As an independent city (Virginia cities have no county affiliation), Alexandria provides a comprehensive range of municipal services including: education, health, welfare, and housing and human services programs; public safety and administration of justice; community development, recreation, libraries, consumer assistance, and cultural and historic activities; and transportation, environmental services, and planning.
In order to provide these services, the city may tax real estate, personal property, cigarettes, hotel and motel rooms, restaurant meals, business gross receipts, utilities, admissions, and sales. Personal income and certain public service franchises are taxed only by the state.
The growth and prosperity of businesses is an important goal in the city’s strategic plan. Maintaining competitive tax rates and comparable business operating costs, as compared with localities in the region, is vital to achieving this goal. Detailed information about the various taxes and current rates can be found on the city’s Finance Department website.
Businesses and organizations may be assessed taxes in the following categories. New tax rates are adopted annually by the city council in early May.
Tax or Fee Type
All businesses and organizations must obtain a business license to operate in the city, and must renew the license annually. Tax is assessed on gross receipts, and the rate varies by type of business (see list here). Each business must estimate the gross receipts it will receive between the date of beginning business and the end of the current license year (Dec. 31). The current year’s license tax is computed on that estimate.