How to Start an S Corp in Virginia: SCC Fees, Form 2553 and Virginia Tax
Virginia does not have an S corporation entity. You form a limited liability company (LLC) or a stock corporation with the State Corporation Commission (SCC), then ask the IRS to tax that business as an S corporation by filing Form 2553. Virginia follows the federal election, and an S corporation files Virginia Form 502 each year. Confirm with Virginia Tax that no separate state election form is needed.
Step 1: Form the entity with the SCC
Option A: LLC
File Articles of Organization (Form LLC1011) for $100. Online filing through the SCC Clerk's Information System (CIS) at cis.scc.virginia.gov is the usual route. An LLC pays a $50 annual registration fee to the SCC and files no annual report.
Option B: Stock corporation
File Articles of Incorporation (Form SCC619). The charter fee is $50 for each 25,000 authorized shares or fraction of that amount, plus a $25 filing fee. That totals $75 for up to 25,000 shares, and $125 for 25,001 to 50,000 shares.
A stock corporation pays an annual registration fee based on authorized shares, not a flat $50. The SCC fee schedule dated 02/26 starts at $100 for up to 5,000 shares and adds $30 for each additional 5,000 shares. Confirm the current figure on the SCC annual fee schedule before you choose a share count. The annual report itself carries no separate fee.
You do not have to form as a C corporation first. The S election can apply from the corporation's first tax year, as long as Form 2553 is filed on time and the corporation qualifies. For the choice between staying a plain LLC and electing S treatment, see our LLC versus S corp comparison.
Online filings can be expedited: next day for $50 or $100 (submitted by 2:00 PM Eastern, response by 4:00 PM the next business day), or same day for $200 (submitted by 10:00 AM Eastern, response by 4:00 PM). Expedited service is online only and nonrefundable.
Step 2: Choose your name, registered agent and office
An LLC name must contain "limited company," "limited liability company," "LC," "L.C.," "LLC" or "L.L.C." and must be distinguishable from names already on file. Search the SCC database before you file. You can reserve a name for $10 for 120 days. If you will trade under a different name, file an Assumed Name Certificate with the SCC for $10. It is filed with the SCC, not the circuit court.
Virginia requires a registered agent with a Virginia street address for the registered office. The agent must be a Virginia resident, available during business hours, and either a Virginia State Bar member or a member, manager, officer, trustee or general partner of the entity. The entity cannot be its own agent. A commercial agent service is a private fee, not a state fee, so verify the price on the vendor's site.
Step 3: Get your EIN from the IRS
Apply for your Employer Identification Number directly at irs.gov. The EIN is free. Many websites charge for this service, so check who you are paying before you enter any information.
Step 4: File Form 2553 with the IRS
Form 2553 is the federal S corporation election. The IRS receives it, not the SCC. Key rules:
- Signatures: every shareholder must sign.
- Deadline: the election is due within 2 months and 15 days (75 days) after the start of the tax year it should take effect.
- Late elections: relief may be available for a late election. Verify the deadline and relief rules in the IRS Form 2553 instructions.
- Eligibility: the business must be a domestic corporation or an eligible LLC, have no more than 100 shareholders, have one class of stock, and have only eligible shareholders.
Step 5: Register with Virginia Tax and the VEC
- Withholding: if you pay wages, register with Virginia Tax at tax.virginia.gov for withholding.
- Sales tax: if you sell taxable goods, get a sales tax permit through the Virginia Tax sales and use tax page. The base rate is 5.3% (state plus local). It is 6% in the regional-tax localities, 6.3% in eight localities and 7% in the Historic Triangle (James City County, Williamsburg and York County). The grocery rate is 1%.
- Unemployment insurance: if you have employees, register as an employer with the Virginia Employment Commission (VEC).
Step 6: Run payroll for owner-employees
A shareholder who works in the business must be paid a reasonable salary through payroll. Distributions alone do not count as pay for services. Payroll taxes apply to those wages: Social Security is 12.4% in total on wages up to $184,500 for 2026, and Medicare is 2.9% in total with no wage cap. Setting a reasonable salary is a judgment call, so ask a CPA to help you document it.
