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City of Alexandria, VA City of Alexandria, VA
Finance
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Page updated Dec 12, 2014 9:28 AM
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Tax Guide for New Businesses

Please note that this guide is only a summary of issues of interest to new businesses. Where necessary, links are provided to complete and accurate information on the taxes covered by this guide.

Quick Guide

   

 


About the City of Alexandria

The City of Alexandria is an independent, full-service City located on the west bank of the Potomac River. The City retains sole local governmental taxing power within its boundaries and is autonomous from any county, town or other political subdivision of the Commonwealth of Virginia.

The City adopted the Council-Manager form of government in 1922. The governing body of the City is the City Council, which formulates policies for the administration of the City. The City Council is composed of a mayor and six council members elected at-large for a three-year term. The Mayor is chosen on a separate ballot. City Council appoints the City Manager who serves as the City’s Chief Executive Officer. The City Manager has appointment and removal authority over department heads and other employees of the City and is responsible for implementing the policies established by the City Council.

The City provides a comprehensive range of municipal services including: education, health, welfare, housing and human services programs; public safety and administration of justice; community development, recreation, libraries, consumer assistance, cultural and historic activities; and transportation, environmental services and planning.

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Doing Business in the City

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.

Before Starting a Business

Any person or organization starting a business in Virginia must register with the State prior to opening the business. Registration can be completed 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 (or FIPS Code) on their R-1 is 51510. To ensure that the business is being registered in the correct jurisdiction, a business owner can look up the business' FIPS Code here or follow the instructions below.

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Determining if a Business is Located within the City

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

  • 22301
  • 22305
  • 22314

The 22302, 22304, 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. Any business located in the 22302, 22304, 22311, 22312, or 22206 zip code may verify its locality via the United States Postal Service website by entering the business address and clicking on "Mailing Industry Information."

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Filing Procedure for New Businesses

NOTE: The procedures below apply to all for-profit businesses operating in the City. Procedures for non-profit organizations, including those with some taxable activities, differ slightly from these general procedures and can be found in the Licensing and Tax Guide for Non-Profit Organizations.

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

Step 1: Registering 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.

Information on registration or incorporation can be obtained by contacting:

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. The Circuit Court imposes a small fee. Registration information can be obtained by contacting:

Clerk of the Circuit Court
520 King Street, Suite 307
Alexandria, Virginia 22314
703.746.4044
Email:
Email button(1)

Assumed Name Certificate (PDF)

Step 2: Visiting the Permit Center. 

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

The following can be obtained at the Permit Center:

Additional information is available at:

Permit Center
Department of Code Administration
301 King Street, Room 4200
703.746.4200

Step 3: Submitting the completed application with tax payment and all necessary approvals and documentation. 

The City business license application will be provided and may be submitted at the Permit Center 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 Permit Center accepts payment of the $50 license fee by check only. If a higher business license tax is assessed or if the licensee wishes to pay by other methods, the license tax may be paid at the Treasury Division in Room 1510 or at the payment kiosk in Room 1700. The Treasury Division accepts cash, check, money order or Discover Card. The payment kiosk accepts payments by check, Visa, MasterCard, or Discover Card.

Mailing a Business License Application

Business license applications submitted by mail must include payment of the business license tax. The business license application, payment (by check or money order), and any other required documentation may be mailed to:

City of Alexandria Business License
P O Box 34850
Alexandria, VA 22334-0850
 

Returned checks are subject to a $35 fee in accordance with state law.

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Filing Procedures for Solicitors, Canvassers and Peddlers

Persons seeking a permit to act as solicitors, canvassers, or peddlers within the City must follow certain specific procedures before doing business in the City.

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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)

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Business License 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 has no tax liability if its estimated gross receipts are less than $100,000. However, the business must still register with the Permit Center. The minimum annual license tax is $50 for businesses with estimated gross receipts of at least $100,000 but less than $1,999,999. Businesses with estimated gross receipts of $2,000,000 or more are assessed a percentage of their gross receipts.

Note: This tax schedule does not apply to the following business tax categories: renting by owners of residential or commercial property, contractors, wholesale merchants, amusements, public utilities, and regulatory activities. (Information on regulatory licenses can be found below.)

A more detailed explanation of this tax, including information on tax rates, is available on the Business License Tax page. Examples of Business Tax calculations can be found at How Business Tax is Calculated.

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Regulatory Licenses

The license tax for the following types of businesses and/or business activities are not based on gross receipts as described above and instead pay the flat license tax listed.

