Business Taxes

A complete description of taxes is available for download (.pdf file). The FCEDA publication Doing Business in Fairfax County has a comprehensive description of business taxes in the county. The Quick Reference Guide is also helpful. For further information, contact the Virginia Department of Taxation or the Fairfax County Department of Tax Administration.

Virginia Business Taxes

Corporate Income Tax — The Virginia corporate income tax rate is 6 percent of taxable corporate income. For most corporations, taxable income is determined by a three-part formula based on sales, payroll and property factors

Sales and Use Tax — The sales and use tax is levied on retail sales or leases of equipment, furniture and supplies. The state tax rate is 5 percent and the local tax rate is an additional 1 percent. The combined 6 percent tax is collected at the point of sale.

Annual Corporate Registration Fee — All corporations authorized to transact business in Virginia must pay an annual registration fee. The fee ranges from $100 to $1,700, depending on how many shares the corporation has. Non-stock corporations organized after 1970 pay $25. Contact the Virginia State Corporation Commission at 800-552-7945 for more information.

Withholding Tax—If federal law requires an employer to hold tax from any payment, Virginia also requires withholding. If required to file withholding returns, an employer must register for withholding tax, file income tax withholding returns and pay the income tax to the Virginia Department of Taxation. Employers are responsible for timely payment and filing of their incurred withholding liability.

Workers' Compensation Insurance — Employers with three or more employees regularly in service in the same business in Virginia must purchase and maintain workers' compensation insurance with a private insurance carrier, have a certificate of self-insurance issued by the Virginia Workers' Compensation Commission, or be a member of a licensed group self-insurance association. Contact the Virginia Workers' Compensation Commission at 877-664-2566 for more information.

Unemployment Insurance Tax — Employers must pay unemployment insurance tax if they employ one or more persons for 20 or more weeks during a calendar year, or if they wages of $1,500 or more during any calendar quarter. For most businesses the unemployment insurance tax rates range from 0.1 percent to 6.2 percent of the first $8,000 that each employee earns each year. Contact the Virginia Employment Commission at 703-803-0000 for more information.

Miscellaneous Business Taxes — Contact the Virginia Department of Taxation regarding the following taxes: aircraft and watercraft sales and use tax, forest products tax, litter tax, miscellaneous commodities tax, soft drink excise tax and tire tax.

Fairfax County Business Taxes

Business, Professional and Occupational License (BPOL) Tax — All business (including home-based enterprise and self-employed individuals) that are located or operating in Fairfax County and that have gross annual receipts greater than $10,000 are assessed a Business, Professional and Occupational License (BPOL) tax. The tax rate or fee depends on the amount of gross receipts and type of business.

Sales and Use Tax — The 1 percent local sales and use tax is collected along with the 5 percent state tax at the point of sale.

Real Property Tax — Real property in Fairfax County is assessed at 100 percent of its estimated fair market value as of January 1 of each year. The commercial real property tax rate is $1.255 per $100 of assessed value.

Business Personal Property Tax — All business in Fairfax County must pay personal property taxes on tangible business personal property and company-owned vehicles. The personal property tax is $4.57 per $100 of assessed value. Assessed values vary for different types of property. Some areas of Fairfax County are assessed additional real property taxes to pay for town services or transportation improvements. These areas include the towns of Vienna and Herndon, commercial and industrial property owners in the Route 28 Transportation District and commercial land owners in the Dulles corridor.