How to Start a Tax Preparation Business in Virginia: No State License, PTIN $18.75 Required on Every Return

October 29, 2026

If you plan to prepare tax returns for other people in Virginia, the first question is usually whether you need a state license. The answer is no. Virginia issues no tax preparer license, no preparer exam and no preparer registration. What the state does require is that every income tax return preparer put a Preparer Tax Identification Number (PTIN) on every Virginia return they prepare or help prepare. The PTIN is issued by the IRS and costs $18.75.

This guide covers the steps in the order that matters most: confirming the state rule, getting and using your PTIN, understanding how Virginia oversees preparers, deciding whether optional federal credentials fit your plans, then forming your business and checking local licensing. It is written for someone starting a storefront, a home office practice or a seasonal side business.

What You Need Before You Start

Gather these items before you file anything. Most of your state cost comes from entity filings, not the PTIN.

• The identification details the IRS asks for on the PTIN application, plus an email address and a payment method for the $18.75 fee.
• A proposed business name, checked against the State Corporation Commission (SCC) business search at cis.scc.virginia.gov.
• A Virginia street address for your office. An entity also needs a registered agent who meets Virginia's rules, covered in Step 5.
• A budget for state filings: $100 for LLC articles, $10 for a name reservation if you want one, $50 for the yearly LLC registration fee, and $10 for an assumed name if you operate under a name other than your own.
• The contact information for your city or county Commissioner of the Revenue, since that office administers the local business license.
• A calendar with the fall PTIN renewal and the SCC due dates.

Step 1: Confirm There Is No Virginia Preparer License

Before you spend money on a license, understand what Virginia does not require. There is no state preparer license, no state exam and no state registration for tax preparers. The SCC forms entities but issues no business license, and Virginia has no general statewide business license.

Your obligations come from three places: the PTIN rule that applies to every return, the entity filings you make if you form an LLC or corporation, and a local Business, Professional and Occupational License (BPOL) that depends on where you work. Steps 2 through 8 cover each one.

Step 2: Get Your PTIN and Put It on Every Virginia Return

Under Va. Code 58.1-348.3 B, an income tax return preparer must put their PTIN on every Virginia return they prepare or help prepare. The requirement applies to taxable years beginning on or after January 1, 2019.

Apply for the PTIN through the IRS. The fee is $18.75 for a new application and for annual renewal. Renewal for the following year opens in the fall, so schedule it now and repeat it every year.

A missing PTIN does not cause a Virginia return to be rejected as improperly filed (Va. Code 58.1-348.3 E). Do not read that as permission to skip it. The requirement still applies, and leaving the PTIN off is a compliance failure even when the return is accepted.

Step 3: Understand How Virginia Oversees Preparers

Virginia oversees preparers through PTIN data and tax records rather than a license board. Under Va. Code 58.1-348.2 and 58.1-348.3 C and D, Virginia Tax may use PTIN data to look for high error rates and suspected fraud. It may share preparer and return information with the IRS and other states' tax agencies for enforcement. It may also seek to enjoin preparers, which means asking a court to stop them from preparing returns.

In practical terms, your filing record is your standing with the state. Preparers whose returns show a pattern of errors or fraud can be barred or disciplined. Build review and quality checks into your intake process from the first client.

Step 4: Decide Whether Federal Credentials Fit Your Plans

Federal credentials are optional for many preparers, but some work requires them. These are federal programs administered by the IRS, not Virginia requirements:

• An Electronic Filing Identification Number (EFIN) if you plan to e-file returns.
• The IRS Annual Filing Season Program, a voluntary credential for preparers who are not CPAs, attorneys or enrolled agents.
• The enrolled agent exam, which leads to federal enrollment and the right to represent taxpayers before the IRS.
• Representation rights before the IRS, which depend on which credential you hold.

Check IRS.gov at irs.gov for current requirements and fees. Federal fees change, so confirm them there.

A CPA license is a separate path. It comes from the Virginia Board of Accountancy, not the IRS. CPAs may perform attest work such as audits and reviews, and that work is reserved to CPAs. If your plans include attest work, evaluate the CPA route with the Board before you commit to a business model.

Step 5: Choose and Form Your Business Entity

Many tax preparers start as sole proprietors. A sole proprietorship has no SCC formation filing. If you operate under a name other than your own, you file an assumed name certificate (see Step 6). An LLC separates your business from your personal affairs but adds setup cost and an ongoing fee. Discuss the choice with an attorney or CPA.

Forming an LLC

1. Reserve your name if needed. A name reservation costs $10 and lasts 120 days. It can be renewed in the 45 days before it expires. The name must contain LLC, L.L.C., LC, L.C., limited company or limited liability company, and it must be distinguishable from names already on file.
2. File Articles of Organization (Form LLC1011). The filing fee is $100. File online through the SCC Clerk's Information System at cis.scc.virginia.gov. Expedited options are available online only and are nonrefundable: 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).
3. Appoint a registered agent. A Virginia entity must keep a registered agent who is a Virginia resident with a Virginia street registered office, available during business hours. The agent must be a member of the Virginia State Bar, or a member, manager, officer, trustee or general partner of the entity. An entity cannot be its own agent.
4. Pay the annual registration fee. Virginia LLCs file no annual report. They pay a $50 annual registration fee to the SCC. The fee is due the last day of the 12th month after the month the LLC was organized, and every year after that. The SCC assesses the fee about two months ahead. A late payment adds a $25 penalty, and the LLC is canceled at the end of the third month after the due date.

