Chesapeake, VA Local Taxes & Fees: Business Tax Classification (2026)
Key Facts
- Flat-fee threshold
- $50 flat fee under $200,000 gross receipts
- Contractor rate
- $0.16 per $100 gross receipts (Sec. 18-109)
- Retail merchant rate
- $0.20 per $100 gross receipts (Sec. 18-126)
- Wholesale merchant rate
- $50 + $0.12/$100 over $10,000 purchases
- Classification appeal window
- 1 year from assessment or appealable event
- Application deadline
- March 1 each license year
- Late penalty
- 10% of tax or $10, whichever greater
Summary
Every business operating in Chesapeake needs an annual license from the assessing official, and City Code Sec. 18-60 sets the baseline: a flat $50.00 fee per licensed activity if gross receipts stay under $200,000.00, or a percentage-of-gross-receipts tax at the rate tied to the business's classification once receipts hit that threshold. Classification, not size alone, decides which rate table in Article II applies.
Every person or business subject to licensure under this chapter shall be assessed and required to pay annually the following:(1)A fee in the amount of $50.00 for each separately licensed activity where annual gross receipts, calculated in accordance with subsection 18-3(e) of this chapter, are less than $200,000.00; or(2)Unless otherwise provided herein or by state law, an annual license tax on all gross receipts and/or gross purchases, as the case may be, derived from the licensed business activity, at the rates set forth in this article, where annual gross receipts and/or gross purchases, calculated in accordance with subsection 18-3(e) of this chapter, are $200,000.00 or more.
Full Breakdown
Chesapeake's business, professional and occupational license (BPOL) tax runs on classification. Sec. 18-3(a) requires a license for every person doing business, practicing a profession or operating a trade or calling in the city, including contractors, peddlers, itinerant merchants, carnivals, circuses, photographers and public service corporations even without a local office. Sec. 00, calculated per Sec. 00 fee per licensed activity; above that figure, the business pays the percentage rate that its Article II classification carries. 00 of gross receipts under Sec. 00 under Sec. 00 above that under Sec.
18-127. A business that believes the city put it in the wrong classification is not stuck with the assessor's call: Sec. 18-8(a) lets the taxpayer file an administrative appeal of the classification applicable to the taxpayer's business, including whether the business properly falls within a business license subclassification established by the city, within one year of the assessment or the appealable event, whichever is later, and a further appeal can go to the state tax commissioner under Sec. 18-8(c). New businesses located in Chesapeake for the first two license years can also qualify as a 'Qualifying Business' under Sec.
00 fee, on gross receipts earned during that startup window. Applications are due by March 1 each year, and the license lapses if delinquent local taxes remain unpaid.
Violations & Fines
Sec. 18-4(a) fines a late application or late payment ten percent of the tax owed or $10.00, whichever is greater, plus a separate $10.00 penalty for a late license fee; interest accrues at ten percent per year under Sec. 18-4(b). Operating without paying the required fee or tax, including after a bounced check, voids the license under Sec. 18-3(h) and exposes the operator to the criminal and civil liability the chapter imposes for unlicensed business activity.
Frequently Asked Questions
How does Chesapeake decide what license tax rate a business pays?
Can a Chesapeake business challenge its license tax classification?
Do new Chesapeake businesses get any break on the license tax?
Sources & Official References
Other rules in Chesapeake
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