Virginia LLC and PLLC taxes: what to file and when

Virginia follows the federal classification of your LLC:

• Single-member LLC: disregarded by default. Virginia Tax says the disregarded entity is not required to file Form 502. Income goes on the owner's return.
• Multi-member LLC or PLLC: a partnership by default. It files federal Form 1065 and Virginia Form 502.
• LLC or PLLC that elects S corporation status: files federal Form 1120-S and Virginia Form 502.

Every pass-through entity doing business in Virginia or with Virginia-source income must file Form 502 electronically by the 15th day of the 4th month after its tax year ends. Virginia grants an automatic six-month extension to file, but not to pay.

If the LLC has nonresident owners, it generally must withhold and pay Virginia tax of 5% on their Virginia-source share, unless an exception applies.

Owners. Virginia residents report their share on Form 760, due May 1 for calendar-year filers. Nonresident owners file Form 763.

PTET. An LLC can elect Virginia's pass-through entity tax and pay state tax for its owners on Form 502PTET. See Virginia PTET.

SCC annual registration fee. Every Virginia and foreign LLC registered in Virginia pays $50 a year to the State Corporation Commission, due by the last day of the month it was organized or registered. The SCC sends the assessment about two months ahead to the registered agent. A late payment adds a $25 penalty. If the fee is still unpaid by the last day of the third month after the due date, a Virginia LLC is automatically canceled.

BPOL business license tax. Virginia law lets counties, cities and towns levy a license tax on businesses and professions. Rates, thresholds and due dates vary by locality. Fairfax County is one example:

• Register within 75 days of starting business in the county.
• Renew and pay by March 1 each year. Late renewals carry a 10% penalty.
• The tax is generally based on prior-year gross receipts. Businesses with $10,000 or less in receipts pay no fee.
• Businesses in the cities of Fairfax and Falls Church and certain towns deal with their own city or town instead.

Arlington, Alexandria, Loudoun and other localities have their own rules. Check with the commissioner of the revenue or tax office where your business is located.

Sales and use tax. If the LLC sells taxable goods, register with Virginia Tax before you start collecting sales tax.

A professional limited liability company is an LLC formed for the sole and specific purpose of rendering a licensed professional service. Virginia's list includes physicians and other healing arts practitioners, dentists, pharmacists, optometrists, physical therapists, veterinarians, attorneys, CPAs, architects, engineers, land surveyors and others. Members generally must be licensed to render the same service. For architects, engineers, land surveyors and landscape architects, at least two-thirds of the membership interests must be held by licensed individuals or authorized professional entities.

Taxes are the same as any LLC. The "P" changes who can own the company, not how it is taxed.

S corporation election. An eligible LLC or PLLC can elect S status on IRS Form 2553, generally no more than 2 months and 15 days after the start of the tax year the election is to take effect. Owners who work in the business must then take a reasonable W-2 salary. See S corp reasonable compensation and how to elect S corp status.

Best for: Virginia physicians, dentists, attorneys, consultants and other professionals with a PLLC, and owners of new or multi-member LLCs in Northern Virginia and beyond.

1. Free initial consultation. We confirm how your LLC or PLLC is classified and where it does business.
2. Fees quoted upfront, in writing. Our fees are transparent and fair, and you see them before work starts.
3. We prepare the federal return (1065 or 1120-S), Virginia Form 502 and owner K-1s.
4. We review whether the PTET or an S corporation election fits the owners' situation.
5. We keep a calendar of SCC, BPOL, sales tax and estimated payment dates.

What to send us: last year's federal and Virginia returns, your SCC entity ID, year-end financial statements, your local business license, and each owner's state of residence.