Salem VA Business License: $50 Flat Per Classification Under $50,000 and the Online Portal
Salem VA Business License: $50 Flat Per Classification Under $50,000 and the Online Portal
If you are opening a business in Salem VA, the license you need comes from the City, not the state. Virginia has no general statewide business license. The State Corporation Commission (SCC) forms your entity and issues no business license. The City's business license is the Business, Professional and Occupational License (BPOL), a local license tax under Va. Code 58.1-3700 et seq. Salem sets its own rates and deadlines under that framework.
Salem VA is an independent city, separate from Roanoke County and the City of Roanoke. A license from either one does not cover work you perform inside Salem.
This guide covers what the Salem VA business license costs, who must apply, how to file through the online portal, the renewal and new-business deadlines, and the business tangible property return, which runs on its own February schedule.
What a Salem VA Business License Costs
Salem has about 25,800 residents. Under state law, a locality of that size cannot require a license tax on businesses with gross receipts under $50,000. Salem's fee structure works in two tiers:
- Under $50,000 in gross receipts: a flat $50 per classification.
- $50,000 or more in gross receipts: a rate per $100 of gross receipts, set by classification.
At $50,000 or more, the rates are:
| Classification | Rate |
|---|---|
| Contractors | $0.16 per $100 of gross receipts |
| Retail and short-term rental | $0.20 per $100 of gross receipts |
| Repair, personal, amusement and business services | $0.36 per $100 of gross receipts |
| Real estate, financial and professional services | $0.58 per $100 of gross receipts |
| Wholesale | $0.13 per $100 of gross receipts or purchases |
Two notes on the table. First, Salem lists short-term rental in its retail class. That placement is the city's own classification, and no state statute is cited for it. In BPOL law, "short-term rental" means equipment rental, not a vacation rental, so ask the Commissioner how your activity is classified. Second, the wholesale rate of $0.13 is well above the usual 0.05, so wholesalers should budget for it before comparing Salem with other localities.
A business can fall into more than one classification and is rated under each one that applies. Confirm with the Commissioner how to split your receipts across classifications.
Worked examples
- A professional services firm with $120,000 in receipts: $120,000 divided by 100, times $0.58, equals $696.
- A wholesaler with $1,000,000 in purchases: $1,000,000 divided by 100, times $0.13, equals $1,300.
Your first-year license is based on an estimate of gross receipts from your opening date to year end. Later years use prior-year receipts. The first two years are subject to supplemental billing, so plan for a possible additional bill once actual receipts are known.
Who Needs a Salem VA Business License
- Every business must be licensed, including home businesses, special events, and people paid on a 1099.
- Contractors based outside Salem who work in Salem must also obtain a Salem license. Ask the Commissioner how the state's $25,000 out-of-area contractor threshold applies to your situation.
- Delinquent taxes must be paid before a license is issued.
Home occupations
A home-based business needs a home occupation permit from Zoning, handled through Community Development, in addition to the business license. Under the city's 2022 application, the permit carries a one-time $25 review fee and takes a minimum of 14 days to approve. Confirm current requirements with Community Development at 21 S Bruffey St, 540-375-3032, because the form and fee may have changed since 2022.
Contractors and state licensing
Contractors also need state licensing through the Department of Professional and Occupational Regulation (DPOR). Since July 1, 2025, contractor license classes are Class C for over $1,000 to under $30,000, Class B for $30,000 to under $150,000, and Class A for $150,000 or more. The DPOR license is separate from the Salem license and does not replace it.
Steps and the Online Portal
- Estimate your gross receipts and identify each classification that applies to your business.
- Check for delinquent taxes. Unpaid City taxes block issuance of a license.
- Gather your account number and the last four digits of your FEIN or SSN. The portal uses both to identify your account.
- File and pay online through the Online Registration and Filing Portal. Online payment is by card only.
The portal handles the business license, business tangible property returns, fiduciary taxes, and out-of-area contractor licenses. If you do not have an account number yet, or need help, contact the Commissioner of the Revenue:
Commissioner of the Revenue
City Hall, 114 N Broad St (PO Box 869)
Salem VA 24153
Phone: 540-375-3019 ext. 3
Email: [email protected]
Deadlines
- Annual renewal: the license renews by March 1 each year.
- New business: Salem's deadline to obtain the license is within 30 days of opening. Because every business must be licensed before it starts, do not wait for that deadline. Apply before you open.
- Late penalty: state law caps the late penalty at 10 percent. If your filing and payment are both late, only the filing penalty applies.
Salem VA Business Tangible Property Tax
The business tangible property return is a separate filing from the business license, and it runs on its own schedule.
- Due date: February 15 each year. No extensions.
- Filing options: online starting January 1, by mail, or in the office.
- Business tangible property rate: $3.40 per $100 of assessed value.
- Machinery and tools rate: $3.20 per $100 of assessed value.
Machinery and tools covers only manufacturing, mining, processing, broadcasting, dairy and laundry classes. If your business is not in one of those classes, the machinery and tools rate does not apply to you.
Assessed value is a percentage of original cost, and the percentage depends on the year you bought the property:
| Year of purchase | Assessment percentage of original cost |
|---|---|
| 2025 | 70 percent |
| 2024 | 60 percent |
| 2023 | 50 percent |
| 2022 | 40 percent |
| 2021 | 30 percent |
| 2020 and earlier | 25 percent |
Example: a $10,000 piece of equipment bought in 2025 is assessed at 70 percent, or $7,000. At $3.40 per $100, the tax is $238. The same equipment bought in 2020 is assessed at 25 percent, or $2,500, for a tax of $85. Confirm your figures with the Commissioner before filing.
Meals and lodging taxes
Meals tax and lodging tax returns are filed online through the Commissioner's office. The rates are 6 percent for meals and 8 percent for lodging. These are 2024 figures, so confirm the current rates with the Commissioner's office before you file.
How Salem VA Compares to Roanoke County and Roanoke City
Salem VA, Roanoke County and the City of Roanoke set their own fees, and the structures differ:
- Roanoke County: $50 flat for businesses under $150,000 in gross receipts.
- City of Roanoke: $50 flat at $100,000 or less in gross receipts.
- Salem VA: $50 flat per classification under $50,000, with per-$100 rates above that.
A business with $75,000 in professional receipts pays $50 in Roanoke County and $50 in the City of Roanoke. In Salem VA, the same business pays $435 ($75,000 divided by 100, times $0.58). Compare the actual figures for your classification and receipts before you choose a location.
Official Resources
Your business entity is filed with the SCC, not the City. An LLC's Articles of Organization (Form LLC1011) cost $100, and an LLC pays a $50 annual registration fee to the SCC. Virginia LLCs file no annual report. An assumed name (DBA) is filed with the SCC for $10.
- Commissioner of the Revenue, City of Salem: 114 N Broad St (PO Box 869), Salem VA 24153, 540-375-3019 ext. 3, [email protected]
- Community Development (home occupation permits): 21 S Bruffey St, 540-375-3032
- State Corporation Commission, Clerk's Office: https://www.scc.virginia.gov/businesses/
- Virginia Department of Taxation (Virginia Tax): https://www.tax.virginia.gov/
Important Note
This guide is informational content, not legal or tax advice. Rates, deadlines and forms can change, and the City sets them. Confirm every figure with the Commissioner of the Revenue before you file or pay. For complex situations, such as multiple locations, mixed classifications, out-of-state contractor work, or back taxes, talk with a qualified attorney or certified public accountant (CPA).