| Office | Virginia Beach Commissioner of the Revenue, business license section |
|---|---|
| Paperwork | Business license application for the buyer, and a closing notice and final gross receipts for the seller |
| Timing | Renewals are due March 1 each year; a new owner applies before it starts operating |
Watch for this: The license fee or tax is based on gross receipts. In a sale year, agree which side reports the receipts earned before and after closing.
How the License Works
Virginia Beach, like other Virginia cities, licenses businesses through its Commissioner of the Revenue. Once a business has operated for a full year, the license is based on the gross receipts of the prior calendar year.
Renewals are due by March 1. If payment arrives late, penalty and interest can apply and the business is treated as unlicensed.
The Buyer's License
In most asset sales, the buyer is a new business in the eyes of the city. A new business applies for its own license and gives an estimate of gross receipts from its start date through December 31.
Ask the business license section whether your deal needs a new license or a change to the existing one. Stock sales, where the same entity keeps operating, may be handled differently.
Closing the Seller's Account
When your entity stops operating in the city, tell the Commissioner's office the date you stopped and what happened to the business. That keeps a renewal notice from arriving next year for a company you no longer own.
Keep a copy of what you sent and the date. If a notice does show up, that record settles it quickly.
Gross Receipts in the Sale Year
Because the license follows receipts, the sale year can get messy. Your company earned receipts before closing, and the buyer earns them after. Agree in the purchase agreement how the license cost for that year is shared.
Your CPA can line up the receipts reported to the city with your financial statements and sales tax returns. Buyers will check that they match.
Other Permits Tied to the Location
Zoning approvals, health permits, signs and alarms can each have their own rules on new owners. List every permit the business holds and ask the issuing office how a sale affects it. Restaurants and bars also need the Virginia ABC license for the buyer.
Outside Virginia Beach
A company in Norfolk, Chesapeake or another nearby city holds its license with that city instead. Each city sets its own rates and categories. The nearby markets pages have notes for each.
Checklist
- Pay the current year's license on time, before you market the company
- Ask whether the buyer needs a new license
- Agree on who pays the license cost for the sale year
- Send the city a closing notice with the date
See also the business property return.
This page is general information, not tax or legal advice. Confirm current rules with the Virginia Beach Commissioner of the Revenue, your CPA or your attorney. To plan your sale, request a sale estimate.