As used in this section, “small business” means an independently owned and operated business that has been organized pursuant to Virginia law or maintains a principal place of business in Virginia and has 10 or fewer employees. Any penalties related to taxes administered by the Department shall be waived for a small business during its first two years of operation, provided that such small business enters into an agreement pursuant to § 58.1-1817. However, the Department shall not be required to waive the penalty imposed by § 58.1-1816 or any civil penalties for the failure to remit state sales or withholding taxes.