Virginia Business Taxes: Income Tax, Sales Tax, Withholding, BPOL and Personal Property
Virginia has no state franchise tax and no state gross receipts tax. A new owner usually deals with state income tax; withholding and unemployment tax if there are employees; sales tax if the business sells taxable items; and two local taxes, the Business, Professional and Occupational License (BPOL) tax and business personal property tax. Federal income tax and self-employment tax sit on top of all of that. An LLC also pays a $50 annual registration fee to the State Corporation Commission (SCC) and files no annual report.
This guide is informational content, not legal or tax advice. Your results depend on your entity type, income, employees and locality. Confirm rates and deadlines with the named agency before you file, and talk to a CPA or attorney about your situation.
Virginia Income Tax for Owners, LLCs and Corporations
Virginia individual income tax applies four rates to Virginia taxable income:
| Taxable income | Rate |
|---|---|
| Up to $3,000 | 2 percent |
| $3,001 to $5,000 | 3 percent |
| $5,001 to $17,000 | 5 percent |
| Over $17,000 | 5.75 percent |
How business income is taxed depends on how the entity is classified for Virginia purposes:
- Single-member LLC: Virginia does not treat it as a pass-through entity. Its income goes on the owner's own Virginia return.
- C corporation: Pays a flat 6 percent corporate income tax on Form 500.
- Multi-member LLC, partnership or S corporation: Files Form 502 by the 15th day of the fourth month after year end, which is April 15 for calendar-year filers. Virginia gives an automatic six-month filing extension, but that extension does not extend payment of withholding tax.
A pass-through entity can also elect to pay the tax at the entity level on Form 502PTET at 5.75 percent. The election is made each year on the timely filed return, the return must be filed electronically, and estimated payments are required from tax year 2023. Eligible owners (individuals, estates and trusts) claim a refundable credit under Va. Code 58.1-390.3. The election is open to S corporations as well as partnerships and multi-member LLCs. For the entity-level details, read Virginia LLC taxes, Form 502 and the pass-through entity tax.
Virginia Estimated Tax Due Dates
You must make estimated payments when your expected Virginia liability after withholding and credits is more than $1,000. Virginia's installment dates are not the federal April 15 date:
| Installment | Due date |
|---|---|
| First | May 1 |
| Second | June 15 |
| Third | September 15 |
| Fourth | January 15 |
- Pay at least 90 percent of the tax due for the year. Virginia's rule is 90 percent, with no 100 or 110 percent rule.
- Filing and paying in full by March 1 excuses the January 15 payment.
- Payments must be made electronically if any installment exceeds $1,500 or total liability exceeds $6,000.
Self-Employment Tax (Federal)
Sole proprietors and LLC members without S corporation treatment owe federal self-employment tax. It is reported on the federal return, not to Virginia. The rate is 15.3 percent on 92.35 percent of net earnings. That 15.3 percent is 12.4 percent Social Security, applied up to the $184,500 wage base for 2026, plus 2.9 percent Medicare with no cap.
Withholding and Unemployment Tax for Employers
If you pay Virginia wages, you must register with Virginia Tax and file withholding returns even in periods when you owe nothing. Register as an employer in Virginia walks through the setup. Your filing schedule depends on how much withholding you owe each month:
| Withholding liability | Filing schedule |
|---|---|
| Under $100 a month | Quarterly on Form VA-5, due April 30, July 31, October 31 and January 31 |
| $100 to under $1,000 a month | Monthly on Form VA-5, due the 25th |
| $1,000 or more | Semi-weekly schedule, using Form VA-15, then Form VA-16 each quarter |
Form VA-6 and every W-2 or 1099 showing Virginia withholding are due January 31 and must be filed electronically.
Unemployment tax is paid to the Virginia Employment Commission (VEC) on the first $8,000 of each employee's wages. Confirm your registration and rate with the VEC.
Sales Tax Registration and Filing
If your business sells taxable goods or services, register online with Virginia Tax before you collect tax. Registered dealers receive certificate ST-4 and must file monthly or quarterly, never annually, by the 20th, even when there were no sales.
Rates vary by locality. See our sales tax registration and rates guide, and confirm current rates on the Virginia Tax sales and use tax page.
For software and digital products, Virginia Tax lists a Digital Media Fee among its other taxes. Check with Virginia Tax before assuming a digital sale is taxable or exempt.
Local Taxes: BPOL, Personal Property and Other Levies
Virginia has no general statewide business license. The SCC forms entities but issues no business license. The main local business license is BPOL, and it is set by each city or county.
BPOL (Business, Professional and Occupational License)
BPOL is a local license tax on gross receipts under Va. Code 58.1-3700 et seq. Each locality sets its own rates and filing deadlines, 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. Stafford, Rockingham, Bedford County, Washington County, Montgomery County, Louisa and Fluvanna are examples of localities without a general county license. Towns may levy their own license tax in place of the county tax.
State law also sets a population-based floor below which a locality cannot require a license for gross receipts:
- Localities over 50,000 people cannot require a license for gross receipts under $100,000.
- Localities with 25,000 to 50,000 people cannot require a license for gross receipts under $50,000.
- No floor applies to localities under 25,000 people.
Localities over 50,000 people may waive the license for gross receipts up to $200,000. Verify that waiver ceiling with your locality. In BPOL law, 'short-term rental' refers to equipment rental, not lodging such as Airbnb.
Rates and filing deadlines are set locally, so check with your city or county. Read our BPOL tax explainer by locality for more.
Business Personal Property and Machinery and Tools
Localities tax business personal property, such as equipment and furnishings, and machinery and tools as separate local taxes. For property you own on January 1, the return is due May 1 unless a local ordinance says otherwise. See our business personal property tax guide.
Meals, Lodging and Admissions
Each locality sets its own meals, lodging and admissions taxes. Check with your locality before you start charging them.
Reciprocity With Neighboring States
Virginia has reciprocity with the District of Columbia, Kentucky, Maryland, Pennsylvania and West Virginia. Reciprocity covers wage and salary income only. For Maryland, Pennsylvania and West Virginia, the wage rule applies only if you are in that state 183 days or less and have no abode there. Reciprocity does not cover self-employment or business income, and DC's unincorporated business franchise tax is outside it. Check your situation with Virginia Tax before relying on reciprocity.
When to Bring In a CPA or Attorney
Bring in a qualified CPA when:
- You are deciding whether to use the Form 502PTET election or whether your entity should be taxed as an S corporation.
- Your expected Virginia liability swings enough that estimated payments are hard to calculate.
- You have employees, or you earn income in DC or in Maryland, Pennsylvania or West Virginia, where reciprocity may not apply.
- You sell software or digital products and are unsure how the Digital Media Fee or sales tax applies.
- You operate in more than one locality, each with its own BPOL and personal property rules.
Questions about entity structure belong with an attorney as well as a CPA.
This guide is informational only and is not legal or tax advice. Virginia rates, dates and thresholds change, so confirm current figures with Virginia Tax, the State Corporation Commission or your locality before you act.