City of Alexandria, VA

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Business License Tax

Note: New Business Tax System May Affect Payments

The City is transitioning to a new tax system for business personal property taxes and business license tax. If you need to make an on-line or phone payment for business personal property tax bills that were due before October 25, 2009 you may need to call 703.746.3909 to obtain your new account number.

General Information
Who Must Pay the Tax
Definition of Gross Receipts
New Businesses
Existing Businesses
Business Tax Rate Schedule
How the Tax is Collected
Penalty for Failure to Pay Tax
Failure to File: Statutory Assessment of Business License Tax
Business Records and Reports Subject to Audit
Appeals
Further Information

NOTE: All forms on this page open in a new window. PDF forms require Adobe Acrobat Reader.

General Information

The City extends the privilege to engage in a commercial enterprise by issuing a business license. Persons without a business license may not lawfully engage in business. The license, which is often referred to as a permit or certificate of eligibility, must be renewed annually. Businesses, professionals, and occupations that meet all qualifications and legal requirements are eligible to obtain licenses upon application and payment of the license tax.

Who Must Pay the Tax

All persons (including corporations, partnerships and individuals) doing business in the City of Alexandria, or self-employed professionals on a part-time or full-time basis who have annual gross receipts in excess of $10,000, are required to pay an annual tax on gross receipts earned in the City. (This includes persons with "home occupation" businesses.)

Definition of Gross Receipts

Businesses, professions, and occupations are assessed an annual tax based on gross receipts earned during the past year. Gross receipts may be calculated on either a cash or accrual basis, but the basis must be the same as that used for federal income tax purposes. Gross receipts are the whole, entire, total receipts attributable to the licensed privilege, without deductions. No deduction may be made for the cost of the property sold, the cost of materials, labor, services, or other costs, interest or discounts paid, or any expense whatsoever.

New Businesses

Before You Start

Virginia Department of Taxation's Business Registration Pamphlet (PDF)

If you are starting a business in Virginia, you must register with the State prior to opening your business. You may do so online or by filing Form R-1 with the Virginia Department of Taxation. Businesses located in the City of Alexandria that collect sales tax must ensure that the Business Locality Code on their R-1 is 51510.

Businesses with the following zip codes are located in the City of Alexandria:

22301
22302
22304
22305
22313
22314

The 22311 and 22312 zip codes are shared between Fairfax County and the City of Alexandria. The 22206 zip code is shared between Arlington County and the City of Alexandria. If your business is located in the 22311, 22312, or 22206 zip code, you may verify your locality via the United States Postal Service web site. After entering the business address, simply click on "Mailing Industry Information" to see whether you are located in the City's jurisdiction or within one of the counties.

Filing Procedure for New Businesses

Obtaining a business license in Alexandria is generally a three-step process:

Step 1: Register the business entity.

a. Registration of a Corporation or a Limited Partnership

All corporations (foreign and domestic) and limited partnerships conducting business in Virginia must register with the Virginia State Corporation Commission. To become incorporated in Virginia, an organization must file articles of incorporation and amendments with the State Corporation Commission. Procedures for filing can be found in the Code of Virginia Stock Corporation Act, Title 13.1-601 through 13.1-800.

For information on registration or incorporation, please contact:

Virginia State Corporation Commission
P.O. Box 1197
Richmond, VA 23218
866.722.2551 or 804.371.9733

b. Registration of a General Partnership or Trade Name

General partnerships and trade names must be registered with the Clerk of the Circuit Court. A small fee is imposed by the Circuit Court. For registration information, contact:

Clerk of the Circuit Court
520 King Street, Suite 307
Alexandria, Virginia 22314
703.746.4044
Email:

Assumed Name Certificate (PDF)

Step 2: Visit the Permit Center (One Stop Shop).

In an effort to improve the business license application process, the City has created a Permit Center or “One Stop Shop” where applicants can obtain the approvals and registrations needed by most businesses.

The following can be obtained at the Permit Center:

For more information, contact:

Permit Center (One Stop Shop)
Office of Building and Fire Code Administration
301 King Street, Room 4200
703.746.4200

Step 3: Submit the completed application with all necessary approvals and documentation.

The City business license application will be provided and may be submitted at the Permit Center (One Stop Shop) at the address listed above. Some businesses may require additional documentation and/or permits.

NOTE: The assessed business license tax must be paid before a business license will be issued. The One Stop Shop accepts payment of the $50 license fee by check only. If a higher business license tax is assessed, it must be paid at the Treasury Division, Room 1510. The Treasury Division accepts cash, check, money order or Discover Card. No other credit card type is accepted at this time.

Penalty for Failure to File

Any person starting a business without a license shall be guilty of a misdemeanor and unless otherwise specifically provided by law, shall on conviction thereof be fined not less than $5 nor more than $500 for each separate offense. After 30 days, the penalty assessed increases to $10 or 10 percent of the amount of the license tax, whichever is greater. The penalty shall be assessed and paid along with the license tax and shall become a part of the license tax. (City Code Section 9-1-14)

Computation of Tax for New Businesses

Every person beginning a business, profession, or occupation is required to estimate the gross receipts he/she will receive between the date of beginning business and the end of the current license year (December 31). The current year's license tax is computed on that estimate. If estimated gross receipts are $2 million or greater, the estimated license tax is adjusted at the end of the tax year to reflect the business' actual gross receipts.

In the first year of operation: A business is exempt from the business license tax if its estimated gross receipts are less than $100,000 per year. However, the business must still register with the Permit Center. The minimum annual license tax is $50 for businesses with estimated gross receipts between $100,000 and $1,999,999. Business with estimated gross receipts of $2,000,000 or above are assessed a percentage of their gross receipts. See below for tax rates.

