Complete Guide to Virginia LLC Taxes in 2025
Virginia is a popular state for LLC formation, particularly for businesses in the Washington D.C. metropolitan area and the thriving Hampton Roads and Richmond corridors. The Old Dominion State imposes graduated income tax rates from 2% to 5.75%, a $50 annual registration fee, and no entity-level tax on LLCs. With a top rate that kicks in at just $17,001 of taxable income, Virginia effectively operates as a near-flat-tax state for most LLC owners. This comprehensive guide covers every aspect of Virginia LLC taxation for 2025.
How Virginia Taxes LLCs
Virginia treats LLCs as pass-through entities. The LLC itself does not pay Virginia income tax. Instead, profits and losses pass through to members, who report their share on Virginia Form 760 (Individual Income Tax Return).
For single-member LLCs, income flows through Schedule C to the federal return and then to Form 760. For multi-member LLCs, the LLC files Virginia Form 502 (Pass-Through Entity Return) as an informational filing, and each member receives a Virginia Schedule VK-1.
Virginia does not impose a separate franchise tax, entity-level tax, or gross receipts tax on LLCs. This keeps compliance costs low and makes Virginia competitive with neighboring states like Maryland and North Carolina.
Key Point: Virginia's top 5.75% rate applies to all taxable income above just $17,001. This means the vast majority of LLC owners with meaningful income effectively pay 5.75% on nearly all their income. The lower brackets are narrow and provide minimal benefit.
Virginia Income Tax Brackets for 2025
| Taxable Income | Tax Rate | Tax on Bracket |
|---|---|---|
| $0 - $3,000 | 2% | $60 max |
| $3,001 - $5,000 | 3% | $60 max |
| $5,001 - $17,000 | 5% | $600 max |
| Over $17,000 | 5.75% | No cap |
Virginia LLC Annual Registration Fee
All Virginia LLCs must pay an annual registration fee of $50 to the Virginia State Corporation Commission (SCC). This fee is due by the last day of the month in which the LLC was organized. The fee applies regardless of whether the LLC is active or inactive, and failure to pay can result in automatic cancellation of the LLC.
Virginia Tax Summary
| Tax Component | Rate / Amount | Notes |
|---|---|---|
| Income Tax | 2-5.75% | 5.75% above $17,000 |
| Annual Registration | $50 | Due formation anniversary month |
| State Sales Tax | 5.3% (general) | 4.3% state + 1% local; higher in some regions |
| Federal SE Tax | 15.3% | On 92.35% of net earnings |
| Entity-Level Tax | None | No franchise or privilege tax |
Federal Taxes for Virginia LLC Owners
- Self-Employment Tax (15.3%): 12.4% Social Security (up to $176,100) plus 2.9% Medicare on all earnings. Additional 0.9% Medicare surtax above $200,000 (single).
- Federal Income Tax (10%-37%): Taxed at applicable marginal rates.
- QBI Deduction: Up to 20% deduction on qualified business income.
Tax Tip: Virginia LLC owners earning over $50,000-$60,000 should evaluate S-Corporation election for SE tax savings. Virginia does not impose an additional tax on S-Corps beyond the normal individual income tax, making the S-Corp election clean and straightforward. Use our S-Corp Tax Calculator to compare.
Virginia Sales Tax for LLCs
Virginia has a general sales tax rate of 5.3% (4.3% state + 1% local) in most areas. Northern Virginia jurisdictions (including Fairfax, Arlington, and Loudoun counties) have a higher rate of 6% due to additional regional transportation taxes. Hampton Roads also has a higher rate of 6% for similar reasons.
Food purchased for home consumption is taxed at a reduced 2.5% rate. Digital goods and SaaS are generally not taxable in Virginia, though this area of law is evolving.
Pass-Through Entity Tax (PTET) in Virginia
Virginia enacted an elective Pass-Through Entity Tax (PTET) starting in 2021. Qualifying pass-through entities, including LLCs, can elect to pay Virginia income tax at the entity level at the top rate of 5.75%. Members receive a credit on their individual returns, effectively converting the state tax payment into a federal business deduction that bypasses the $10,000 SALT cap.
The election is made annually on Virginia Form 502PTET. The entity must make estimated payments during the tax year. This can produce significant federal tax savings for LLC owners whose total state and local tax deductions would otherwise exceed $10,000.
Virginia LLC Filing Deadlines
| Filing Type | Deadline | Extension |
|---|---|---|
| Single-Member LLC (Form 760) | May 1 | Yes, to November 1 |
| Multi-Member LLC (Form 502) | March 15 | Yes, to September 15 |
| Annual Registration Fee | Formation anniversary month | No extension |
| Estimated Payments | May 1, Jun 15, Sep 15, Jan 15 | No |
Note that Virginia's individual tax return deadline is May 1, not April 15 like most states. This gives Virginia LLC owners an extra two weeks compared to the federal deadline.
Estimated Tax Payments in Virginia
Virginia requires estimated tax payments if you expect to owe $150 or more in state income tax after credits and withholding. This is one of the lowest thresholds in the nation, meaning nearly all LLC owners with meaningful income must make quarterly payments. Use Virginia Form 760-ES for estimated payments.
Virginia LLC Formation Costs
- Articles of Organization: $100 filing fee with the Virginia SCC
- Registered Agent: Required; can be a member or commercial agent ($50-$150/year)
- Annual Registration Fee: $50/year (ongoing)
- EIN: Free from the IRS
- Operating Agreement: Not required but recommended ($0-$500)
Virginia vs. Neighboring States for LLC Taxes
| State | Income Tax Rate | Annual Fee | Entity Tax |
|---|---|---|---|
| Virginia | 2-5.75% | $50 | None |
| Maryland | 2-5.75% + county | $300 | None |
| Washington D.C. | 4-10.75% | $300 biennial | UB tax 9.975% |
| North Carolina | 4.5% flat | $200 | None |
| West Virginia | 2.36-5.12% | $25 | None |
| Tennessee | None (0%) | $300 min | 6.5% excise tax |
Common Virginia LLC Tax Mistakes
- Missing the annual $50 registration fee: Virginia automatically cancels LLCs that fail to pay. Reinstatement costs $100+.
- Using April 15 as the filing deadline: Virginia's individual return is due May 1, not April 15. Conversely, don't assume the May 1 deadline gives you extra time for federal returns.
- Not making estimated payments: Virginia's $150 threshold means nearly all LLC owners must pay quarterly.
- Missing the PTET election: High-income LLC owners lose federal deduction value by not electing PTET.
- Not evaluating S-Corp election: SE tax savings can be substantial in Virginia.
- Ignoring local BPOL tax: Many Virginia localities impose a Business Professional and Occupational License (BPOL) tax on gross receipts, ranging from $0.05 to $0.58 per $100.
Virginia Local Business Taxes (BPOL)
Many Virginia cities and counties impose a Business, Professional and Occupational License (BPOL) tax on businesses operating within their jurisdiction. This is a gross receipts tax with rates typically ranging from $0.05 to $0.58 per $100 of gross receipts, depending on the business category and locality. Some localities exempt businesses with gross receipts below a certain threshold (commonly $100,000-$200,000).
Additionally, Virginia localities may impose a business tangible personal property tax on equipment, machinery, furniture, and other business assets. Rates vary by jurisdiction but typically range from $1 to $5 per $100 of assessed value.
Dissolving a Virginia LLC
To close a Virginia LLC, file Articles of Cancellation with the Virginia SCC ($25 filing fee). File final federal and Virginia tax returns, settle all debts, and distribute remaining assets. You should also cancel any local business licenses and close sales tax accounts with the Virginia Department of Taxation.