018.
Why is this Important?
The County’s BTPP revenues have increased significantly over the last few years, from $70 million in Calendar Year (CY) 2013 to an estimated $155 million for CY 2016. This growth is primarily, but not solely, attributable to the large amount of new computer equipment being moved into data centers in the County and is expected to continue for the foreseeable future as new data centers are built and equipment in existing data centers is replaced. Since the tax is based on the cost of equipment as self-reported by property owners, it is increasingly difficult to accurately forecast BTPP tax revenue.
Under the current timetable, the Board of Supervisors sets the real estate tax rate prior to the present BTPP filing deadline of April 15th. In other words, the Board sets the real estate rate about 2 weeks before the value of BTPP assets is known for that year. If BTPP value estimates are too low, the real estate rate may be set too high. Conversely, if BTPP value estimates are too high, the real estate rate may be set too low.
By moving the BTPP filing deadline up to March 1, valuation, and projected BTPP revenue, will be known before the real estate tax rate is set. From the County’s perspective this makes good business sense.
What does this mean for Loudoun’s Businesses?
This proposal does not affect the due dates for payment of the tax or the amount of taxes assessed. The BTPP Tax payment Due Date will remain unchanged.
However, the filing and payment of Business Professional and Occupational License (BPOL) taxes is March 1, and a change to the due date for BTPP tax filings could lead to increased confusion and compliance costs as businesses concentrate workload currently spread over two deadlines into one.
In addition, moving the BTPP reporting date to March 1st decouples it from the Federal Income Tax filing date, again, potentially increasing confusion and compliance costs for business owners.
For many businesses, particularly small or sole proprietor businesses, keeping up with regulatory requirements, like tax filings, can be a significant cost in terms of money and time.
What can you do?
Before the Board of Supervisors takes action, your Supervisor, and the Board Chair, need to know how this change impacts your business. You can do that in a few easy ways.
The Board of Supervisors will receive public comment regarding the proposal on Wednesday, December 14th at 6 PM in the Board of Supervisors’ Meeting Room.
By Mail or Phone:
Loudoun County Board of Supervisors
1 Harrison Street, S.E., Fifth Floor
P.O. Box 7000
Leesburg, VA 20177-7000
Comment Line: 703-777-0115