For a more detailed explanation of this tax with examples, see How Business Tax is Calculated.

Existing Businesses

Renewing the Annually Issued License

Businesses, professions and occupations must file a license renewal application and pay the license tax by March 1 of each year. Most of the City license taxes are based on total gross receipts earned during the previous business year.

If you do not receive a business license renewal form, please contact us. You are still liable to pay the tax by the due date. Failure to receive a license renewal form does not relieve the taxpayer from the payment of tax, penalty and interest.

Penalty for Failure to Pay Tax

Any business that operates without a license for more than 30 days or fails to renew a license by the due date will be assessed a penalty of $10 or 10 percent of the license tax, whichever is greater. (City Code Section 9-1-12)

Computation of Tax for Existing Businesses

The Business License Tax for existing businesses is calculated based on the prior year's gross receipts. A business is exempt from the business license tax if its gross receipts are less than $10,000. However, the business must still register and renew annually. The minimum annual license tax is $50 for businesses with gross receipts of at least $10,000 but not more than $99,999. Business with gross receipts of $100,000 or above are assessed a percentage of their gross receipts. See below for tax rates.

For a more detailed explanation of this tax with examples, see How Business Tax is Calculated.

Changing Business Location within the City

If any business changes location within the City, the business representative must fill out a new Interdepartmental Form and obtain all required zoning and code approvals as well as any permits that may be required, such as health permits. This process should be completed prior to relocating. For assistance or more information, please contact the Business Tax office.

Business Tax
301 King Street, Room 1410
Alexandria, VA 22314
703-746-3903
Email:

Closing Your Business

Any business which has already paid the license tax for the year and then permanently ceases to conduct business may apply for a refund of the portion of the license tax paid. The refund will be prorated on a monthly basis to make certain that the license privilege covers only the portion of the year for which the business was operating. If the license tax is paid upon estimated gross receipts, a refund will not be issued unless the estimated gross receipts exceed the licensee's actual gross receipts. The minimum license tax of $50 will not be refunded. The City will reduce any business license refund by any other taxes due and owing to the City by the licensee.

If you have ceased to conduct business in the City, you may close your business license tax account by filling out the Cessation of Business Form and returning it to:

Business Tax
P.O. Box 178
Alexandria, VA 22313
703.746.3903
Email:

Business License Tax Rate Schedule

SECTION	TITLE OF SECTION	TAX RATE
9-1-71	Professional services	.58 per $100/minimum tax $50
9-1-72	Repair, personal and business services	.35 per $100/minimum tax $50
9-1-75	Retail merchants	.20 per $100/minimum tax $50
9-1-77	Retail and wholesale merchants	.20 per $100/minimum tax $50
9-1-78	Wholesale merchants based on gross purchases	.05 per $100/minimum tax $50
9-1-79	Contractors and contracting	.16 per $100/minimum tax $50
9-1-82	Amusements and entertainments	.36 per $100/minimum tax $50
9-1-84	Public utilities Telephone Telegraph Water, heat, light and power	$0.50 per $100 of gross receipts 2% of gross receipts One-half of 1% of gross receipts
9-1-87	Soliciting agents	.20 per $100/minimum tax $50
9-1-88	Renting of residential property Renting of commercial property	.50 per $100/minimum tax $50 .35 per $100/minimum tax $50
9-1-102	Builders and developers	.16 per $100/minimum tax $50
9-1-116	Distress merchandise sale	.20 per $100/minimum tax $50

The following businesses are charged a flat rate in lieu of a gross receipts tax:

Peddlers
Massage parlors
Fortune tellers
Alcoholic beverages
Carnivals
Circuses
Festivals
Itinerant Vendors

How the Tax is Collected

License renewal applications and taxes are due by March 1 of each license tax year. Businesses that begin after January 1 must file the application and pay taxes immediately. The business license tax application and tax payment should be mailed to:

Business Tax
Department of Finance
City of Alexandria
P.O. Box 34715
Alexandria, VA 22334-0715
703.746.3903
Email:

Penalty for Failure to Pay Tax

Persons who fail to pay a business license tax by March 1 of each year are charged a penalty of $10 or ten percent of the taxes due, whichever is greater. However, the penalty cannot exceed the tax due. In addition to the late payment penalty, interest accrues on the unpaid taxes and penalty. Interest on all delinquent taxes accrues at an annual rate of ten percent the first year, and five percent each year thereafter, until all taxes and penalties are paid. The City computes interest from the thirty-first day of delinquency. Any persons who fails or neglects to renew his/her license may additionally be subject to a fine of up to $500. (City Code Section 9-1-12 and 9-1-13)

Failure to File: Statutory Assessment of Business License Tax

If a taxpayer fails to file a business license tax return, Finance staff will assess and enforce the tax based on the best information available. (Code of Virginia Section 58.1-3903)

If the company has previously reported gross receipts or tangible personal property information, staff will use the previously reported information to prepare a statutory assessment. If staff is unable to obtain the necessary information, staff will prepare a statutory assessment by reviewing the gross receipts or tangible personal property filings of a similar company. If this information is not available, staff will statutorily assess the business based on the best possible estimate.

Business Records and Reports Subject to Audit

Every business, profession and occupation required to pay a City license tax should keep current and accurate records for audit by the City. Audits are conducted to ensure that business establishments are complying with City business license regulations. Also, audits are initiated when discrepancies are discovered in annual business tax filings.

Appeals

The taxpayer can appeal the business license if he disagrees with it. The taxpayer must first file an administrative appeal with the Director of Finance. The locality has a limited time to respond. Appeals of the director's determination can be made to the State Tax Commissioner at the Virginia Department of Taxation. The taxpayer also has a right to appeal an assessment in the Circuit Court. (City Code Sections 9-1-43 through 9-1-43.2)