Va. counties compete for software companies

On Nov. 24, the Fairfax County, Va., Board of Supervisors will hold a public hearing to discuss what, if anything, to do about the county's Business, Professional, Occupational License (BPOL) tax on companies that develop software. The hearing is partially in response to neighboring Loudoun County's (Va.) exemption for software companies from the BPOL tax. That exemption took effect in January. The Virginia State Legislature voted in October 1996 to give county and city governments the authority to exempt software development companies from the BPOL tax.

"Companies make comparisons between Fairfax and Loudoun counties," said Kevin Greenlief, director of the county's Department of Tax Administration. "I don't think this is because we've lost software companies. This is to position ourselves to remain competitive in the future."

Fairfax County is home to some 1,200 firms that develop software. The board will consider exempting software receipts or creating a separate category for them and taxing that category below the current rate of $.19 per $100.

Vince Press, marketing manager for Loudoun Counties Economic Development Department, said that the county doesn't have a large number of software firms, and took the move as a benefit to companies who locate in the future. But it has already snagged huge Internet player America Online (AOL) from Fairfax, a move many attribute to Loudoun County's lifting of the BPOL tax.

Counties in the Washington, D.C. metropolitan area are competing for software companies and other high-tech businesses with a variety of incentives. The Economic Development Authority of Calvert County, Md., is offering free land in its industrial park to high-tech companies who locate within the next two years, agree to maintain ownership for 10 years, invest at least $500,000 in the facility and employ a certain number of people.

"This incentive has generated a lot of interest in the park," said Linda Vassallo, marketing and communications specialist with the Calvert County Development Authority. "This has helped put us on the map."

Calvert County has 17 companies in its 220-acre industrial park, which is about 20 years old. The county commissioned a study last year to develop a target market for the park. The study identified computer programming, software development, administrative service centers, professional services and defense services.

One of the reasons officials are interested in software development companies is Calvert County's highly educated, highly paid workforce, 60 percent of which commute to high-tech jobs outside the county, according to Jeff Stone, director of economic development.

"We're trying to attract companies into our area that will offer highly paid jobs and continue to offer them for years," Stone said. "Obviously, that's not the steel industry. Software companies are a growing segment of the economy in our region. There is a shortage of people in our region with the skills needed in this field. Our county has a labor force with these skills. We need those types of jobs and we think the companies need locations like ours."