Businesses Licensed by the State Alcoholic Beverage Control Commission to Manufacture, Bottle or Sell Alcoholic Beverages 



Type of Business  Annual Tax per License 
Alcohol Distillers $1,000
Fruit Distillers $1,500
Wineries $600
Breweries $600
Alcoholic Beverage Bottlers $360
Beer Wholesalers $250
Retail On-Premise Wine/Beer Vendors
(hotels, restaurants and clubs only)
$150
Retail On-Premise Beer Vendors
(hotels, restaurants and clubs only)
$100
Retail Druggists $100
Off-Premise Beer Vendors $100
Wholesale Wine Distributors $50
Wholesale Druggists $10
Hospitals $10
Banquets $5

Businesses Manufacturing, Bottling or Selling Beverages of Not More Than 3.2% Alcohol 



Type of Business  Annual Tax per License 
Manufacturers $600
Bottlers $360
Wholesalers/Distributors
(Using Trucks or Vehicles for Delivery)
$300
Wholesalers/Distributors
(Not Using Trucks or Vehicles for Delivery)
$240
General Retailers
(for consumption on or off premises)
$50
Off Sale Retailers
(for consumption off premises only)
$50

Carnivals, Circuses, Menageries, Side Shows, Tent Shows, Rodeos, Animal Shows, Festivals, Fiestas, etc. 



Type of Business  Tax per License 
Sponsored by nonprofit, benevolent, religious, educational, patriotic or charitable organizations $120 for the first day; $120 for each day thereafter
Managed by nonprofit, benevolent, religious, educational, patriotic or charitable organizations $30 for the first day; $30 for each day thereafter
Managed by nonprofit, benevolent, religious, educational, patriotic or charitable organizations and performed on property owned by the managing organization Must obtain a license but no license tax shall be assessed or charged for the privilege.

Slot Machine Operators 



Number of Machines Operated  Annual Tax 
Fewer than 10 $20 per machine
10 or more $200

Fortune Tellers, Phrenologists, etc. 

Every fortuneteller, clairvoyant, phrenologist, spirit medium, chiromancer, astrologist, hypnotist or palmist operating in the City shall pay for the privilege an annual license tax of $1,000, and this license tax shall not be prorated.

Massage Parlor Operators 

Every person operating a massage parlor, as defined by Alexandria City Code Section 11-4-1, shall pay an annual license tax of $5,000. Before any license shall be issued, the applicant must produce evidence that he or she has obtained a permit under the provisions of Alexandria City Code Section 11-4-7.

Retail Peddlers 



Type of Goods Sold  Annual Tax per Selling Unit 
Consumable Items Only $250
Nonconsumable Items Only $500
Consumable and Nonconsumable Items $500

Itinerant Vendors 

Every person engaged in the business of an itenerant vendor within the City shall pay an annual license tax of $500. 

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Property Taxes

The City assesses property taxes on business tangible personal property, real estate and motor vehicles.

Business Personal Property Tax  

The City levies a tax each calendar year on all tangible property used in a business, profession or occupation. Business tangible property includes furniture, fixtures and equipment, including but not limited to desks, typewriters, personal computers, movable partitions, drapes, cabinets and chairs. In addition, all manufacturers, mining, processing or reprocessing companies, television or radio broadcasting companies, dairy, and dry cleaning or laundry businesses located in the City must pay a property tax on machinery and tools used in their business.

The Business Personal Property Tax is levied as a percentage of the assessed value of the property, based on the tax rate set by the City Council on or around May 5 each year. In the third week of March, the Finance Department mails property tax returns to all businesses licensed in the City that began operating prior to January 2 of the current year. Business Personal Property Tax returns are due May 1 (or the next business day if May 1 falls on a weekend or holiday). Business Personal Property Tax bills based on these returns are mailed in mid-August with a due date of October 5 (or the next business day if October 5 falls on a weekend or holiday).

Real Estate Tax 

Commercial property is assessed at 100 percent of the estimated fair market value as of January 1 of each year. For information on real estate assessment procedures, Board of Equalization and Assessment Review and the appeals process, please visit the Department of Real Estate Assessments. Real estate taxes are calculated by multiplying the property's assessed value by the real estate tax rate. Real estate taxes are billed and payable in two installments. The first tax bill is mailed in May and is due by June 15 (or the next business day if June 15 falls on a weekend or holiday). The second tax bill is mailed in October and is due by November 15 (or the next business day if November 15 falls on a weekend or holiday).

Personal Property (Vehicle) Tax and City Decal  

All motor vehicles normally parked, stored, or garaged (having situs) in the City of Alexandria, including vehicles with out-of-state plates, must be registered for the City's annual personal property tax and display a City windshield decal. All motor vehicles registered to a City address with the Virginia Department of Motor Vehicles must also be registered with the City, even vehicles normally parked, stored, or garaged in another state. New businesses have 30 days to register their vehicles with the City and obtain a City decal. The annual personal property tax bill is mailed in August and must be paid by October 5 (or the next business day if October 5 falls on a weekend or holiday). Payments on newly registered vehicles are due within 30 days of the billing date.

