Virginia prides itself on being a low-tax state. Companies in Virginia pay 43% less than the national average in worker's compensation and 66% less than the national average in unemployment taxes.
The following is a summary of the taxes to which most businesses located within the Town of Leesburg are subject:
State Income Tax
Any corporation having income from Virginia sources is required to file and report that income annually. The income tax rate is 6% of computed Virginia taxable income.
Business, Professional & Occupational License Tax (BPOL)
Most businesses, including home based businesses, are subject to a gross receipts tax. The tax rate depends upon the type of business, but ranges from 0.10% to 0.25%. The BPOL Fact Sheet contains detailed information. For a business license application, please visit the Town Finance Department’s Business Licenses page.
Real Property Tax
Businesses located within the Town of Leesburg pay real property taxes to Loudoun County and the Town, however, they receive a single bill from Loudoun County reflecting both tax bills. Real estate taxes are billed twice a year, with the first half due on June 5th and the second half due on December 5th. Real property tax rates for 2018 are listed below. Rates are per $100 of assessed fair market value. New tax rates are set in April of each year.
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Tangible Personal Property Tax
The tax on tangible personal property (manufacturing equipment and tools, office equipment, computers, etc.) is based on the original total capitalized cost and the age of the property. Property is taxed at 50% of cost the first year and is reduced 10% each year thereafter until a minimum of 10% is reached. 2019 tax rates (per $100 of valuation) are listed below. This year's due date for business tangible personal property taxes is May 6, 2019.
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Bank Franchise Tax
Banks located within the Town pay a franchise tax of $0.80 per $100 of net capital.
Manufacturers' inventory is not subject to taxation in Virginia. Neither the Town of Leesburg nor Loudoun County impose a capital tax on merchants.
Consumer TaxesIn addition to the above taxes, businesses in Leesburg may either pay or collect the following consumer taxes. Consumer taxes are paid at the time of purchase and are remitted by the business to the Town or County on behalf of the consumer.
The combined state and local sales tax rate in Leesburg and other Northern Virginia localities is 6% (4% state, 1% Northern Virginia Transportation Authority and 1% local), except on food items purchased for home consumption. The local sales tax is collected by Loudoun County and a portion is distributed to the Town of Leesburg. The combined sales tax rate on food items purchased for home consumption is 2.5%.
Meals & Beverage Tax
The meals and beverage tax rate is 3.5% on sales of prepared meals and drinks served or sold within the Town.
The hotel tax rate (also known as the Transient Occupancy Tax or TOT) is 6% on the total amount paid for transient lodging within the Town.
Commercial and industrial customers pay a telecommunications tax of 16% on the first $300 of net monthly charges.
Electrical and natural gas service purchased within the Town is subject to a consumers’ utility tax. For commercial and industrial customers, the total tax for each utility is capped at $48 per month.
Additional Tax Information
More information is available here: