House joint Resolution 526 (see Appendix A), passed by the 1993 General Assembly, established a joint subcommittee to study the business, professional, and occupational license tax imposed by local jurisdictions and to consider alternative means of taxation.

In its deliberations, the subcommittee considered options for restructuring or replacing some or all of such taxes with alternative revenue neutral business taxes which are fairer, easier to understand and apply, and more efficient to administer.

The BPOL tax has been a controversial tax for many years. Some in the business community do not think the categories of occupations are appropriate. Some think the tax rates are unfair. A majority of those objecting to the tax agree the tax should not be levied on the gross receipts of a business. However, local jurisdictions depend substantially on the BPOL tax revenues and, therefore, will not give them up without some alternative, which will provide a comparable amount of funds in order to provide requires services. An equitable distribution of the financial responsibilities for those local services is of paramount concern to the localities.

The subcommittee considered amending the current BPOL tax statute as well as repealing the statute and replacing it with a different method of taxation. In order to decide, the subcommittee met twice to hear testimony from those representing the business community as well as local jurisdictions. In addition an advisory committee consisting of business people and local jurisdiction officials was appointed by the chairman of the joint subcommittee. The advisory committee, which also met twice, was to develop some viable alternatives for the joint subcommittee to consider. Their focus was on the administration of the BPOL tax because the subcommittee quickly discovered that eliminating the tax was impossible without an alternative revenue producer.

Realizing the enormity of their task and wanting to find the best solution and not just a quick fix, the subcommittee decided to extend the study for an additional year.