Registration, Taxes, and Licenses

Congratulations! You have a business plan, and you are ready to get started. Registering your business on the federal, state, and local levels is a crucial step. Assistance is available at each level.

The Virginia Department of Small Business and Supplier Diversity has created very helpful guides on the Business One Stop platform. In particular, see this guide for Aspiring Entrepreneurs.

Do you have an existing business that is new to Virginia? Read this information from the Virginia Business One Stop.

Decide on a name for your business, and make sure the name is available

In Virginia, you may conduct business under your legal name, or any name that you register with the Virginia State Corporation Commission.

Depending on the structure you choose (see below) you may also wish to register a fictitious name (also called a “trade” name, or a “doing business as”).

For example, if you register your business as Mary Smith’s Delicious Cookies, Inc. but you advertise your business as “Mary’s Cookies” you will want to register both the corporation name, and “Mary’s Cookies”.

Make sure your chosen name is available, and that your preferred domain name is available before you start the registration process.

Note: Registering your business name does not provide trademark or copyright or other similar protections.

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Select a business entity structure/type which will provide you with the proper legal protections and tax benefits

The legal structure you choose has a lot to do with your overall tax strategy and personal liability exposure you’re willing to risk. Some examples of legal structures include but are not limited to, sole proprietorships, limited liability companies, partnerships, nonprofits, and corporations.

Fairfax CORE has many trained business coaches who are available to assist you in understanding your options.

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Establish your business entity with the Internal Revenue Service.

Once you have established your legal structure, you will most likely need to obtain a taxpayer identification number from the Internal Revenue Service.

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Virginia-based businesses pay taxes on the Federal, State, and local level.

For an overview, read this Fairfax County Economic Development Authority overview of major state and local taxes and fees that may be applicable to businesses in Fairfax County. Then, see each section below for more details.

Understand your tax obligations with the Commonwealth of Virginia

Tax obligations to the Commonwealth of Virginia are based on the characteristics of each business. According to the Virginia Tax website, the most common tax types include:

  • Retail sales tax (in-state dealers)
  •  Use tax (out of state dealers with nexus in Virginia, or those choosing to collect sales tax as a courtesy to their Virginia customers);
  • Employer withholding (if you have Virginia employees); and
  • Corporation or pass-through entity income taxes.

Source: www.tax.virginia.gov

Note:  These business taxes are different than, and in addition to, income tax.

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Employer Regulations

Before you expand your team, make sure that you are aware of your obligations as an employer.

As a general rule, a business with more than two employees is required to carry workers’ compensation coverage. An employee is viewed broadly under workers’ compensation law and includes part-time, seasonal and temporary workers, minors, trainees, immigrants and working family members.

For a contractor or other business that hires subcontractors to assist in their trade, business or to complete a contract, the subcontractors’ employees are included when counting the total number of employees to assess when coverage is required. If the total of the contractor’s employees plus the sum total of subcontractors’ employees is more than two, then coverage is required. This requirement applies regardless of whether the subcontractor has their own workers’ compensation coverage. For additional contractor information read the Contractor Information Sheet. An employer that is not required to carry coverage under the law may obtain coverage voluntarily.

Source:  Virginia Workers’ Compensation Commission

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Know what your industry requires.

Many professions have licensing requirements, which are managed by Commonwealth of Virginia. Check these agencies to determine whether your profession has licensing or registration requirements:

Certain professions including contractors, builders and developers, architects, engineers, and massage therapists will be required to show proof of license to obtain business licenses.

Additionally, certain businesses may be regulated by Fairfax County or the locality in which the business operates. See the Guide for Specific Industries and Guide for Town and City-based Businesses.

Whether your business will operate from your home or a commercial location, you likely need a permit.  Read the Location Considerations and Location Permits Subguide for more information.

Obtain your business license (BPOL) from your locality’s tax department and learn about business tangible property taxes.

A few general notes about business licenses:

  • Businesses (including home-based businesses) must receive a business license, commonly called BPOL, from the jurisdiction in which their business is physically located. Tax rates, due dates and application processes vary. Please see below to link directly to your jurisdiction’s information. BPOL must be applied for within 75 days of starting a business.
  • BPOL is renewed annually, and the payment is calculated based on gross receipts of the business.
  • In addition to BPOL, businesses are required to pay annual business tangible property taxes to their locality. Businesses in the towns of Clifton, Herndon, and Vienna pay business tangible property taxes to Fairfax County.

