Today, the Virginia Supreme Court upheld a lower court’s decision that said the city of Charlottesville can’t apply its business license tax to freelance writers. As a result of today’s decision, freelance writer Corban Addison – represented by the Institute for Justice (IJ) – will receive a $2,461.23 refund in taxes he did not need to pay, and will no longer be subjected to Charlottesville’s business license tax.
“Today’s decision affirms that municipalities don’t have an unlimited power to tax. If a city wants to tax its citizens, the law must be clear,” said IJ Attorney Renée Flaherty. “Writers aren’t running businesses, and Charlottesville can’t tax them like they are.”
Since 2018, Charlottesville had been assessing business license taxes to freelance authors like Corban, even though the city’s business code does not list authors among the list of taxable occupations. Thus, Corban and other authors throughout Charlottesville and surrounding Albemarle County had no way to know if they were subjected to such a tax.
“If a municipality wants to tax its citizens, it must be clear about who it is taxing. A government cannot simply pass vague tax policies and then treat citizens like living, breathing ATMs,” said IJ Attorney Keith Neely.
The entire point of a business license tax is to help a city pay for infrastructure and other costs associated with storefront businesses, but this clearly does not apply to Corban or other freelance writers. The city argued that while authors are not specifically listed, the law’s “catchall provision” required Corban to pay the business license tax. Today’s court decision reaffirms that is not the case. The decision also reaffirms that when tax statutes aren’t clear, the tie goes to the taxpayer, not the government.
“Taxing freelance writers under an ambiguous catch-all provision in the city code was unfair,” Corban said. “Today’s decision is an affirmation of what I always believed: Charlottesville is a place that is open and welcoming to creative individuals.”
Corban launched his lawsuit against the city in 2019 after being assessed thousands of dollars in unexpected back taxes. His suit was filed in conjunction with fellow best-selling author John Hart, who is challenging Albemarle County’s similar law. In January 2021, the 16th Judicial Circuit of Virginia held that Charlottesville’s business license tax violated Corban’s 14th Amendment rights.