What Business Licenses and Permits are Needed in Virginia?
Starting a business in Virginia will mean potentially registering with a number of federal, state, and local agencies. Let’s take a look at common licenses and permits a business will register for in Virginia.
Before applying for any licenses, the legal structure of the business will need to be established. Learn more about the differences between the sole proprietorship, general partnership, corporation, and Limited Liability Company (LLC).
Related: Comparison of Business Entities
General Business License
There is no general state of Virginia business license, however, many cities require businesses to be licensed in order to operate. Rules for business registration vary depending on location and what the business does. Below are a few cities that have licensing requirements.
Virginia Beach – All businesses operating in the city limits of Virginia Beach, even home-based businesses, are required to file a business license application with the Virginia Commissioner of Revenue Office.
Norfolk – All businesses and professional operations must purchase a business license before starting in Norfolk.
The cost of a business license is based on the estimated annual revenues of the business. Businesses under $100,000 will be assessed a minimum business license fee of $50. Businesses over $100,000 will have a tax rate based on the type of business activities (contractors, retail, repair/personal/business services, financial/real estate/professional services, and wholesale businesses)
Fairfax – All businesses operating in the City of Fairfax will apply with the Commissioner of the Revenue for an annual license. In addition, a business license tax is due annually and is usually based on the gross receipts of the business.
Companies operating in Fairfax County are also subject to the Business, Professional and Occupational License (BPOL) Tax. The BPOL applies to certain businesses with annual gross receipts or purchases of over $100,000.
Cheaspeake – The Chesapeake Commissioner of the Revenue assesses business license taxes on any business activity conducted in the city limits of Chesapeake. All businesses must purchase a license before starting operations.
Richmond – Before starting a business or conducting business activities in Richmond, a New Business License Application will need to be filed. The cost of a business license varies depending on the business’s gross receipts and the type of activities performed by the business.
Newport News – Within 30 days of starting a business, a Business, Professional, and Occupational License (BPOL) will need to be applied for through the Commissioner of Revenue.
Building & Zoning Permits
Building Permit – A building permit may be needed from the city or county building and planning department if there is any construction or renovations to a facility.
Signage Permit – Some municipalities require a permit before adding signage.
Employer Identification Number (EIN)
Many businesses will register with the Internal Revenue Service (IRS) for an EIN (also referred to as a FEIN, Federal Employer Identification Number, or Federal Tax ID Number). The EIN is the business equivalent of a Social Security Number for an individual. Corporations, Limited Liability Companies, Partnerships, and Sole Proprietorships with employees will all need to register for one. Sole Proprietorships without employees can use the owner’s Social Security Number.
There is no cost for an EIN, and it only takes a few minutes to get.
Business Tax Account
Most businesses will need to register with the Virginia Department of Taxation to receive a Virginia Tax Account Number. As a part of the registration process, businesses selling products at retail and/or offering certain services will register for a Sales Tax Certificate.
Sales Tax Certificate of Exemption
Businesses purchasing merchandise to resell will usually want to obtain a Virginia Sales Tax Certificate of Exemption (also called a Resale Certificate) to not pay sales tax for merchandise being resold to customers.
A variety of professions in the state are regulated and need to be registered before offering certain services. A few common professions that require licensing in Virginia include; home inspectors, landscapers, nail technicians, tattooists, and many more. Additional information, fees, and licensing requirements for professions are available from the Virginia Department of Professional and Occupational Regulation (DPOR).
The DPOR Board for Contractors licenses businesses that are engaged in the construction, removal, repair, or improvement of facilities on property owned by others.
Fictitious Trade Name Registration
While not a business license, it’s common for Sole Proprietorships and Partnerships operating under a name that is different from the full name of the owner(s) to register for a Fictitious Trade Name (also known as a Doing Business As or DBA) with the Clerk of the Circuit Court in each county or city where business is to be conducted.
These are just some of the most common business licenses a new business will need to register before starting. Before starting your business, be sure to check with City Hall, County Clerk, Chamber of Commerce, and/or Economic Developer in your area to get more information regarding business licensing.