From: Robert Sweeney <rsweeney@pwchamber.org>
Sent: Wednesday, March 27, 2024 5:25 PM
To: BOCS Chair <chair@pwcgov.org>; Gordy, Tom <TGordy@pwcgov.org>; Vega, Yesli <yvega@pwcgov.org>; Weir, Bob <BWeir@pwcgov.org>; Angry, Victor S. <VSAngry@pwcgov.org>; Boddye, Kenny <kboddye@pwcgov.org>; Bailey, Andrea <abailey@pwcgov.org>; Woodbridge District <WoodbridgeDistrict@pwcgov.org>
Cc: Shorter, Christopher <CShorter@pwcgov.org>; Gary L. Jones – Summit Community Bank (gljones@summitfgi.com) <gljones@summitfgi.com>; Snare IV, Ross W *HS <MPZ8DE@uvahealth.org>; Margeaux Clark <mclark@pwchamber.org>
Subject: Computer & Peripheral’s Tax Increase
Dear Chair Jefferson and Board of County Supervisors:
We are writing you today on behalf of the 1,400 members of the Prince William Chamber of Commerce. We are very concerned about the direction the Prince William County Board of Supervisors is heading with regard to the Computer and Peripheral tax assessment. We understand that the Chairman has assembled enough votes to pass a $1.55 tax hike in the Computer & Peripheral Tax rate imposed on companies that have technology in their place of business. A 72% increase that would be effective July 1, 2024!
However, in order to create a stable and predictable business environment which will allow more than 5,000 small businesses in the County time to plan strategically for technology related purchases and expansions, the Chamber of Commerce encourages the adoption of a four-year tiered increase.
We also strongly encourage the Board to look at developing an exemption for businesses that have under $50,000 worth of equipment subject to the tax as a way to support our important and thriving small business community. A similar concept was enacted for the BPOL tax and it has been viewed as a successful example of how to support and encourage smaller businesses. Just raising the tax because you have the votes to do so is extremely aggressive and exhibits an unpredictable government action that discourages small business owners. This is not at all supportive of a stable, growing and nurturing business environment we have been working very hard to achieve. Ultimately, we are extremely concerned about the damage your immediate tax increase will cause to our small business community by nearly doubling their tax assessment with no notice or time to plan accordingly.
It is our understanding that those who want to increase this tax are doing so because they want to capitalize on the data centers that have an immense amount of computers inside them, therefore, also having a huge tax obligation under this tax. The issue at stake with this sort of thinking is twofold. First and foremost, the vast majority of computers in our data centers are owned by the Federal Government, and mostly by the Intelligence Community. These computers are not subject to tax assessments. Second, those computers inside approximately half of our data centers considered “co-location data centers”, belong to companies that have never filed a certificate of occupancy with Prince William County, therefore, flying completely under the radar of any county tax authority. You are not collecting taxes from companies if you do not know they exist.
There are 5,056 businesses in Prince William County that are not data centers that report and pay this tax every year. These businesses, in 2023 paid an average of $253 for their Computer and Peripheral tax obligation (at the current tax rate of $2.15 per $100 of assessed value). That equates to roughly a total of $1,280,000 for the non-data center business community. If you raise their taxes next year to $3.70 per $100 of assessed value, their total will be $2,150,000. As a business community, we are frustrated and embarrassed that our Board of Supervisors would take a position to hurt over 5,000 businesses for less than $1,000,000 in added revenue with less than 90 days’ notice.
Instead of an unpredictable and harmful immediate tax increase, the Prince William Chamber of Commerce is recommending that you achieve your proposed maximum tax rate of $3.70 but do so in a predictable and advertised manner that allows our more than 5,000 small businesses time to plan strategically and make accommodations for the 72% tax increase. Our proposal, having vetted this with the business community, is that you will look at the below table for guidance as you set the computer and peripheral tax rates for the next four years. The business community is hopeful that you will commit to this predictability as you move forward in your deliberations.
2024….. $2.55
2025….. $2.95
2026….. $3.35
2027….. $3.70
So, in conclusion, the Prince William Chamber of Commerce is pleading with the Prince William County Board of Supervisors to consider two actions: first, we encourage the Board to look at developing an exemption for businesses that have under $50,000 worth of equipment subject to the tax – similar to your existing BPOL structure. And second, if you feel you must raise the tax rate, do so in a steady, predictable way so that our businesses are afforded time to plan accordingly. Business owners can make strategic spending decisions if this is done in steps over a four-year period.
Respectfully,
Gary L. Jones II
Chairman of the Board
Prince William Chamber of Commerce
Ross Snare IV
Chairman, Legislative Council
Prince William Chamber of Commerce
Robert Sweeney
President & CEO
Prince William Chamber of Commerce
9733 Buchannan Loop
Manassas, VA 20110
e. rsweeney@pwchamber.org
m. 202.271.1740
o. 703.368.6600