Virginia BPOL Tax Explained: Population Floors, Rate Caps by Class and Filing Deadlines
If you sell goods or services in Virginia, you may owe a Business, Professional and Occupational License (BPOL) tax to the locality where you operate. A local BPOL bill can come as a surprise after you form an LLC or corporation with the state. BPOL is not a state tax, the State Corporation Commission (SCC) does not issue it, and not every locality levies it. This guide explains how the tax works under Chapter 37 of Title 58.1 of the Code of Virginia (Va. Code 58.1-3700 and following), where the floors and caps come from, and when your filing is due.
This is informational content, not legal or tax advice. Rates, fees and deadlines are set by each locality, so confirm them with your locality's commissioner of the revenue or finance officer before you file.
What BPOL is
BPOL is a local license tax on the privilege of doing business in a particular locality. It is usually measured by gross receipts, meaning the total money your business brings in before expenses. The commissioner of the revenue or the locality's finance officer assesses it. It is not an income tax, and it is not a state license.
Virginia has no general state business license. The SCC forms entities and handles the state filings you may already know about. For example, Articles of Organization (Form LLC1011) cost $100, an LLC pays a $50 annual registration fee and files no annual report, an assumed name (DBA) is filed with the SCC for $10, and a name reservation costs $10 for 120 days. None of those filings replace a local BPOL license. Confirm current SCC fees at scc.virginia.gov/businesses.
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Who must apply for a BPOL license
Under the definite place of business rule, a business applies for a license in the locality where it has a definite place of business. If a business has no definite place of business, the owner's residence is used for licensing. A separate license is generally needed for each place of business and for each business.
Home-based businesses and online sellers are included. Va. Code 58.1-3703.1(A)(1) covers them, so working from your kitchen table or selling through a website does not exempt you from the tax. Whether you owe it depends on your gross receipts and the locality's floor, covered next.
Gross receipts floors by population
Virginia sets a floor below which a locality cannot require a BPOL license. The floor depends on the locality's population:
| Locality population | License cannot be required for gross receipts under |
|---|---|
| Over 50,000 | $100,000 |
| 25,000 to 50,000 | $50,000 |
| Under 25,000 | No floor applies |
Localities with more than 50,000 people may also waive the license for businesses with gross receipts up to $200,000. Verify this waiver ceiling with your locality before you rely on it.
Fees and rate ceilings
The state caps the license fee under Va. Code 58.1-3703(A) at $50 in a locality over 25,000 people and $30 in a smaller one. The statute still shows $100 for localities over 50,000, but it requires those localities to reduce the fee to $50, so this guide uses $50 (verify with your locality). A locality cannot charge both a license fee and a gross receipts tax on the same receipts.
Rate ceilings are set per $100 of gross receipts by business class. These are maximums, not the rate your locality charges:
| Business class | Ceiling |
|---|---|
| Contracting | $0.16 per $100 of gross receipts |
| Retail | $0.20 per $100 of gross receipts |
| Financial, real estate and professional services | $0.58 per $100 of gross receipts |
| Repair, personal, business services and all other | $0.36 per $100 of gross receipts |
| Wholesale | $0.05 per $100 of purchases |
| Federal research and development prime contractors | Up to $0.03 per $100 of federal funds |
Direct sellers, photographers, peddlers and public service companies follow their own rules. Some rates grandfathered from 1978 can be higher than these ceilings, so a locality may differ. Treat the table as a ceiling and check the locality's adopted rate.
A short-term rental business under Va. Code 58.1-3510.4 and 58.1-3706(C) means renting equipment for 92 days or less. It is taxed as retail. In BPOL law, short-term rental does not mean an Airbnb or other vacation home rental.
Filing deadlines and penalties
- First-year deadline: Apply before you begin business in the locality.
- Renewal deadline: If you were licensed the prior year, the deadline is March 1. A locality may choose a later date, up to May 1 (Va. Code 58.1-3703.1).
- Common local dates: Localities in practice use March 1, March 15, April 15 or May 1. Some use a July 1 license year.
- Late penalty: The penalty for late filing or late payment is 10 percent. If both are late, only the late filing penalty applies (Va. Code 58.1-3703.1(A)(2)).
- Interest: Interest runs on late payments.
- Omitted tax: A locality can assess omitted tax for the three preceding tax years (Va. Code 58.1-3903).
Check the exact due date with your locality. Dates differ, and the locality sets its own schedule.
What a Virginia business license costs
There is no single statewide BPOL cost. Your bill depends on your locality, your gross receipts and your business class. These examples come from the locality guides, and each applies only to the locality named:
- Prince William County: No BPOL tax on gross receipts under $500,000.
- Spotsylvania County: No BPOL tax on gross receipts under $2,000,000.
- Loudoun County: A flat $30 for receipts up to $200,000.
- Stafford County: No BPOL tax at all.
Fairfax County example: a retailer with $300,000 of gross receipts pays 3,000 times $0.17, which is $510. The $0.17 figure is the Fairfax County rate used in this example, so confirm the current rate with the Fairfax County commissioner of the revenue before you budget.
Some localities have no general county license at all. Examples include Rockingham, Bedford County, Washington County, Montgomery County, Louisa and Fluvanna. Towns can also replace the county tax, so the answer may be a town license instead.
Special cases
- Contractors working in a second locality: A contractor owes the second locality only on work there above $25,000 (Va. Code 58.1-3715). A contractor who paid town tax inside a county gets a credit for that tax (Va. Code 58.1-3714(C)).
- Contractor license proof: Contractors must show proof of workers' compensation coverage to be licensed (Va. Code 58.1-3714(B)).
- Peddlers and itinerant merchants: Their annual BPOL tax is capped at $500 a year.
- Nonprofits: A 501(c)(3) organization is exempt, except for receipts from unrelated business activity (Va. Code 58.1-3703(C)(18)).
Towns and county taxes
A county license tax does not apply inside a town that taxes the same privilege, unless the town has opted in (Va. Code 58.1-3711). If your business is in a town such as Leesburg, Herndon, Vienna, Blacksburg or Christiansburg, you deal with the town, not the county. Confirm with the town office before you assume the county license applies or does not apply.
How to find your locality's rules
BPOL rates, floors and deadlines are set locally, so start with the locality guides. Use the local guides index to find your city or county, and check the list of localities with no business license tax to see whether your area levies one. Per-locality fees and dates appear on the individual guides for Fairfax County, Loudoun County, Prince William County, Spotsylvania County, Stafford County, Arlington, Alexandria, Manassas and Fredericksburg.
For the statute itself, read Chapter 37 of Title 58.1 at law.lis.virginia.gov. For state tax questions, see the Virginia Department of Taxation at tax.virginia.gov.
Before you file, confirm your rate, floor, filing date and penalty with your locality's commissioner of the revenue or finance officer. The locality, not this guide, controls the bill you owe. For a complex situation, such as multiple locations, contracting across several localities or a business that may fall under a town tax, consult a qualified attorney or CPA.