Institute for Justice · January 15, 2021

Charlottesville, Va.—Today, Judge Claude Worrell of the 16th Judicial Circuit of Virginia declared Charlottesville’s business license tax, as selectively applied to freelance authors, unconstitutional. For the past few years, Charlottesville and surrounding Albemarle County assessed freelance authors a business license tax, even if they did not run a business or a storefront of any kind. The city and county business codes cover dozens of occupations but don’t mention writers, who therefore had no notice that they would be taxed. What’s more, other kinds of media like newspapers and magazines are specifically exempted. This selective taxation violates the First and Fourteenth Amendments to the U.S. Constitution. In response, novelists Corban Addison and John Hart partnered with the Institute for Justice (IJ) to challenge Charlottesville and Albemarle County’s respective taxes. Last month, Judge Worrell rejected Addison’s First Amendment claim at a hearing but ruled today on the Fourteenth Amendment claim. 

“Charlottesville’s business-license code allowed tax collectors to target anyone in the name of raising revenue, whether they were actually covered by the tax or not. Today’s decision means that when Charlottesville taxes its residents, it must do so constitutionally,” IJ Attorney Renée Flaherty said.  

Business license taxes are supposed to defray the cost of infrastructure that businesses and their customers use. But while writers like Corban and John put no burden on city or county infrastructure, the city and county saw them as an untapped source of revenue. Charlottesville argued that Addison, even though all he does is sit in a room and write stories, is running a full-fledged business. 

Judge Worrell wrote that “The City has argued that [Mr. Addison] provides a service or business to his publisher. The Court disagrees. The Court finds the argument that [Mr. Addison] provides a service to this publisher to be forced, strained, or contrary to reason.” 

“Today’s decision mandates that Charlottesville’s creative class will no longer be subjected to an arbitrary, unconstitutional tax,” said IJ Attorney Keith Neely. Taxes must be certain and applied evenhandedly.” 

“The court’s ruling today affirms the instinct I had when I first read the City’s business license code: Authors are nowhere to be found in it,” Corban Addison said. “I have always paid my lawful taxes. But to be taxed under an ambiguous catch-all provision in the City Code at the sole behest of the Commissioner of the Revenue is manifestly unfair. I am gratified that the court agrees. 

While Corban’s lawsuit against Charlottesville’s levying of business license taxes against freelance authors is over, John’s case against the county is still active. However, with today’s decision, it is only a matter of time before the county’s tax is declared unconstitutional as well.