Virginia tax rules for S corporations
Form 502 annual return
S corporations and other pass-through entities file Form 502. It is due the 15th day of the 4th month after the year ends, which is April 15 for a calendar-year business. An automatic 6-month filing extension is available, but it does not extend the time to pay withholding tax.
Elective pass-through entity tax
The elective pass-through entity tax is filed on Form 502PTET at 5.75%. Confirm eligibility and timing with Virginia Tax before you plan around it.
C corporations, for comparison
A C corporation pays 6% corporate income tax on Form 500. That is a different return from the S corporation's Form 502.
Owner income tax and estimated payments
Owners' individual rates are 2% on income up to $3,000, 3% up to $5,000, 5% up to $17,000 and 5.75% above that. Individual estimated payments are due May 1, June 15, September 15 and January 15, not April 15.
Local BPOL license
Virginia has no general statewide business license, and the SCC issues none. The local license is the Business, Professional and Occupational License (BPOL) tax under Va. Code 58.1-3700 et seq., set and administered by each city, county or town, usually through the Commissioner of the Revenue. Not every locality levies a general license. Va. Code 58.1-3704 allows a locality to levy none, and several counties, including Stafford, Rockingham, Bedford County, Washington County, Montgomery County, Louisa and Fluvanna, have no general county license. Towns can displace the county tax.
State law also sets population-based floors. A locality over 50,000 people cannot require a license for businesses with gross receipts under $100,000. A locality with 25,000 to 50,000 people cannot require one for gross receipts under $50,000. No floor applies under 25,000 people. Localities over 50,000 may waive the license up to $200,000, but verify that waiver ceiling locally. Localities set their own rates and deadlines, so confirm with your Commissioner of the Revenue. Regulated trades also need licenses from state boards such as DPOR, the Department of Health Professions, VDACS or ABC.
Common mistakes to avoid
- Sending Form 2553 to the SCC. The IRS receives the election.
- Paying no salary to an owner who works in the business.
- Filing Form 500 as an S corporation. S corporations file Form 502.
- Missing the annual registration fee. An LLC's fee is due the last day of the 12th month after organization. The SCC assesses it about two months ahead, and a late payment adds a $25 penalty.
Costs at a glance
| Item | Amount | Notes |
|---|---|---|
| LLC Articles of Organization (LLC1011) | $100 | Filed through CIS |
| Stock corporation Articles of Incorporation (SCC619) | $75 up to 25,000 shares; $125 for 25,001 to 50,000 | $50 charter fee plus $25 filing fee |
| LLC annual registration fee | $50 | No annual report |
| Stock corporation annual registration fee | $100 up to 5,000 authorized shares, plus $30 per additional 5,000 | Confirm on the SCC annual fee schedule |
| Name reservation | $10 | Holds the name for 120 days, renewable in the 45 days before it expires |
| Assumed name (DBA) | $10 | Filed with the SCC |
| Expedited filing (online only) | $50 or $100 next day; $200 same day | Nonrefundable |
| Registered agent service | Varies | Vendor fee; verify on the vendor's site |
| Accountant | Varies | Verify with your CPA |
| EIN | Free | From the IRS |
| Form 2553 | See IRS instructions | Confirm on IRS instructions |
Watch for imitation mail. Private companies sometimes send letters that look like official SCC notices and ask for payment. File through CIS, or mail paper filings to the State Corporation Commission, Clerk's Office, P.O. Box 1197, Richmond, VA 23218-1197. Check any notice against the SCC website before you pay.
Next steps
Work through the steps in order: form the entity, get your EIN, file Form 2553 on time, then register with Virginia Tax and the VEC if you have employees. Put the SCC annual registration fee on your calendar as well.
This guide is informational content, not legal or tax advice. S corporation eligibility, reasonable salary and the choice of entity depend on your facts. Consult a Virginia-licensed attorney and a qualified CPA before you file. Confirm fees and deadlines on the SCC, Virginia Tax and IRS sites, because rates and rules change.