                                 CODE OF VIRGINIA

COUNTIES, CITIES AND TOWNS MAY IMPOSE LOCAL LICENSE TAXES AND FEES; LIMITATION
OF AUTHORITY (§ 58.1-3703)

A. The governing body of any county, city or town may charge a fee for issuing a
license in an amount not to exceed $100 for any locality with a population
greater than 50,000, $50 for any locality with a population of 25,000 but no
more than 50,000 and $30 for any locality with a population smaller than 25,000.
For purposes of this section, population may be based on the most current final
population estimates of the Weldon Cooper Center for Public Service of the
University of Virginia. Such governing body may levy and provide for the
assessment and collection of county, city or town license taxes on businesses,
trades, professions, occupations and callings and upon the persons, firms and
corporations engaged therein within the county, city or town subject to the
limitations in (i) subsection C and (ii) subsection A of &#xA7; 58.1-3706,
provided such tax shall not be assessed and collected on any amount of gross
receipts of each business upon which a license fee is charged. Any county, city
or town with a population greater than 50,000 shall reduce the fee to an amount
not to exceed $50 by January 1, 2000. The ordinance imposing such license fees
and levying such license taxes shall include the provisions of &#xA7;
58.1-3703.1.

B. Any county, city or town by ordinance may exempt in whole or in part from the
license tax (i) the design, development or other creation of computer software
for lease, sale or license and (ii) private businesses and industries entering
into agreements for the establishment, installation, renovation, remodeling, or
construction of satellite classrooms for grades kindergarten through three on a
site owned by the business or industry and leased to the school board at no
costs pursuant to &#xA7; 22.1-26.1.

C. No county, city, or town shall impose a license fee or levy any license tax:

   1. On any public service corporation or any motor carrier, common carrier, or
   other carrier of passengers or property formerly certified by the Interstate
   Commerce Commission or presently registered for insurance purposes with the
   Surface Transportation Board of the United States Department of
   Transportation, Federal Highway Administration, except as provided in &#xA7;
   58.1-3731 or as permitted by other provisions of law;

   2. For selling farm or domestic products or nursery products, ornamental or
   otherwise, or for the planting of nursery products, as an incident to the sale
   thereof, outside of the regular market houses and sheds of such county, city
   or town, provided such products are grown or produced by the person offering
   them for sale;

   3. Upon the privilege or right of printing or publishing any newspaper,
   magazine, newsletter or other publication issued daily or regularly at average
   intervals not exceeding three months, provided the publication&#8217;s
   subscription sales are exempt from state sales tax, or for the privilege or
   right of operating or conducting any radio or television broadcasting station
   or service;

   4. On a manufacturer for the privilege of manufacturing and selling goods,
   wares and merchandise at wholesale at the place of manufacture. For purposes
   of this subdivision, this shall include a manufacturer that is also a defense
   production business selling manufacturing, rebuilding, repair, and maintenance
   services at the place of manufacture (i) to the United States or (ii) for
   which consent of the United States is required;

   5. On a person engaged in the business of severing minerals from the earth for
   the privilege of selling the severed mineral at wholesale at the place of
   severance, except as provided in &#xA7;&#xA7; 58.1-3712 and 58.1-3713;

   6. Upon a wholesaler for the privilege of selling goods, wares and merchandise
   to other persons for resale unless such wholesaler has a definite place of
   business or store in such county, city or town. This subdivision shall not be
   construed as prohibiting any county, city or town from imposing a local
   license tax on a peddler at wholesale pursuant to &#xA7; 58.1-3718;

   7. Upon any person, firm or corporation for engaging in the business of
   renting, as the owner of such property, real property other than hotels,
   motels, motor lodges, auto courts, tourist courts, travel trailer parks,
   campgrounds, bed and breakfast establishments, lodging houses, rooming houses,
   and boardinghouses; however, any county, city or town imposing such a license
   tax on January 1, 1974, shall not be precluded from the levy of such tax by
   the provisions of this subdivision;

   8. [Repealed.]

   9. On or measured by receipts for management, accounting, or administrative
   services provided on a group basis under a nonprofit cost-sharing agreement by
   a corporation which is an agricultural cooperative association under the
   provisions of Article 2 (&#xA7; 13.1-312 et seq.) of Chapter 3 of Title 13.1,
   or a member or subsidiary or affiliated association thereof, to other members
   of the same group. This exemption shall not exempt any such corporation from
   such license or other tax measured by receipts from outside the group;

   10. On or measured by receipts or purchases by an entity which is a member of
   an affiliated group of entities from other members of the same affiliated
   group. This exclusion shall not exempt affiliated entities from such license
   or other tax measured by receipts or purchases from outside the affiliated
   group. This exclusion also shall not preclude a locality from levying a
   wholesale merchant&#8217;s license tax on an affiliated entity on those sales
   by the affiliated entity to a nonaffiliated entity, notwithstanding the fact
   that the wholesale merchant&#8217;s license tax would be based upon purchases
   from an affiliated entity. Such tax shall be based on the purchase price of
   the goods sold to the nonaffiliated entity. As used in this subdivision, the
   term &#8220;sales by the affiliated entity to a nonaffiliated entity&#8221;
   means sales by the affiliated entity to a nonaffiliated entity where goods
   sold by the affiliated entity or its agent are manufactured or stored in the
   Commonwealth prior to their delivery to the nonaffiliated entity;

   11. On any insurance company subject to taxation under Chapter 25 (&#xA7;
   58.1-2500 et seq.) or any agent of such company;

   12. On any bank or trust company subject to taxation in Chapter 12 (&#xA7;
   58.1-1200 et seq.) or any director of such company;

   13. Upon a taxicab driver, if the locality has imposed a license tax upon the
   taxicab company for which the taxicab driver operates;

   14. On any blind person operating a vending stand or other business enterprise
   under the jurisdiction of the Department for the Blind and Vision Impaired, or
   a nominee of the Department, as set forth in &#xA7; 51.5-98;

   15. [Expired.]