Depending on your business type, there may be other permits, licenses or taxes required. Connect with a business counselor to be sure that you are aware of the obligations associated with your specific business in your chosen location. 

Click on the tab for your jurisdiction to learn more and read the Guide for Town or City-based Businesses to learn more.

Not sure of your location? See About the CORE Localities for information.

All business owners, including owners of home-based businesses, are subject to the BPOL tax. Business owners are required to register their business with the Department of Tax Administration (DTA) within 75 days of beginning business operations in Fairfax County. If not filed within 75 days, a 10% penalty for late filing will apply.

Business owners must renew their BPOL License each year.

Businesses registered with DTA in the previous year will receive a renewal application in the mail in January. First time applicants may download the BPOL Application.

You will need the following information to complete the form:

  • IRS taxpayer ID number (FEIN)
  • NAICS Code
  • Owner name
  • Trade name
  • Business address
  • Description of business
  • Estimated first year gross receipts/purchases
  • Begin date
  • Authorized Signature/Title
  • Contact Information

A BPOL tax bill will be sent for any faxed or emailed filing forms. Once the taxes are paid in full, you will receive your business license.

Other Business Taxes and Requirements:

For businesses classified as “Contractors”, “Builders and Developers”“Architects”, and “Professional Engineers” there are additional items that must be provided along with your application.

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Town Code Sec. 4-9 permits the levy of penalties up to 10% for failure to file and/or pay; Sec. 4-14 establishes criminal penalties for failing to apply; and, Sec. 9-10.i. provides that Use Permits expire three months after notice is given that BPOL is delinquent.

Town of Clifton businesses also pay business tangible (or business personal) property taxes to Fairfax County: Understanding Business Tangible Property and Vehicle Taxes | Tax Administration (fairfaxcounty.gov)

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Per Town Code Sec. 30-212, Every person engaging in this town in any business, trade, profession, occupation or calling (collectively in this section “a business”) shall apply for a business license, unless exempted by law.  A Town of Herndon business license must be obtained within 30 days from the day the business begins operating in the town.

Businesses in the Herndon must first obtain a Zoning Permit:

If business will be located at a commercial location, click here.

If business will be a “home-based business”, click here.

If filing as individual or sole proprietor, complete the Residency Status Affidavit to establish proof of residency status.

Out-of-town Contractors:

Contractors from outside the Town of Herndon doing work within the Town must submit a BPOL application and proof of Worker’s Compensation Form (Form 61-A) as well as a copy of their State Contractor’s License. See the Town of Vienna BPOL website for details.

Town of Herndon businesses also pay business tangible (or business personal) property taxes to Fairfax County: Understanding Business Tangible Property and Vehicle Taxes | Tax Administration (fairfaxcounty.gov)

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All individuals engaging in any business, trade, profession, or occupation in the Town of Vienna – as defined in Town Code Sec. 8-3 – must apply for a license for each business, unless exempted by law.

Other taxes and licenses required by the Town of Vienna include: meals tax, massage therapy license and a peddler’s license. 

Town of Vienna businesses also pay business tangible (or business personal) property taxes to Fairfax County: Understanding Business Tangible Property and Vehicle Taxes | Tax Administration (fairfaxcounty.gov)

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General Information and Terms
The Commissioner of the Revenue assesses all businesses operating within the City of Fairfax for the privilege of conducting their business in the City. All businesses operating in the City of Fairfax must apply for an annual license with the Commissioner of the Revenue. Business license taxes are levied annually and are typically based on a business’s gross receipts. All new businesses must submit an application within 30 days of the start of operations. All business licenses expire at the end of each calendar year and must be renewed annually by March 1.

Before applying for BPOL, businesses must first register with the State Corporation Commission, if required, and must have obtained zoning approval and complied with all city occupancy and uses codes. See Business License Tax | City of Fairfax, VA (fairfaxva.gov) for more information.

Personal Property Taxes:

Businesses in Fairfax City pay personal property taxes and business tangible property taxes to Fairfax City.

Other Fairfax City Business tax information:

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