A Virginia LLC’s tax filing requirements come from three different places: the State Corporation Commission charges a $50 annual registration fee, the Virginia Department of Taxation handles income and pass-through entity returns, and your local commissioner of the revenue collects business license and personal property taxes. On top of those, you may owe sales tax, employer withholding, and unemployment insurance depending on what your LLC actually does. The specific returns you file depend on how your LLC is structured and whether you have employees, customers paying sales tax, or operations in multiple localities.
What You File Depends on How Your LLC Is Taxed
Virginia follows the federal classification rules. A single-member LLC is a disregarded entity by default, so its income and expenses flow onto the owner’s personal Virginia return (Form 760). There is no separate Virginia entity return for a single-member LLC unless it has elected corporate treatment.1Internal Revenue Service. Limited Liability Company (LLC)
A multi-member LLC defaults to partnership treatment and must file Form 502, the Virginia Pass-Through Entity Return.2Virginia Tax. Form 502 Instructions – Virginia Pass-Through Entity Return of Income An LLC that has elected S corporation status with the IRS also files Form 502. Either type can elect corporate treatment with Form 8832, but most small LLCs stay with the default pass-through approach.
The $50 SCC Annual Registration Fee
Every Virginia LLC owes a $50 annual registration fee to the State Corporation Commission to keep its legal existence intact.3Virginia Code Commission. Virginia Code 13.1-1062 – Assessment of Annual Registration Fees The fee is due by the last day of your LLC’s anniversary month, meaning the month it was originally formed or registered to do business in Virginia. An LLC organized in July owes its fee every July 31.4Cornell Law Institute. 5 Va. Admin. Code 5-40-20 – Assessment of Limited Liability Companies
The SCC sends an assessment about two months before the due date, and payment goes through the Commission’s online system. A late payment triggers a $25 penalty.5State Corporation Commission. Annual Registration Fees If the fee remains unpaid on the last day of the third month after the due date, the LLC is automatically canceled by operation of law, with no court order or further notice required.6Virginia Code Commission. Virginia Limited Liability Company Act – Section 13.1-1050.2 Using the July example, the LLC would be canceled on October 31.
You can apply to reinstate a canceled LLC within five years, but it costs a $100 reinstatement fee plus every back fee and penalty that accrued. If another entity has taken your name in the meantime, you’ll have to amend to a new one.7Virginia Code Commission. Virginia Limited Liability Company Act – Section 13.1-1050.4 Paying $50 on time is dramatically cheaper than any reinstatement.
Form 502 Pass-Through Entity Return
Multi-member LLCs and those taxed as S corporations must file Form 502 for every year the LLC does business in Virginia or earns Virginia-source income.8Virginia Code Commission. Virginia Code Title 58.1 Chapter 3 Article 9 – Taxation of Partnerships The return is due the 15th day of the fourth month after your tax year closes. For calendar-year LLCs, that’s April 15. Virginia grants an automatic six-month extension with no application needed, moving the extended deadline to October 15. The extension covers the return, not any tax payment.
The filing package includes:
- Form 502 itself
- A Schedule VK-1 for each member showing their share of Virginia income, deductions, and credits
- Schedule 502ADJ if your LLC has Virginia-specific modifications
- Schedule 502A if applicable
- A complete copy of the federal return filed with the IRS2Virginia Tax. Form 502 Instructions – Virginia Pass-Through Entity Return of Income
If your LLC operates in more than one state, you’ll need to break out Virginia-source income on the return. Virginia source income includes income from property owned in the state, from operating a business in the state, or from intangible property used in a Virginia business.8Virginia Code Commission. Virginia Code Title 58.1 Chapter 3 Article 9 – Taxation of Partnerships
Virginia requires pass-through entities to file electronically. That includes the return, withholding payments, extension payments, and final payments.9Virginia Tax. Electronic Filing Requirements A waiver is available from the Tax Commissioner if electronic filing creates an unreasonable burden, but the baseline is online filing.