A stock corporation files Articles of Incorporation (Form SCC619) for $75. It then files an annual report and pays an annual registration fee. The fee is $100 for up to 5,000 authorized shares, plus $30 for each additional 5,000 shares. Confirm the current amount on the SCC annual fee schedule. The annual registration fee is due the last day of the formation month, and the annual report is due the last day of the 12th month after formation.

Step 6: Register an Assumed Name If You Need One

If you do business under a name other than your legal name or your LLC's legal name, file an Assumed Name Certificate with the SCC Clerk's Office. Do not file it with the circuit court. The fee is $10 for an individual or an entity, and Virginia requires no newspaper publication. Start at scc.virginia.gov/businesses.

Step 7: Check Workers' Compensation and Hiring Rules

Workers' compensation applies once three or more employees are regularly in service (Va. Code 65.2-101). If you reach that threshold, you must carry the required coverage. The penalty for lacking it is up to $250 per day, to a maximum of $50,000 (Va. Code 65.2-805). That penalty is for workers' compensation. It is not a penalty for lacking liability insurance.

Seasonal help is common in tax work, so plan wages early. Virginia's minimum wage is $12.77 in 2026, $13.75 in 2027 and $15.00 in 2028.

Step 8: Check Your Local BPOL License

Virginia's business license is a local tax. The BPOL tax is governed by Va. Code 58.1-3700 et seq. and is administered by each city, county or town, usually through the Commissioner of the Revenue. Localities set their own rates, classifications and filing deadlines.

Not every locality levies a general license. Va. Code 58.1-3704 lets a locality levy none. Stafford, Rockingham, Bedford County, Washington County, Montgomery County, Louisa and Fluvanna are examples of localities without a general county license. Towns can displace the county tax, so check both the county and any town where you work.

The statute also sets a population-based floor on what a locality may require:

• Localities over 50,000 people cannot require a license for gross receipts under $100,000. They may waive the license for gross receipts up to $200,000 (verify the waiver ceiling with your locality or Virginia Tax).
• Localities with 25,000 to 50,000 people cannot require a license for gross receipts under $50,000.
• Localities under 25,000 people have no statutory floor.

Classification drives the rate. The BPOL cap for repair, personal and business services is 36 cents per $100 of gross receipts (Va. Code 58.1-3706). The 58 cent cap applies to the professional services list, which includes CPAs but not general tax return preparation. Virginia Tax's BPOL rules say tax preparation services are generally not professional services (23VAC10-500-460). A CPA who prepares returns as part of professional work may be treated differently, so ask the locality. Each locality sets its own rate and classification, so check your locality's code rather than relying on any statewide number.

Start with the Virginia Tax homepage at tax.virginia.gov and the BPOL chapter of the Code at law.lis.virginia.gov. Then find your locality's business license page or call the Commissioner of the Revenue and ask for a written answer on your classification and filing deadline.

What Results to Expect

Completing these steps does not guarantee clients, revenue or any particular tax outcome. If you follow the process, you may end up with a PTIN you can use on every Virginia return, a properly formed entity or a documented sole proprietorship, a clear local license answer for your location, and a calendar of recurring state and federal deadlines. Timelines depend on your filing volume and whether you pay for expedited service. Many new preparers find that their first season goes best when the paperwork and review process are settled before the busy months begin.

Common Mistakes to Avoid

• Assuming that having no state preparer license means no state obligations. The PTIN rule applies to every Virginia return.
• Leaving the PTIN off because a return is not rejected for it.
• Missing the fall PTIN renewal.
• Assuming your locality levies no license, or assuming a single statewide rate applies. Rates, floors and classifications are local.
• Applying the 58 cent professional rate to tax preparation without checking the classification.
• Naming a registered agent who does not meet Virginia's requirements, or naming the entity as its own agent.
• Missing the $50 LLC registration fee deadline. A late payment adds a $25 penalty, and continued nonpayment leads to cancellation.
• Filing an assumed name certificate with the circuit court. It is filed with the SCC for $10.
• Confusing the workers' compensation penalty with a requirement for liability insurance.

Tips for a Smoother Start

• Apply for your PTIN and settle your registered agent arrangement before you take your first client.
• Get your locality's license classification and filing deadline in writing before you open for business.
• Use free help from the Virginia Small Business Development Center network at virginiasbdc.org.
• Bring a qualified CPA or attorney into entity choice and any attest-related decisions early, not after you have signed a lease or hired staff.

Important Information

This article is informational only. It is not legal, tax or accounting advice, and reading it does not create an attorney-client or CPA-client relationship. Virginia and federal rules, fees and deadlines change. Confirm current figures with the named agencies before you act: the State Corporation Commission, Virginia Tax, your locality's Commissioner of the Revenue and the IRS. For complex situations, such as choosing an entity, handling employees or deciding on attest work, consult a qualified attorney or CPA.