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Additional Business-Related Taxes, Tax Rates, and Fees

Tax or Fee Type  Current Fee or Tax Rate 
Business License Tax  Varies by type of business
Business Personal Property Tax  Tangible personal property: $4.75 per $100 of assessed value
Machinery and Tools: $4.50 per $100 of assessed value
Real Estate Tax  $1.038 per $100 in assessed value; $1.238 for properties in the
Potomac Yard Tier I Special Services District 
Refuse Fee $328 per year; added to biannual real estate tax bills for certain
required user properties
Personal Property (Vehicle) Tax  $5 per $100 in assessed value
City Decal Fee Varies; See decal fee schedule on Vehicle Tax page.
Sales and Use Tax  6% (5% state + 1% local)
Meal Sales Tax  4%
Transient Lodging Tax  8.5% of room rental charge + $1 per room per night
Short-Term (Daily) Rental Tax   1.0%; 1.5% for rental of heavy equipment
Admission Tax  10% (not to exceed $0.50 per person)
Cigarette Tax  $1 per pack
Gasoline Tax  2.1%
Public Rights-of-Way Use Fee   $0.97 per access line per month
Utility Tax  Varies
Bank Franchise License Tax  $0.80 per $100 of net capital

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Paying Business Taxes

Business License Tax 

Businesses that begin after January 1 must file the application and pay taxes immediately. Payments for new businesses may be submitted in person at City Hall. The Permit Center accepts payment of the $50 license fee by check only. If a higher business license tax is assessed or if the licensee wishes to pay by other methods, the license tax may be paid at the Treasury Division in Room 1510 or at the payment kiosk in Room 1700. The Treasury Division accepts cash, check, money order or Discover Card. The payment kiosk accepts payments by check, Visa, MasterCard, or Discover Card. The business license application, tax payment (by check or money order), and supporting documentation may also be mailed.

Please note that returned checks are subject to a $35 fee in accordance with state law.

Business Personal Property Tax 

Business personal property tax bills are mailed to property owners in late August or early September. Payment is due by October 5 (or the following business day if October 5 falls on a weekend). Any business owner wishing to pay by mail should write the account number on a check or money order and send it with the bill stub to:

City of Alexandria Business Personal Property
P O Box 34901
Alexandria, VA 22334-0901

Payments should not be mailed to any other address. Returned checks are subject to a $35 fee in accordance with state law. Information on all other payment methods, including paying by credit card or eCheck, is available on the Six Easy Ways to Pay page.

Real Estate Tax 

Real estate tax payments (by check or money order), if not made by the taxpayer’s bank or mortgage company, may be mailed with the bill stub to:

Treasurer's Office
P.O. Box 34750
Alexandria, VA 22334-0750

Any property owner wishing to pay by check or money order should write the account number in the memo field. Returned checks are subject to a $35 fee in accordance with state law.

Through the Automatic Bank Debit Program, taxpayers may register to make real estate tax payments monthly or have the lump sum of the tax amount due automatically debited on each of the two tax due dates. This program has proven to be popular with those who prefer making monthly payments and with those who may travel a great deal and may either forget the bill or be out of town when the tax payment falls due. (Example: preauthorized monthly payment schedule).

Information on all other payment methods, including paying by debit/credit card or eCheck, is available on the Six Easy Ways to Pay page.

Personal Property (Vehicle) Tax 

Personal property tax payments (by check or money order) may be mailed with the bill stub to:

Treasury Division
Department of Finance
City of Alexandria
P.O. Box 34899
Alexandria, VA 22334-0899
 

Any vehicle owner wishing to pay by check or money order should write the account number in the memo field. Returned checks are subject to a $35 fee in accordance with state law.

Information on all other payment methods, including paying by debit/credit card or eCheck, is available on the Six Easy Ways to Pay page.

All Other Business-Related Taxes and Fees 

Each business-related tax or fee will have its own filing and payment requirements. Information on paying all other business-related taxes can be found by visiting the Alexandria Tax Guide and clicking on the appropriate tax type.
 

Additional Payment Information 

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Additional Information and Resources

See Events, Courses, and Resources for City Businesses.

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Contact Us

CONTACT...   FOR QUESTIONS ABOUT...   PHONE NUMBER/
E-MAIL
 
Personal Property Tax  Personal Property (Vehicle) Tax Registration, Assessments, Relief and Account Changes 703.746.3995
Email: Email button(1) 
Business Tax   Business Licenses and Taxes 703.746.3903
Email: Email button(1) 
Tax Services & Enforcement  Delinquent Taxes: Collections and Payment Plans 703.746.3909
Email: Email button(1) 
  Daily Rental Tax, Bank Franchise License Tax, Public Service Corporation Assessments and Bankruptcy 703.746.3909
Email: Email button(1) 
Tax Audit, Research & Analysis  Meals and Beverage Tax; Transient Lodging (Hotel) Tax; Utility Tax; Communications Tax; Admissions Tax 703.746.3903
Email: Email button(1) 
Treasury Division  Real Estate Tax--Billing and Payment; Paying Taxes and Parking Citations 703.746.3902
Email: Email button(1) 

301 King St.
Alexandria, VA 22314
703.746.3900
Fax: 703.838.4987
E-mail

Office Hours:
Monday - Friday
8 a.m. - 5 p.m.