   16. [Repealed.]

   17. On an accredited religious practitioner in the practice of the religious
   tenets of any church or religious denomination. &#8220;Accredited religious
   practitioner&#8221; shall be defined as one who is engaged solely in praying
   for others upon accreditation by such church or religious denomination;

   18. a. On or measured by receipts of a nonprofit organization described in
   Internal Revenue Code &#xA7; 501(c)(3) or 501(c)(19) except to the extent the
   organization has receipts from an unrelated trade or business the income of
   which is taxable under Internal Revenue Code &#xA7; 511 et seq. For the
   purpose of this subdivision, &#8220;nonprofit organization&#8221; means an
   organization that is described in Internal Revenue Code &#xA7; 501(c)(3) or
   501(c)(19), and to which contributions are deductible by the contributor under
   Internal Revenue Code &#xA7; 170, except that educational institutions exempt
   from federal income tax under Internal Revenue Code &#xA7; 501(c)(3) shall be
   limited to schools, colleges, and other similar institutions of learning.
   				b. On or measured by gifts, contributions, and membership dues of a
   nonprofit organization. Activities conducted for consideration that are
   similar to activities conducted for consideration by for-profit businesses
   shall be presumed to be activities that are part of a business subject to
   licensure. For the purpose of this subdivision, &#8220;nonprofit
   organization&#8221; means an organization exempt from federal income tax under
   Internal Revenue Code &#xA7; 501 other than the nonprofit organizations
   described in subdivision a;

   19. On any venture capital fund or other investment fund, except commissions
   and fees of such funds. Gross receipts from the sale and rental of real estate
   and buildings remain taxable by the locality in which the real estate is
   located provided the locality is otherwise authorized to tax such businesses
   and rental of real estate;

   20. On total assessments paid by condominium unit owners for common expenses.
   &#8220;Common expenses&#8221; and &#8220;unit owner&#8221; have the same
   meanings as in &#xA7; 55.1-1900; or

   21. On or measured by receipts of a qualifying transportation facility
   directly or indirectly owned or title to which is held by the Commonwealth or
   any political subdivision thereof or by the United States as described in
   &#xA7; 58.1-3606.1 and developed and/or operated pursuant to a concession
   under the Public-Private Transportation Act of 1995 (&#xA7; 33.2-1800 et seq.)
   or similar federal law.

D. Any county, city or town may establish by ordinance a business license
incentive program for &#8220;qualifying businesses.&#8221; For purposes of this
subsection, a &#8220;qualifying business&#8221; is a business that locates for
the first time in the locality adopting such ordinance. A business shall not be
deemed to locate in such locality for the first time based on merger,
acquisition, similar business combination, name change, or a change in business
form. Any incentive established pursuant to this subsection may extend for a
period not to exceed two years from the date the business locates in such
locality. The business license incentive program may include (i) an exemption,
in whole or in part, of license taxes for any qualifying business; (ii) a refund
or rebate, in whole or in part, of license taxes paid by a qualifying business;
or (iii) other relief from license taxes for a qualifying business not
prohibited by state or federal law.

E. For taxable years beginning on or after January 1, 2012, any locality may
exempt, by ordinance, license fees or license taxes on any business that does
not have an after-tax profit for the taxable year and offers the income tax
return of the business as proof to the local commissioner of the revenue.
Eligibility for this exemption shall be determined annually and it shall be the
obligation of the business owner to submit the applicable income tax return to
the local commissioner of the revenue.

HISTORY: Code 1950, § 58-266.1; 1950, p. 155; 1956, c. 242; 1964, c. 424; 1968,
c. 619; 1970, cc. 231, 547; 1974, cc. 196, 438; 1975, cc. 23, 621; 1976, cc.
521, 719; 1977, c. 320; 1978, cc. 772, 799, 817; 1979, cc. 565, 568, 570; 1980,
cc. 318, 736; 1981, cc. 419, 636; 1982, cc. 348, 548, 552, 554, 558, 633; 1983,
c. 554; 1984, cc. 247, 675, 695; 1985, c. 531; 1987, cc. 617, 618, 715; 1988,
cc. 480, 499; 1989, c. 314; 1991, cc. 540, 572; 1993, cc. 65, 326, 918; 1996,
cc. 715, 720; 1997, cc. 62, 283, 903; 2000, c. 557; 2002, cc. 28, 717; 2005, c.
103; 2006, c. 922; 2010, c. 648; 2011, cc. 25, 188; 2016, c. 487; 2017, cc. 111,
430; 2022, cc. 659, 660.