Virginia Tax Commissioner Janie Bowen released a ruling last week in the ongoing dispute between Norfolk Commissioner of the Revenue Sharon McDonald and some local businesses. The issue surrounds implementation of the BPOL tax. BPOL, which stands for Business, Professional and Occupational License, is a tax imposed on businesses for the privilege of doing business in that locality. The dispute between the Commissioner and the businesses has had the direct result of her being challenged this fall by independent candidate Doug Knack.
The regulations for administering the BPOL tax can be found in the 2000 Rulings of the Tax Commissioner, Document number 00-3.This was issued after the BPOL tax was streamlined by acts of the General Assembly.
Last fall, I became aware of the dispute between McDonald and certain businesses regarding the license classifications. The question was whether those businesses were retail – and thus paid tax at the rate of 20 cents per $100 on gross receipts – or whether they were service – and paid a higher 36 cents per $100. The rate only applies if gross receipts are in excess of $100,000. In addition, there was the issue of whether dual licenses were appropriate. Attempts to resolve the problems were unsuccessful. The dispute finally became public with this report last May. On behalf of one of the businesses, Retail Alliance, the local merchants’ association, hired an attorney who specializes in the BPOL tax and an appeal was filed. The ruling, which takes the form of a non-binding advisory opinion, came down in mostly in favor of the Norfolk business.
The response of the owner of the business can be seen in the video below, from our local WVEC TV station.
You will note that the opinion is a non-binding advisory one. Here’s the kicker: the Commissioner of the Revenue, like other constitutional officers, has only one real boss – the voters. While the Virginia Tax Commissioner is charged with providing guidelines, the local CoR is not bound by them. If a CoR chooses, s/he can ignore these.
CoRs are, however, restricted by the laws of the Commonwealth, as well as by local ordinances. Norfolk Council could have, quite easily, solved the major issue in this dispute long ago by simply including appropriate language into the city’s ordinances to make it clear that certain services were ancillary – as defined in Title 23 VAC 10–500-110 B – to the primary activity of the business. That Norfolk Council failed to act on this, even when members were provided information to do so, should give all Norfolk residents pause.
This isn’t, by the way, the first time the Norfolk CoR has been overruled. Last time, it took the General Assembly to do it. Let’s hope she decides to abide by the Tax Commissioner’s opinion – promptly.
Whether she does or does not, Norfolk voters should know that they have a choice in this election. Doug Knack has promised fairness and equity, something that should be a given in an elected official.
VIVIAN J. PAIGE | All Politics is Local 
I was just looking at some office space in Ghent for my consulting and T-shirt business, as I do with all proffessionals I meet, I ask them to run for city council. He went on a long diatribe about how Sharon McDonald once sent him a letter demanding (not asking) for a list of all of his clients and their contact information. Obviously he refused and he recieved several more letters, each one more threatening than the last. This is not the kind of conduct we need from our elected officials. If you live in Norfolk, vote Doug Knack on Nov 3.
So, a few points of failure, here. First, it seems that Sharon McDonald is more interested in asserting her power than helping build a cohesive taxation regime. But alas, we sometimes end up with folks like that, so there are other mechanisms in place. Except those mechanisms failed here, too. The Norfolk Council has a duty, I think, to exercise the powers it is given to ensure that its citizens are well served (in this case, by an implementation of the BPOL that is recommended by the Virginia Tax Commissioner). And as you point out, it didn’t, and you have to wonder why.
Of course, this could all be sorted out by Richmond making the Virginia Tax Commissioner opinions more than advisory. But that would probably be provided by a larger version of the same petty turf war I’m guessing prevented the Norfolk Council from acting.
One of the reasons that folks like to give for Virginia being a Dillon Rule state is that it is designed to minimize corruption at the local level (not saying this is corruption, mind you). But when the systems fail – and they certainly failed here – there is no backstop. The only recourse is the courts or the ballot box.
Could we get the GA to do something? Probably not. They are a product of the exact same failed system.
Bum rush city council, May elections, 2500ish votes wins it. At this point it won’t matter who the candidates are, I can pull 2500 votes against city council no problem. Especially in ODU and the projects.
To answer your “wonder why,” take a look at Sharon McDonald’s past campaign and fundraising materials. It is not a coincidence that Sharon McDonald and City Council member Daun Hester have had their images together on a fair number of those items.
Sharon is a Darwinian when it comes to matters of finances and is well known among insiders for her “HEART OF COAL.” How do I know that? Here are a few examples.
1.Her staff are public employees, which means their files are public records. One of them, named [name removed], is documented in Norfolk personnel files as being “afraid” of Sharon McDonald. If it is not in her personnel file anymore, let me know. I may still have a copy of that document.
2.Sharon makes in excess of 20 times more than does her lowest paid worker, and that’s her Norfolk salary alone. She pays local taxes as though she were middle class.
3.When it’s budget time, Sharon fabricates needs for her department.
4.Sharon has no interest in the peasantry of Norfolk and thinks she is getting paid to disenfranchise the weak, thus her stance on double-taxation of the areas small businesses.
If you need any more examples, let me know. I have hundreds of them.
You know, Tanya, you should contact the Doug Knack campaign and give them this information. You can reach the campaign through the website http://knackfornorfolk.com/ I’m sure they would love to know more about it.
Once again, a blogger is having a bit of trouble due to defamatory posts by a person posting under a fake name.
I give no credibility to those who post under contrived names. They are cowards and their smears, regardless of the intended target, should be discounted, especially considering the source.
While I have fought (both figuratively and literally) to preserve our freedom of speech, I believe that any citizen who speaks in the public square should identify themselves and stand by what they say or write.
If we have become so fearful of reprisal by a despotic government, that our citizens feel compelled to hide behind pseudonyms, then we have already lost the Republic.
Stand tall, speak the truth, and stand by what you say; that is the American way.
Kind of like when you go to a protest, and you have to show a state-issued identification card in order to hold a sign.
Actually, that might be China that I’m thinking of.
Obviously you haven’t been to a presidential rally in a while.
(Comrades, please take note.)
~
Tyler, I’m with you in terms of initial assignment of credibility. But there are lots of legit reasons to stay anon (none of which have ever been genuinely claimed on this site, unfortunate). So I’m not willing to denigrate and write it off.
If the person is anonymous, how can YOU judge whether the claim is genuine?
“Tanya” sounds like a disgruntled employee. I have friends who work for Sharon McDonald, and I asked them about Tanya’s comments. In a word, they said it was BS. Morale is very high in that office. And I went to a Civic League and saw Doug Knack speak. Nice guy, but completely unqualified for that office. I mean, I felt bad for the guy, he was so clueless.
Can we expect a second letter from the Norfolk City Attorney’s office demanding that this comment be moved to the front page of Vivian’s blog? No?
There are 2 significant issues at play here. The first one is with Norfolk’s Commissioner of the Revenue who bullys businesses with her misinterpretation of the tax code and the second,with a City Attorney who threatens a citizen with lawsuits on behalf of the Commissioner of the Revenue. These actions points out incompetency of both. I can’t do anything about a misguided City Attorney. However, I can do something about the Commissioner of the Revenue. I can choose “clueless Doug Knack” (who is definitely NOT clueless) over an incompetent and mean-sprrited Commissioner of the Revenue. Thank goodness for the secret ballot!!!
If Knack is not clueless, he certainly hides it well! All he talks about is the one issue that he misstates. If that is all he has to offer, then Sharon McDonald is the person for the job. She will win overwhelmingly and rightfully so.
On the other hand, it is too bad we can’t vote the City attorney out of office. I seriously doubt he acted at the request of the McDonald Campaign. He’s proven himself a maverick on several past occasions and as a result has cost us money when he was overruled.
Actually, Archie, the City Attorney’s office acted at the request of the Commissioner’s office, not at the request of her campaign.
Knack is misnamed; he has no knack for public office. His only platform item seems to be his dispute with Sharon McDonald. Granted, the City Attorney Letter was out of line, but the City Attorney has made more than one error in recent history, several of them embarrassing the city and costing tax payer money.
Sharon McDonald has proven herself an adept Commissioner of the Revenue; she definitely has the knack for the job and will get my vote.
There are many issues with Commissioner of the Revenue Sharon McDonald but the most glaring of them is JUDGEMENT. Her judgement in assessing a segment of similar businesses inconsistently. Had she assessed these businesses all the same,there would be no issue. The businesses may not have liked her assessment, but at least her assessments would have been consistent. But she wasn’t and the State TAX Department ruled against her.
Then there was her judgement in thinking she could put a tax on the gasoline excise tax with “her interpretation” of the tax code. The General Assembly quickly said NO to that interpretation. Poor judgement on her part. Should have checked first with the General Assembly folks.
Her judgement in thinking her job is “to aggressively generate tax revenues” for the City. It appears she hasn’t read her job description in a while,( assess and uniformly apply tax codes)because she is out of step with the surounding cities’ commissioners of revenue who do assess their businesses and taxpayers uniformily and consistently, which makes their cities more appealing for new folks and businesses to locate.
And finally, and most offensive of all, her judgement in thinking she can threaten a citizen who host a political blog because she didn’t like a blogger’s the criticism of her office practices. Now the “blogger” was definitely wrong in naming the unhappy employee in the blog. But instead of talking directly to host about the removing the employee’s name, Ms. McDonald,through Norfolk’s City Attorney Office, threatened: remove the comment and the employee’s name AND turn over the bloggger’s contact information or there will be “damages”. Now the Commissioner wants to send a detective to “talk” to the blogger. (Um… Sounds alot like Watergate)
Right now the City of Norfolk needs all the good people it can get with sound and reasonable judgement. Many citizens think Doug Knack is that voice of reason and sound judgement for the Commissioner of Revenue job. So do I. Remember that on Nov.3rd.
Let me clarify: there is only one “blogger” here and that’s me. Everyone else is a commenter. And it’s not me that the Commissioner wants to send a detective to talk to – it’s the commenter further up the thread. And it is that commenter’s information that the CofR is seeking.
Just wanted to make sure folks reading this knew what was going on here.
Thanks for clarifying the terminlogy for me and others that might need it. Your are the blogger. We are the commentators. Got it!
So,the C of R, an elected constitutional official, just wants to “have a detective(NPD?) talk with that person ( the commentator )to figure out how that person ( the commentator) obtained that information”. Hmm. Could there be a problem here?
oops…. I mean commenter, not commentator. Sorry!