Yes — if you run a business in Virginia, you almost certainly need a business license, but not from the state. Virginia has no single statewide business license. Instead, cities, counties, and towns issue their own local licenses, most commonly the Business, Professional, and Occupational License, known as the BPOL. On top of that, most businesses register their entity with the Virginia State Corporation Commission, and certain professions need a separate state-issued license before they can legally operate.
The short version: expect at least one license, often two or three overlapping registrations, and check your specific locality because rules and rates vary.
The Local Business License (BPOL)
The BPOL is the license most Virginia business owners are actually asking about. State law authorizes every city, county, and town to require one and to charge a license tax based on the business’s gross receipts.1Virginia Code Commission. Code of Virginia 58.1-3700 – License Requirement If your locality has adopted a BPOL ordinance, operating there without the license is unlawful.
In your first year, you provide an estimate of projected gross receipts. After that, you report the prior year’s actual receipts, and the locality calculates your tax from those figures. Tax rates and business classifications vary between jurisdictions, so two businesses doing identical work in neighboring counties can owe different amounts. The Commissioner of the Revenue’s office (or equivalent finance department) in your locality handles applications and can tell you the rate that applies to your business category.
Who Needs a BPOL
Almost any business physically operating in a locality with a BPOL ordinance needs one. That includes home-based businesses, not just storefronts. Loudoun County, for example, requires home-based businesses to register and report annually even when their gross receipts fall below the taxable threshold.2Loudoun County, VA – Official Website. Business License Tax
Out-of-state businesses can trigger a BPOL requirement too. Virginia defines a “definite place of business” as any location where you maintain a regular and continuous course of dealing for 30 or more consecutive days. That can be a leased office, a temporary seasonal location, or a remote employee’s home where business is regularly conducted.3Virginia Code Commission. Virginia Code 58.1-3700.1 – Definitions If your company is headquartered elsewhere but has people or operations inside a Virginia locality for 30-plus days, ask that locality whether you’re licensable.
Who Is Exempt
State law shields several categories of business from the BPOL tax regardless of local ordinance:
- Farm and nursery products sold by the grower outside the locality’s regular market houses.
- Manufacturers selling goods at wholesale from their place of manufacture, including certain defense production services at that location.
- Newspapers, magazines, newsletters, and other periodicals issued at least quarterly, along with radio and television broadcasters.
- Public service corporations and motor carriers registered with federal transportation authorities.
Localities cannot override these exemptions.4Virginia Code Commission. Code of Virginia 58.1-3703 – Counties Cities and Towns May Impose Local License Taxes and Fees Many jurisdictions add their own gross-receipts floor for small businesses. Fairfax County, for instance, charges no fee for businesses with gross receipts of $10,000 or less.5Fairfax County. Understanding Business, Professional and Occupational License Tax
Nonprofits may qualify for an exemption, but only for activities tied to their charitable purpose. A nonprofit’s unrelated commercial side activity is generally taxed like any other business. When in doubt, confirm with your local Commissioner of the Revenue.
Registering Your Entity with the State
Before the local license question comes up, most businesses have to register with the Virginia State Corporation Commission. If you’re forming an LLC, corporation, or limited partnership, you file your formation documents with the SCC. Sole proprietors don’t file formation documents, but if you plan to operate under any name other than your own legal name, you must file a Certificate of Assumed or Fictitious Name with the SCC’s Clerk’s Office.6King George County, VA. Fictitious Trade Names
SCC registration establishes your business as a legal entity in Virginia. It does not, on its own, permit you to operate in any given locality. That’s what the BPOL is for.7Virginia SCC. Start a New Business
State Professional and Occupational Licenses
The BPOL is a local tax license. It doesn’t certify that you’re qualified to do the work. For professions involving specialized training or public safety, Virginia requires a separate license through the Department of Professional and Occupational Regulation (DPOR). The list is long. It covers the fields you’d expect — contractors, real estate agents, cosmetologists, professional engineers — and less obvious ones like auctioneers, tattooists, home inspectors, and waste management facility operators.8Virginia Department of Professional and Occupational Regulation. Board for Professional and Occupational Regulation
You need the state professional license to legally offer your services. You need the local BPOL to lawfully run a business in the jurisdiction. Neither substitutes for the other.
State Tax Registration
Separate from your business license, Virginia requires tax registration through the Virginia Department of Taxation. The tax accounts most new businesses need include retail sales tax (if you sell taxable goods or services), use tax, and employer withholding (if you have Virginia employees). Once registered, you receive a Virginia Tax account number for each tax type and, where applicable, a sales tax certificate.9Virginia Department of Taxation. Register a Business in Virginia
If you plan to hire, you can register with the Virginia Employment Commission for unemployment tax at the same time.
How to Apply for the Local License
Apply through the Commissioner of the Revenue’s office (or equivalent) in the city or county where your business is physically located. Many localities have online portals; downloadable forms for mail-in or in-person filing are still common. Before you start, gather:
- Your legal business name and any assumed or fictitious name registered with the SCC.
- The physical business address, which the locality uses to confirm zoning compliance.
- Your business structure (sole proprietorship, LLC, corporation, partnership).
- Your Federal Employer Identification Number, or your Social Security Number if you’re a sole proprietor with no employees.
- A clear description of what your business does, used to classify you under the correct tax rate.
- A good-faith estimate of your first year’s gross receipts.
Contractors face an added requirement. Virginia bars localities from issuing or renewing a business license to any contractor who hasn’t obtained required workers’ compensation coverage. You must certify in writing that you are, and will remain, in compliance for the license term.10Virginia Code Commission. Virginia Code 58.1-3714 – Contractors Credits Against Tax
Zoning and Home-Based Businesses
A business license does not override zoning. If you’re leasing commercial space, you’ll generally need a certificate of occupancy from the local building or zoning office before the license is issued. Zoning approval confirms your intended use is allowed at that address.
Home-based businesses have their own layer. Virginia law generally prevents a property owners’ association from banning home-based businesses outright, but the association can set reasonable rules on hours, signage, and operations.11Virginia Code Commission. Virginia Code 55.1-1821 – Home-Based Businesses Permitted Your locality’s zoning ordinance likely also requires a home occupation permit, with common restrictions on non-resident employees, exterior signage, and customer traffic. Check with the local zoning office before assuming a home-based business is automatically allowed.
Penalties for Operating Without a License
Operating without a required local business license is unlawful in Virginia.1Virginia Code Commission. Code of Virginia 58.1-3700 – License Requirement BPOL renewals are typically due by March 1 each license year, though localities may set a deadline as late as May 1. Miss the deadline and the assessing official can impose a 10 percent penalty on the tax owed. If the tax remains unpaid more than 30 days after assessment, another 10 percent late-payment penalty can be added. Interest accrues from the original due date until the balance clears.12Virginia Code Commission. Virginia Code 58.1-3703.1 – Uniform Ordinance Provisions
There is a fairness safety valve. If the failure to file or pay genuinely wasn’t your fault and resulted from events beyond your control, penalties can be waived or abated. “I didn’t know I needed a license” rarely qualifies. Contact the Commissioner of the Revenue early, ask what applies to your situation, and file on time. Penalties compound quickly, and the cost of compliance is almost always lower than the cost of catching up.