Virginia Sole Proprietorship: $10 SCC Assumed Name, Self-Employment Tax and Local License
Virginia Sole Proprietorship: $10 SCC Assumed Name, Self-Employment Tax and Local License
In Virginia you can operate as a sole proprietor with no state registration. The State Corporation Commission (SCC) does not form sole proprietorships and issues no business license. You file an assumed name certificate with the SCC only if you trade under a name other than your own legal name, and that filing costs $10. Depending on where you operate, you may also need a local business license under the Business, Professional and Occupational License (BPOL) tax, which not every locality levies.
This guide is informational content, not legal or tax advice. Talk with a qualified attorney or CPA before you make decisions about structure, liability or taxes, especially if you plan to hire employees, have a partner, or take on significant business risk.
What a Sole Proprietorship Is
A sole proprietorship is an unincorporated business owned and run by one person. There is no separate legal entity between you and the business. Business income and losses flow onto your personal tax return, and you are personally responsible for the business's debts, contracts and lawsuits. If you are the only owner and have not formed an LLC or corporation, you are a sole proprietor by default.
That default is why many people searching for a sole proprietorship in Virginia are really asking which filings are required. For most one-owner businesses, the answer is few or none at the state level, with the local license and any assumed name filing as the exceptions.
How to Start a Sole Proprietorship in Virginia
- Choose your business name. If you operate under your full legal name, such as Jane Smith, you need no state filing for the name. If you use anything else, such as Smith Landscaping, you have a trade name and need an assumed name certificate.
- File the assumed name certificate if you need one. File it with the SCC Clerk through the SCC Clerk's Information System at https://cis.scc.virginia.gov/. The details are in the next section.
- Check for a local business license. Ask the commissioner of the revenue in the city or county where you operate whether a BPOL license applies to your business.
- Register with Virginia Tax if you sell taxable goods or services. Sales tax registration is separate from any local license.
- Get an EIN if you want one. A sole proprietor with no employees can use a Social Security number, but an EIN keeps your SSN off client forms.
- Open a separate bank account and keep records. A separate account makes it easier to track income, expenses and quarterly tax payments.
The Assumed Name (DBA) Certificate
Virginia calls a DBA an assumed name. It is filed with the SCC Clerk, not the circuit court. The circuit court option ended before January 1, 2020, so any guide that still sends you to the courthouse is out of date. The filing costs $10. Releasing an assumed name costs $10, and a certified copy (Certificate of Fact) costs $6.
The Virginia assumed name process is simpler than many people expect:
- There is no uniqueness test, so the SCC does not check whether another business uses the name.
- No designator such as LLC is required.
- There is no renewal and no five-year term.
- No newspaper publication is required.
- No notarization is required.
Sole proprietors, general partnerships, trusts and entities all file the same certificate. Filing does not give you a trademark or any name protection, so a filed assumed name does not stop someone else from using a similar name. For a step-by-step walk-through of the form, see our companion guide on the Virginia DBA trade name filing process.
Skipping the filing has real consequences. Using an unfiled assumed name is a misdemeanor with a fine of up to $2,500, up to one year in jail, or both (Va. Code 59.1-69, 59.1-70, 59.1-74 and 59.1-75). A business that has not filed cannot maintain a lawsuit in Virginia courts. A commissioner of the revenue also may not issue a local license until the certificate is filed. Treat the $10 filing as required whenever you use a trade name.
Local Business License (BPOL)
Virginia has no general state business license, and the SCC issues none. The business license is a local tax called the Business, Professional and Occupational License (BPOL) tax, found in Va. Code 58.1-3700 and following. Each city or county administers it, usually through the commissioner of the revenue.
Not every locality levies a general BPOL. Va. Code 58.1-3704 lets a locality levy none, and some counties, including Stafford, Rockingham, Bedford County, Washington County, Montgomery County, Louisa and Fluvanna, have no general county license. A town may levy its own license tax in place of the county tax, so check both the town and the county where you operate. Do not assume your neighbor's locality works the same way as yours.
When a locality does levy BPOL, the statute sets a population-based floor on gross receipts:
- In a locality over 50,000 people, the license cannot be required for gross receipts under $100,000.
- In a locality of 25,000 to 50,000 people, the floor is gross receipts under $50,000.
- In a locality under 25,000 people, no statutory floor applies.
- Localities over 50,000 people may waive the license for smaller businesses up to a $200,000 ceiling. Verify this ceiling with your locality.
Localities set their own rates, filing deadlines and classifications. Do not rely on any single rate you see online, because it may belong to one locality only. Ask your commissioner of the revenue for your rate, deadline and gross-receipts threshold. In BPOL law, the term short-term rental refers to equipment rental, not Airbnb-style lodging.
