Virginia Business License

Before you start operating in the Commonwealth of Virginia, one key step you will need to take is obtaining your business’s necessary licenses and/or permits.

Your Virginia licensing requirements will depend on a plethora of different factors, such as on your niche and business location.

This Virginia Business License article provides an overview of what you need to know to get your business up and running legitimately, including the key factors you will need to consider, the required steps you’ll need to take, and the associated fees which are involved.

Do I Need a Business License in Virginia

In Virginia, businesses are required to obtain various licenses and permits at the local, state, and federal levels. Here’s a general breakdown:

Type of Business

Below, we’ve detailed common ways in which your business type can dictate the licenses you’ll be required to obtain, as well as specific examples of these:

• Sales Tax Certificate of Registration: If you plan to start a business in Virginia or participate in activities that might require collecting sales tax, you will need to get a sales tax certificate of registration (also known as a seller’s permit) from the Virginia Department of Taxation
• Financial, Insurance, and Business Licenses: Depending on your niche, you may be required to obtain additional licensing that’s specific to your industry. If you plan to sell insurance, for example, you’ll need a license issued by the Virginia Bureau of Insurance. Similarly, if you want to open an accounting firm, you’ll need to obtain a Certified Public Accountant (CPA) license from the Virginia Board of Accountancy
• Professional and Occupational Licenses: Virginia also has licensing or certification requirements for certain professions. This means you may need a special license If you work in a specific field in Virginia. For example, barbershops and salons need a license from the Virginia Board for Barbers and Cosmetology
• Recreational, Environmental, and Safety Licenses: The Commonwealth of Virginia also requires special types of permits or certifications for certain activities or occupations. For example, an Alcoholic Beverage Control (ABC) retail license will let you sell alcohol in places like grocery or gas stations for take-home use. If your business will sell or use pesticides for jobs, it’ll need a pesticide license

However, this is not the only factor influencing the exact combination of licenses you’ll need — the location of your business within Virginia plays an important role as well.

Location

In this section, we’ve provided a succinct overview of the potential licenses and permits that your business may need due to local, state, and federal requirements:

• Local: Cities and counties in Virginia require all businesses to pay local taxes or obtain specific licenses and permits for activities like selling alcohol, tobacco, or food. You can contact your local government office or visit its website to find out what licenses and permits your business will need
• State: While there’s no statewide business license in Virginia, many businesses need a state sales tax certificate. In addition, some professions — like real estate brokers, engineers, or accountants — need a state license from the specific agency that oversees them
• Federal: Businesses involved in activities regulated by the federal government will need a federal license. Examples include businesses that sell firearms, businesses that import or export goods, and businesses that provide transportation services

Since the exact permits and licenses your business will need are entirely unique to your situation, you’ll have to conduct thorough research into your own local, state, and federal regulations to smoothly launch your business.

Alternatively, many entrepreneurs opt to leverage the expertise of third-party services to handle this on their behalf.

How to Get a Business License in Virginia

In order to get your business license(s) in Virginia, you will need to complete the following steps:

• Form Your Business
• Obtain an Employer Identification Number (EIN)
• Apply for the Required Licenses and Permits

Let’s take a look at each step in more detail below.

Step 1: Form Your Business

Before setting out to obtain a business license in Virginia, it’s pivotal that you first choose an appropriate structure for your business. Sole proprietorships, general partnerships, and corporations are all common choices, however it’s often seen as the most advantageous for small businesses in Virginia to register as a Limited Liability Company (LLC). Here are a few reasons for why:

• Limited Liability: Members are protected from personal liability for business debts, safeguarding personal assets
• Tax Benefits: LLCs typically enjoy a pass-through tax treatment, avoiding the double taxation that corporations are subjected to
• Management Flexibility: LLCs allow for flexibility in management structure, either being member-managed or manager-managed based on the preferences outlined in the certificate of formation
• Ease of Formation: With the Virginia Secretary of State providing forms that meet the minimum state law requirements and the option to file online, setting up an LLC is relatively straightforward

Many small business owners opt to avoid the tricky process of forming an LLC by instead leveraging the help of third-party LLC formation services.

Step 2: Obtain an EIN

The second step you’ll need to complete before applying for your business license is to obtain your EIN. This is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to businesses in the United States so that their financial transactions can be identified and tracked.

An EIN is often necessitated when applying for various permits and licenses as it allows local and state governments to ensure your business is operating within the confines of the law. You can obtain it in a number of ways:

• Online: You can apply for your EIN on the IRS’s official website by using the EIN Assistant. You should be granted your EIN shortly after completing this application
• By Fax/Mail: After completing Form SS-4, you can apply for an EIN by submitting it to the IRS via mail or fax
• By Phone: International applicants and businesses located outside US Territories are required to call the IRS at (267) 941-1099 to obtain their EIN — which they should receive during this call

Note: If you are a sole proprietor, you will be able to use your Social Security Number (SSN) instead (as long as you do not have employees).

Step 3: Apply for Licenses and Permits

After settling on the appropriate structure for your business and initiating the application for your EIN, the next step is to focus on securing the necessary licenses and permits to operate legally within your locale and industry.

• Local Licenses: Check with your local city or county office to find out what licenses or permits your business needs, as the requirements can differ from one place to another. For example, in Franklin County and Virginia Beach, you must complete an application and submit it to the Commissioner of the Revenue for assessing the sales license tax for your business
• Statewide Licenses: Depending on your business type, you might need specific state licenses. To apply for state business licenses, visit the Commonwealth of Virginia’s Licenses page or the Virginia Department of Professional and Occupational Regulation (DPOR) website (which covers various job licenses and requirements)
• Federal Licenses: While the federal government doesn’t mandate licenses for general business operations, if your business falls under any government-regulated category, such as agriculture, fishing, firearms, and alcohol sales, it may be required to obtain additional federal licenses or permits

Note: To access local government websites and representatives, we recommend having a look at Virginia’s Local Government Directory.

Step 4: Renewal of Licenses and Permits

Many businesses must renew their licenses every one or two years in order to keep them valid. 

For some localities, like Norfolk, business licenses remain valid from January 1 through December 31 of any given year and are renewed annually.

If you’re uncertain whether you need to renew any of your business’s licenses, make sure to reach out to the agency that issued your business license for clarification.

Alternatively, you can use a third-party service or a professional attorney for this process. This can be a good choice if you want to ensure that you avoid potential fines, as well as if you want to be as time-efficient as possible.

How Much is a Business License in Virginia

Any business that sells taxable goods or services in Virginia must obtain a sales tax certificate of registration. This certificate is free of charge.

The city or county in which your business is based also may require a local business license. In Lynchburg, for example, the fee for a license for business or personal services is $0.36 cents per $100 of gross receipts. The minimum cost for a business license is $30 In New Kent County while businesses in Prince George County must pay a $25 fee.

Certain types of business activities, such as selling alcohol, applying pesticides, or participating in horse racing, may require other special permits or licenses. The cost of these permits or licenses also depends on the activity and the agency that issues them. For example, an ABC retail license costs $65 to $1,000 while a pesticide applicator license costs $70.

Some professions and occupations need a state license or certification to operate legally. The cost of these licenses varies, depending on the profession and the agency that issues them. For example, a real estate broker license costs $170 while a CPA license costs $75.