Estimated Payments and the Elective Entity-Level Tax
Starting with tax year 2023, Virginia requires pass-through entities to make estimated tax payments, usually quarterly.10Virginia Tax. Pass-Through Entities This applies whether your LLC elects the entity-level tax or files a composite return for nonresident members. For composite returns, the LLC uses Form 760ES under its own federal employer identification number rather than withholding from distributions.
Members also face their own quarterly estimated payment obligations on their personal Virginia returns. Virginia’s top individual rate is 5.75 percent on taxable income above $17,000.
For tax years beginning before January 1, 2027, a qualifying pass-through entity can elect to pay Virginia income tax at the entity level at a flat 5.75 percent rate.11Virginia Code Commission. Virginia Code Title 58.1 Chapter 3 Article 9 – Section 58.1-390.3 Each member then gets a refundable credit on their personal Virginia return for their share of the entity-level tax paid.12Virginia Tax. Elective Pass-Through Entity Tax Guidelines The practical benefit: the entity payment is generally federally deductible as a business expense, giving members a workaround for the $10,000 federal cap on state and local tax deductions. The election is made on a timely filed Form 502 (including extensions). An underpayment of more than 10 percent of the elective tax by the original due date brings an extension penalty of 2 percent per month, capped at 12 percent.
Sales and Use Tax
If your LLC sells tangible goods or certain taxable services in Virginia, you must register for a sales tax certificate with the Department of Taxation and collect tax on every qualifying sale. The state rate is 4.3 percent plus a mandatory local tax that brings the combined rate to at least 5.3 percent in most areas.13Virginia Code Commission. Virginia Code 58.1-603 – Imposition of Sales Tax Some regions add further local taxes that push the combined rate higher.
The Department assigns your filing frequency based on sales volume. Higher-volume sellers file monthly; lower-volume sellers file quarterly. Sales tax runs completely separately from income tax and requires its own records. Missing registration or remittance can produce assessments for the uncollected tax plus penalties and interest.
If You Have Employees
Hiring triggers two separate registrations.
Withholding Virginia Income Tax
Any LLC paying wages must register with the Department of Taxation to withhold Virginia income tax. Virginia’s withholding rules largely mirror the federal wage definition, so wages subject to federal withholding are generally subject to Virginia withholding too.14Virginia Department of Taxation. Employer’s Return of Virginia Income Tax Withheld
The Department assigns a quarterly, monthly, or semi-weekly filing frequency based on the amount you withhold. Quarterly and monthly filers use Form VA-5; semi-weekly filers use Form VA-16. Every employer, regardless of periodic frequency, files an annual summary on Form VA-6 along with electronic copies of all W-2s and 1099s.15Virginia Department of Taxation. Employer’s Annual or Final Summary of Virginia Income Tax Withheld Return The Department reviews each account annually and sends frequency change notices in December when needed.
Unemployment Insurance
You must register with the Virginia Employment Commission for unemployment insurance tax once you pay $1,500 or more in wages during any calendar quarter, or once you’ve had at least one employee for 20 or more weeks in a year.16Virginia Employment Commission. Employers Acquiring a business that was already liable transfers liability immediately. Returns and payments are quarterly. Rates range from 0.1 percent to 6.2 percent and are set each calendar year based on your experience; new employers receive an assigned rate within that range.
Local Taxes: BPOL and Business Personal Property
Virginia localities set their own business taxes, and two of them catch many LLC owners by surprise.
The Business, Professional, and Occupational License tax (BPOL) is a locally imposed license requirement authorized by state law.17Virginia Code Commission. Virginia Code 58.1-3700 – License Requirement Not every city, county, or town imposes BPOL, but most do. Rates, thresholds, and deadlines vary. You generally register with the local commissioner of the revenue or tax administration office within a set period after starting operations. Doing business without the required license is unlawful under state law, and localities can refuse to issue one if you owe delinquent local taxes of any kind.
The second is the tangible personal property tax. Localities tax business equipment such as furniture, computers, machinery, and vehicles based on assessed value. The tax applies even if the property is fully depreciated for federal purposes. Rates and deadlines differ by locality, so check with the commissioner of the revenue in each jurisdiction where your LLC operates.