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The idea of eliminating or changing a common local business tax in Virginia has been gaining traction in Richmond in recent years.

However, a group of recent studies on the issue shows that the change would have significant impacts on the budgets of local governments who rely on the tax.

Some state legislators, as well as attorney general and gubernatorial candidate Ken Cuccinelli, have proposed eliminating the “business professional occupation license” (BPOL) tax or changing the way it is collected because they believe it harms small businesses. The tax is calculated based on gross revenues, and not profits.

BPOL is a local tax, collected by counties, cities and towns in Virginia. The General Assembly has set a cap on the tax rates, but local governments have the authority to charge the amount that they want within that cap.

A review of how the tax is implemented in Fairfax County found that it is large companies with millions in revenue that are most affected by the tax, according to Kevin Greenlief, director of the county’s Department of Tax Administration.

“The top 1 percent of businesses in Fairfax are paying over 43 percent of BPOL taxes,” he said. That represents businesses with gross receipts in excess of $25 million per year.

About 40 percent of businesses in the county that have to pay the tax pay a flat tax, averaging $38 per year, Greenlief said. Businesses with gross receipts under $10,000 per year do not have to pay anything.

In addition, the loss of the BPOL revenue would have a significant impact on the county’s budget. BPOL taxes account for about 4.5 percent of the county’s general fund revenue, equivalent to about $150 million or 8 cents on the real estate tax rate.

It is also a less volatile tax than the real estate tax, Greenlief said.

“It gives you a little bit of cushion if you have that stability,” he said.

Two independent state reviews had similar findings on the statewide level.

The Joint Legislative Audit and Review Commission was tasked with analyzing a change in the BPOL tax to base it on net income, rather than gross receipts. That change would eliminate about 95 percent of BPOL revenues and require a large hike in BPOL rates if the General Assembly wanted to make the change revenue neutral for localities, according to the JLARC report.

For example, Greenlief said, Fairfax County would have to change its tax rate from an average rate of 0.2 percent to an average of 4.5 percent. Businesses with more than $100,000 in gross receipts pay a different tax rate based on the type of business.

A survey by the Virginia Municipal League and Virginia Association of Counties, like the JLARC study, found that 60 percent of businesses in the state pay a fee of less than $100 or pay no tax at all.

The proposal is expected to come up in the 2014 General Assembly session.