Occupational Licenses Are Separate
A local BPOL license does not cover regulated trades and professions. Those are licensed by state boards and agencies, including the Department of Professional and Occupational Regulation (DPOR), the Department of Health Professions, the Virginia Department of Agriculture and Consumer Services (VDACS) and the Virginia Alcoholic Beverage Control Authority (ABC). Contractor license classes since July 1, 2025 are Class C for contracts over $1,000 to under $30,000, Class B for $30,000 to under $150,000, and Class A for $150,000 or more. Confirm the current requirements with DPOR before you bid work.
Some other rules to confirm with the right agency:
- Child day centers and family day homes are licensed by the Department of Education.
- Assisted living and adult day care are licensed by the Department of Social Services.
- Virginia has no statewide food-handler card, but food establishments must have a Certified Food Protection Manager.
- Virginia has no state towing board.
- Cannabis retail sales are authorized from July 1, 2027 under budget language, but the regulations are not final. Verify the current timeline with the responsible agency before you plan a cannabis business.
Sales Tax Registration
If you sell taxable goods or services, register with Virginia Tax at https://www.tax.virginia.gov/sales-and-use-tax. The state sales tax base is 5.3 percent, which combines state and local tax. The rate is 6 percent in the regional-tax localities, 6.3 percent in eight localities, and 7 percent in the Historic Triangle (James City County, Williamsburg and York County). The grocery rate is 1 percent. Confirm the rate for your exact address with Virginia Tax.
Hiring Employees
A sole proprietor with no employees does not need to register with the Virginia Employment Commission (VEC) or set up withholding. Once you hire, you must register as an employer. Virginia's minimum wage is $12.77 in 2026, $13.75 in 2027 and $15.00 in 2028.
Workers' compensation coverage is required once an employer regularly has three or more employees in service (Va. Code 65.2-101). A sole proprietor with no employees, or fewer than three, is outside that requirement, but confirm your obligations with your insurer or a qualified advisor as your business grows.
Taxes for a Virginia Sole Proprietor
Federal Schedule C and Self-Employment Tax
Your business income and expenses go on Schedule C of your personal federal return. Net earnings from self-employment are subject to a 15.3 percent self-employment tax. That is 12.4 percent for Social Security, applied up to the 2026 wage base of $184,500, plus 2.9 percent for Medicare.
Virginia Individual Income Tax
Virginia taxes your business profit as part of your individual income. The rates are 2 percent on the first $3,000, 3 percent to $5,000, 5 percent to $17,000, and 5.75 percent above $17,000.
Estimated Payments
Virginia estimated payments are due May 1, June 15, September 15 and January 15 of the following year. The deadlines are not April 15. Filing and paying your full return by March 1 excuses the January payment. Virginia expects at least 90 percent of the current year's tax to be paid through the year. Virginia Tax lists other exceptions, so see Virginia Tax for the details before you rely on any safe harbor.
EIN
An EIN is optional for a sole proprietor with no employees. The IRS issues it free of charge. Using an EIN instead of your SSN on client forms, vendor applications and bank documents is a common reason to get one.
Costs at a Glance
| Item | Cost | Notes |
|---|---|---|
| State formation | $0 | No state formation document for a sole proprietorship |
| Assumed name certificate | $10 | Only if you use a name other than your legal name. Filed with the SCC. |
| EIN | $0 | Optional for a sole proprietor with no employees. Free from the IRS. |
| Local business license | Varies by locality | Check with your locality and the commissioner of the revenue. |
When to Form an LLC Instead
The main reason to form an LLC is liability. A sole proprietorship has no liability shield. Your personal assets, including savings, home equity and vehicles, can be reached by business creditors and lawsuits. A sole proprietorship also has no registered agent requirement, because there is no entity to register.
A Virginia LLC is formed by filing Articles of Organization (Form LLC1011) with the SCC for $100. Virginia LLCs file no annual report. They pay a $50 annual registration fee to the SCC, due the last day of the 12th month after the month the LLC was organized, then every year. Expedited online filing is available for an added cost of $50 or $100 for next-day service, or $200 for same-day service. Expedited service is nonrefundable. For the full process, see our guide to starting an LLC in Virginia.
Sources and Next Steps
Confirm current figures with the official sources before you file:
- State Corporation Commission, Clerk's Office: https://www.scc.virginia.gov/businesses/
- SCC Clerk's Information System: https://cis.scc.virginia.gov/
- Virginia Tax: https://www.tax.virginia.gov/
- Virginia Small Business Development Center network: https://www.virginiasbdc.org/
This guide is informational content, not legal or tax advice. For a business with employees, a partner, significant assets or significant liability risk, consult a qualified Virginia attorney and a CPA before you choose a structure.