When someone opens a business in Arlington, the Business Tax Division of the Arlington County Commissioner of Revenue’s Office is where to begin the process. There, a business inspector will answer questions about the six different types of Arlington County business taxes. While these taxes are assessed by Commissioner of Revenue Ingrid H. Morroy, it is the County Board who decides on the types of taxes and sets the rates. The revenue from the taxes and fees are “for the support of the County government, the payment of the County debt, and for other County purposes.”
The Commissioner of Revenue’s Business Tax Division is responsible for upholding the Arlington County Code while providing services for each type of business tax. These include administering business license tax and custodial taxes, including cigarette tax, county meals tax, short-term rental tax, and transient occupancy (hotel) tax, as well as discovering and equitably assessing all business property, also referred to as the business tangible tax.
Below is a list of each business tax with pertinent information for the taxpayer.
Per Chapter 11 of the Arlington County Code, beginning January 1 of each year and ending on the following December 31, the Commissioner of Revenue will assess the annual Business License Tax or flat fee on businesses conducting any business in the County. This assessment is referred to as the business privilege tax (officially known as the “Business, Professional, and Occupational License” or “BPOL” tax) on all Arlington businesses, including home-based businesses. The filing and payment for the business license are due annually on March 1 by 11:59 p.m. EST.
The Commissioner of Revenue assesses the business tangible personal property tax on business property such as computer equipment, furniture, machinery, and tools, as well as any other equipment owned, leased, or in their possession as of January 1. All Arlington County businesses must file a Business Tangible Personal Property Return each year by 11:59 p.m. EST on May 1. Once the tax is assessed by the Commissioner of Revenue, the Treasurer’s Office sends a bill. Payments, if applicable are due each year on or before September 5 to the Arlington County Treasurer’s Office. It’s important to know that if a business ceases operations after January 1, the business tangible tax is not prorated, and a return must still be filed by the due date.
Custodial Taxes are collected by businesses from consumers. These include Cigarette Tax, County Meals Tax, Short-Term Rental Tax, and Transient Occupancy Tax. The business holds the collected funds “in trust” for the County until the business files and pays.
- Cigarette Tax is collected by tobacco wholesalers from Arlington retailers who sell cigarettes. The wholesalers are required to collect $0.30 on each pack of 20 cigarettes and $0.375 for each pack containing 25 cigarettes from the seller. The wholesaler must submit the cigarette tax report and payment by the 20th of each of month on taxes collected during the previous calendar month.
- County Meals Tax includes meals, food, and beverage taxes where the seller must collect 4 percent, in addition to state and local sales tax. Taxes must be charged on prepared meals and beverages, including alcoholic drinks, sold or prepared in Arlington. The filing and payment for the county meals tax are due on the 20th of each month on taxes collected during the previous calendar month.
- Short-Term Rental Tax is applied to those businesses who own property, except trailers, that is rented out on a daily basis, not to exceed 92 consecutive days. For example, scooters, DVD’s, and Audio-Visual equipment are considered short-term rentals. Annually, all short-term rental businesses must submit an Application for Certification on or before February 1. When starting a new business, the Application for Certification for Short-Term Rental Business must be submitted within 30 days of opening. Some rental businesses may be eligible for certain exemptions of business tangible tax and a reduced business license rate. Short-term rental tax filings and payments must be submitted quarterly on or before the 20th of April, July, October, and January.
- Transient Occupancy Tax (TOT) of 7.25 percent is charged to a guest who rents a room or space at any hotel, motel, or tourist home (also known as an “AirBnB”) for a period of 29 consecutive days or less. The TOT rate includes 2 percent of the Virginia regional TOT plus Arlington County 5.25 percent TOT. The filing and payment for TOT are due on the 20th of each month on taxes collected during the previous calendar month.
Aside from the assessment of taxes, other roles of the Business Tax Division include conducting desk audits of all business license holders and in-depth field audits to ensure that businesses are reporting properly.
For more information about the Commissioner of Revenue’s Office and the other services provided, visit https://departments.arlingtonva.us/cor/.