General
Information • Who Must Pay The Tax
• Filing Procedure for New Businesses
Computation of Tax for New Businesses
• Renewing the Annually Issued License
How the Tax is Collected • Penalty
for Failure to Pay Tax
Business License Tax Rate Schedule
• Eligibility for a Tax Refund
Business Records and Reports Subject to
Audit
• Further Information
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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.
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.)
Filing
Procedure for New Businesses
Obtaining
a business license in Alexandria is generally a three-step
process:
Step
1: Register 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 13.1-780.
For information on registration or incorporation,
please contact:
Virginia
State Corporation Commission
P.O. Box 1197
Richmond, VA 23209
800-522-7945 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. A small fee is
imposed by the Circuit Court. For registration information,
contact:
Clerk
of the Circuit Court
520 King Street, Suite 307
Alexandria, Virginia 22314
703-838-4044
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Step
2: Obtain zoning approval.
All businesses in Alexandria must obtain zoning approval
before conducting business. Applications for zoning
approval can be obtained at the Business Tax Branch.
Please submit the completed application to the Zoning
Division of the City's Planning and Zoning Department.
For information regarding zoning issues, contact:
Planning
& Zoning Department
Zoning Division
301 King Street, City Hall
703-838-4688
After obtaining zoning approval, the new applicant should
return to the Business Tax Branch to apply for a business
license. (See "Computation of Tax for New Businesses"
below.) Upon receipt of the license, the new business
must ensure that the building/dwelling from which the
business is to be conducted complies with City Code
regulations.
Step
3: Comply with City Building/Dwelling Code regulations.
(a) Obtain a Certificate
of Occupancy
The new business should request a Certificate of Occupancy
from the Code Enforcement
Bureau of the Fire Department which inspects the
proposed use of the building or dwelling. For information,
contact:
Fire
Department
Code Enforcement Bureau
301 King Street, City Hall, Room 4200
Alexandria, Virginia 22314
703-838-4360
(b) Obtain a Hazardous Use Permit (if applicable)
Certain businesses must obtain a hazardous use permit
which must be kept on the premises inspected by
the Code Enforcement Bureau. Application for the
permit is also made at the Fire Department at the
above address.
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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. The estimated
license tax is adjusted at the end of the tax year to
reflect the business' actual gross receipts. If the taxpayer
overestimates, he/she is given a credit on the license
tax payable in the following year. If the taxpayer underestimated,
the amount underestimated is added to the license tax
for the succeeding year. The minimum annual license tax
is $50. For a detailed explanation of this tax, see
How
Business Tax is Calculated.
Renewing
the Annually Issued License
Businesses,
professions and occupations must file a license renewal
application and pay the 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.
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How
the Tax is Collected
License
renewal applications and taxes are due by March 1 of each
license tax year. Businesses that begin after January
1 must file the application and pay taxes immediately.
The business license tax application and tax payment should
be mailed to:
Business
Tax Branch
Department of Finance
City of Alexandria
Dept. 715
Alexandria, VA 22334-0715
703.838.4680
If
you do not receive a business license renewal form, please
contact the Business Tax Branch. You are 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 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.
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BUSINESS
LICENSE TAX RATE SCHEDULE
| SECTION |
TITLE
OF SECTION |
TAX
RATE |
| 9-1-71
|
Professional
services |
.58
per $100/minimum tax $50 |
| 9-1-72 |
Repair,
personal and business services |
.35
per $100/minimum tax $50 |
| 9-1-75 |
Retail
merchants |
.20
per $100/minimum tax $50 |
| 9-1-77 |
Retail
and wholesale merchants |
.20
per $100/minimum tax $50 |
| 9-1-78 |
Wholesale
merchants based on gross purchases |
.5
per $100/minimum tax $50 |
| 9-1-79
|
Contractors
and contracting |
.16
per $100/minimum tax $50 |
| 9-1-82 |
Amusements
and entertainments |
.36
per $100/minimum tax $50 |
| 9-1-84 |
Public
utilities
Telephone
Telegraph
Water, heat, light and power |
$1.03 per $100
2% of gross receipts
One-half of 1% of gross receipts |
| 9-1-87 |
Soliciting agents |
.20
per $100/minimum tax $50 |
| 9-1-88 |
Renting of residential property
Renting of commercial property |
.50 per $100/minimum tax $50
.35 per $100/minimum tax $50 |
| 9-1-102
|
Builders and developers |
.16
per $100/minimum tax $50 |
| 9-1-116
|
Distress
merchandise sale |
.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
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.
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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.
Gross
receipts include total receipts from any business, profession,
trade, occupation, vocation, calling, activity, including
cash, credits, fees, commissions, brokerage charges and
rentals, and property of any kind, nature or description,
from either sales made or services rendered. 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.
Gross
receipts include the total receipts from all sales made
from a place of business within the City, both to persons
within the City and to persons outside the City.
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Eligibility
for a Tax Refund
Any
business which 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.
The refund will be prorated on a monthly basis to make
certain that the license privilege covers only the portion
of the year for which the business was operating.
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.
Further
Information
Tax
forms and taxpayer assistance:
Business
Tax Branch
301 King Street, City Hall
Alexandria, VA 22314
703-838-4680
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