The Richmond Market Just Became More Attractive

BPOL tax exemption aims to support small businesses

The city of Richmond has doubled its Business, Professional and Occupational License (BPOL) tax exemption from $250,000 to $500,000 in gross receipts. As a result, nearly 70% of local businesses now qualify for this exemption¹. The new threshold aims to ease the tax burden on small businesses and attract new or relocating organizations to Richmond.

Understanding the BPOL tax

Many Virginia localities charge a fee or tax for operating a business within their jurisdiction. This tax, known as the BPOL tax, applies to most entities and individuals engaged in business, trade, or professional activities from a “definite place of business,” which could range from a formal office or store to a self-employed person’s home. The BPOL tax rates vary based on the business classification, with gross revenue typically determining the amount owed.  There are state laws that can limit BPOL, but localities can have additional laws and administer the tax.  Some businesses who operate in more than one locality may be subject to BPOL taxes in each of those localities and can allocate sales, depending on the nature and location of the operations being performed.

Recent BPOL updates in Richmond and surrounding area

Multiple counties in the Greater Richmond area have made changes to the BPOL threshold in recent years to strengthen their competitiveness in this market.

City of Richmond

Businesses in Richmond earning less than $500,000 in gross revenue annually are exempt from the BPOL tax, paying a flat $30 license fee. Each organization will be exempt from this tax on its first $500,000 in receipts. Any gross earnings above this threshold may be subject to a tax rate of up to 58 cents per $100 earned.

Henrico County

As of the 2025 fiscal year, Henrico County significantly increased their BPOL exemption to $1 million in gross receipts, allowing 1,300 businesses to take advantage of this incentive. In most cases, when the gross receipts amount to $1,000,000 or more the tax rate is 20 cents per $100 of gross receipts or 15 cents per $100 for contractors.

Chesterfield County

Any Chesterfield County business with $10,000 to $500,000 in gross receipts (or purchases for wholesalers) must pay an annual license fee. No tax is charged if receipts are under $500,000, and the first $500,000 is deducted when calculating the BPOL tax.

Hanover County

BPOL taxes are assessed on certain types of businesses operating in Hanover County, including:

• Contractors
• Electric contractors
• Plumbers
• Steam fitters

A tax is assessed on these businesses when gross receipts exceed $100,000 from the prior year. The applicable tax rate is 10 cents for every $100 of gross receipts.

Powhatan County

Powhatan County does not tax businesses based on gross receipts. Instead, most businesses are subject to an annual license fee of $50.

New and existing businesses should review their local regulations annually to ensure the latest license and tax requirements are being met. Your Keiter Opportunity Advisors stay current with the latest information about BPOL and other state and local tax requirements. Contact your client service team for questions specific to your business.

Source:

1 Richmond BizSense