Main content
City of Alexandria Homepage
Saturday, July 26  •  73°Mostly Cloudy Air Quality: Yellow
CloseWeather Forecast
Today: High 90° Low 72°
Partly CloudyAir Quality: Green
Sun: High 86° Low 71°
Scattered ThunderstormsAir Quality: Green
Mon: High 86° Low 63°
Isolated Thunderstorms
Tue: High 79° Low 60°
Partly Cloudy
City of Alexandria, VA City of Alexandria, VA
Finance
Share Share RSS RSS Print Print Text Size Text Size NormalText Size LargeText Size Extra Large
Page updated May 28, 2014 12:59 PM
CloseComments

No Comments Posted Yet

Business License Tax 

   


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.

Due Dates

New Businesses: Businesses that begin after January 1 must file the business license application and pay taxes immediately. 

Existing Businesses: Business license renewal applications and taxes are due by March 1 of each license tax year.

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.

Back to Top 


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

Before Starting a Business

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

Persons starting a business in Virginia must register with the State prior to opening the business. Registration may 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 registering in the proper jurisdiction, the business owner may look up the FIPS Code here or follow the instructions below.

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

Filing Procedure for New Businesses

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

Step 1: Registration of 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.

Additional information on registration or incorporation can be obtained by visiting the Virginia State Corporation Commission website or 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 can be obtained by contacting:

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

Step 3: Submitting the completed application with 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 cash, 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
 

Back to Top 

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.

Solicitor Permit Procedures
Solicitor Permit Application (PDF)

Back to Top 

 

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)

Back to Top 

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 has no tax liability 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. Businesses with estimated gross receipts of $2,000,000 or above are assessed a percentage of their gross receipts. See below for tax rates.

A more detailed explanation of this tax with examples can be found on the How Business Tax is Calculated page.

Computation of Tax for Regulatory Licenses

The license tax for the following types of businesses and/or business activities are not based on gross receipts as described above. Businesses engaging in these types of business activity 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. 

Back to Top 


Existing Businesses

Renewing the Annually Issued License

Businesses, professions, and occupations must file an annual business license renewal application and pay any applicable 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.

Under Federal and State tax provisions, localities such as the City are permitted to collect social security numbers for tax administration purposes. The taxing authority is charged with keeping the information confidential. However, in certain situations, it is optional that the taxpayer provide the social security number. Taxpayers are free to withhold this information if they feel that providing it would raise concerns about privacy and data security.

Any business that does not receive a business license renewal form may contact the City or download a form below. The business will 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 Renew License

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)

Back to Top 

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 has no tax liability 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. Businesses with gross receipts of $100,000 or above are assessed a percentage of their gross receipts. See below for tax rates.

A more detailed explanation of this tax with examples can be found on the How Business Tax is Calculated page.

Back to Top 

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. Additional assistance or information can be obtained by contacting:

Business Tax
703-746-3903
Email:
 Email button(1)

In-person assistance can be obtained Monday through Friday, 8 a.m. to 5 p.m., at:

Tax Services
301 King Street, Room 1700
Alexandria, VA 22314

Closing a Business

Any business that 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 based on prior year gross receipts. The prior year gross receipts will be prorated for the number of months in which the business was operating, and any resulting overpayment of tax will be refunded. 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.

Any business that ceases conducting business in the City in calendar year 2013 may close the business license tax account by filling out the 2014 Cessation of Business Form and returning it to:

Business Tax
P.O. Box 178
Alexandria, VA 22313
703.746.3903
Email: Email button(1)

Prior year forms are available here for businesses that closed before calendar year 2013.

Back to Top 

 


Business License Tax Rate Schedule 

SECTION  SECTION TITLE  TAX RATE 
9-1-71 Professional services $0.58 per $100/minimum tax $50
9-1-71.1 Financial services     $0.35 per $100/minimum tax $50
9-1-72 Repair, personal and business services $0.35 per $100/minimum tax $50
9-1-75 Retail merchants $0.20 per $100/minimum tax $50
9-1-77 Retail and wholesale merchants $0.20 per $100/minimum tax $50
9-1-78 Wholesale merchants based on gross purchases $0.05 per $100/minimum tax $50
9-1-79 Contractors and contracting $0.16 per $100/minimum tax $50
9-1-82 Amusements and entertainments $0.36 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 $0.20 per $100/minimum tax $50
9-1-88 Renting of residential property
Renting of commercial property
$0.50 per $100/minimum tax $50
$0.35 per $100/minimum tax $50
9-1-102 Builders and developers $0.16 per $100/minimum tax $50
9-1-116 Distress merchandise sale $0.20 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

Back to Top 

How the Tax is Collected

New Businesses 

Businesses that begin after January 1 must file the application and pay taxes immediately. Payments for new businesses may be submitted in person at either the Permit Center, the Treasury Division, or the payment kiosk in Room 1700. 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 cash, check, Visa, MasterCard, or Discover Card.  The business license application, payment (by check or money order), and any supporting documentation may also be mailed.

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

Existing Businesses 

Business license renewal applications and taxes are due by March 1 of each license tax year. The business license renewal application should be mailed to:

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

Business may choose to mail payment by check or money order with the renewal application or to use one of the City's other payment options.  Any business paying by check or money order should be sure to write the business license account number in the memo field of the check or money order.  Returned checks are subject to a $35 fee in accordance with state law.

Any business that does not receive a business license renewal form should contact the City. The business will still be liable for filing the renewal application and paying 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.

Back to Top 

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)

Back to Top 

Failure to File: Statutory Assessment of Business License Tax

If a taxpayer fails to file a business license tax return, staff will assess and enforce the tax based on the best information available. (Code of Virginia Section 58.1-3903)  If the business has previously reported gross receipts or tangible personal property information, staff will use the previously reported information to prepare a statutory assessment at a 15 percent increase over the previous year's assessment. If staff is unable to obtain the necessary information, they 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.

Back to Top 

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.

Back to Top 

Appeals

The taxpayer can appeal the business license tax if he or she disagrees with it by first filing an administrative appeal with the Director of Finance. The City 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)

Back to Top 

Further Information

New Businesses 

Additional information useful to persons wishing to open a business in the City can be found in the Tax Guide for New Businesses.  Additional tax forms and taxpayer assistance can be obtained by contacting:

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

Existing Businesses 

Additional tax forms and taxpayer assistance can be obtained by contacting:

Business Tax
703.746.3903
Email: Email button(1)

Or visiting:

Tax Services
301 King Street, Room 1700
Alexandria, VA 22314
Monday through Friday
8 a.m. to 5 p.m.
 

All Businesses 

Additional information useful for all City businesses can be found on the Events, Courses, and Resources for City Businesses page.

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.