What is the BPOL tax in Fairfax County and do I have to pay it?
BPOL stands for Business, Professional and Occupational License. It’s a local tax that Fairfax County charges to businesses operating within the county. If you’re generating revenue in Fairfax County, you most likely need to register and pay it.
The tax is based on your gross receipts, not your net income. That distinction is important because you can’t reduce your BPOL obligation by deducting expenses. The county is looking at total revenue coming in the door, regardless of how much you spent to earn it.
The thresholds determine what you owe. If your annual gross receipts are under $10,000, you don’t need a license and you don’t owe anything. Between $10,000 and $100,000, you pay a flat fee for your license. Over $100,000, the tax is calculated as a rate applied to your gross receipts. That rate varies depending on your business classification. Retail businesses, professional services, contractors, and other categories each have different rates, so what you pay depends on what kind of work you do.
One thing that catches people off guard is that home-based businesses are not exempt. If you’re running a consulting practice or freelance operation from your house in Fairfax County and your gross receipts exceed $10,000, you still need to register and pay. The county doesn’t care whether you have a storefront or a spare bedroom office.
You’re required to register within 75 days of starting your business. If you’ve been operating without registering, take care of it as soon as possible. Filing and payment are due March 1 each year, which is a different deadline from your federal and state tax returns. Missing it means penalties and interest you don’t need to be paying.
Because BPOL is based on gross receipts, your books need to accurately reflect your total revenue. Working with bookkeepers in Fairfax who understand local requirements helps make sure your BPOL filing is straightforward and your numbers are right. Your full-service bookkeeping should produce reports that make it easy to pull your gross receipts figure when March rolls around, rather than scrambling to piece it together from bank statements.
If you’re unsure which rate applies to your business or whether certain revenue sources count toward your gross receipts, the Fairfax County Department of Tax Administration can clarify your classification. Getting it right from the start is a lot easier than correcting it later.
Northern Virginia's Bookkeeping & Advisory Firm
First Step:
Tell Us About Your Business
Every engagement starts with a conversation. Tell us what's going on with your books and we'll give you our honest assessment.
More Questions
How do contractors handle change orders in their books?
Approved change orders increase the total contract value and should be updated in the WIP schedule immediately. Unapproved change orders are riskier and need to be booked as unbilled receivables with a reserve if collection is uncertain.
Read answerWhat payroll considerations are unique to nonprofits?
Nonprofits still owe most federal payroll taxes, but 501(c)(3) organizations are exempt from FUTA. Virginia nonprofits can also elect a reimbursement method for unemployment, and clergy payroll follows entirely different rules.
Read answerWhat's a certified payroll report and when is it required?
A certified payroll report (WH-347) is a weekly filing required on federally funded construction projects under the Davis-Bacon Act. It documents every worker's trade classification, hours, wages, and fringe benefits, and must reconcile with your general ledger payroll.
Read answerWhat's involved in setting up Xero for a brand-new business?
Xero setup goes well beyond creating an account. It involves configuring your chart of accounts, connecting bank feeds, building invoice templates, setting tax rates, and training you to use it properly from day one.
Read answerWhat payroll setup does a medical or dental practice need?
Healthcare practices need payroll configured for multiple employee types with different pay structures. Owner compensation, provider bonuses, clinical hourly staff, and admin each require distinct setup for pay, benefits, and tax treatment.
Read answerHow do dental and medical practices account for supplies and inventory?
Most small practices expense supplies when purchased under the cash method. Larger practices, especially dental offices with high-value materials like crowns and implants, may need perpetual inventory tracking to manage costs accurately.
Read answer
