Henrico eases business license taxes, broadens tax exemptions for certain homeowners

At its May 28 meeting, the Henrico Board of Supervisors approved an ordinance doubling the threshold for business license taxes to $1 million, meaning that businesses with annual earnings of less than that amount won’t pay any license taxes and those that earn more can deduct $1 million from their taxable earnings.

The change, according to county officials, will exempt about 1,300 businesses from the tax and reduce taxes for about about 14,700 others when it takes effect July 1. Henrico counts about 25,000 businesses within its borders in total.

"Raising the BPOL tax threshold is a strategic step to support our local businesses, especially the small businesses that are the backbone of our economy," Henrico County Manager John Vithoulkas said in a statement. "By doubling the threshold, we're ensuring that more businesses can thrive without the additional tax burden, which is particularly crucial as companies worldwide reassess their office space needs postpandemic."

The board also passed an ordinance expanding the Real Estate Cap (RECAP) program, which freezes real estate taxes for homeowners who either are 65 or older or who are permanently disabled. Homeowners in either category now may qualify with as much as $125,000 of household income as well as a combined net worth of $750,000. The new thresholds are increases from the previous ceilings of $105,000 of household income and $700,000 in net worth. The changes will take effect Jan. 1.

On the spending front, the board awarded $780,272 to WACO Inc to replace 16 failing pumps at the Water Reclamation Facility and $381,000 to Virtextco, on top of its existing $1.4 million contract, to renovate the kitchen at Regional Jail West. The board also purchased a property at 3001 Peyton Street in the Fairfield District for $800,000 to use in a future transportation project.

During public comments, a student from J.R. Tucker High School brought the board her concerns about student safety, noting the lack of crosswalks and traffic signals for students walking to school. She acknowledged that public works projects were planned to address the issue but said that the changes, not expected to be completed until 2027 or 2028, would not reduce the risk for current students.