Does Your Richmond Rental Business Need a BPOL License? Business License Tax Rules for Virginia Landlords

Quick Answer

Maybe. BPOL (Business, Professional and Occupational License) is a local Virginia business tax, not a state program, and every city and county sets its own rules on whether landlords owe it, at what gross receipts level, and at what rate. Richmond, Henrico County, and Chesterfield County all maintain BPOL programs with published gross receipts thresholds, while Hanover County’s published license requirements are narrower and focused on specific trades rather than general rental activity. Because the details change from locality to locality (and from year to year), the only way to know for certain whether your rental business needs a BPOL license is to contact the Commissioner of the Revenue in the city or county where your property sits.

What Is a BPOL License, Exactly?

BPOL stands for Business, Professional and Occupational License. It is a tax that Virginia cities, counties, and towns are permitted to impose on people and companies doing business within their borders, under authority granted by the Code of Virginia (Title 58.1, Chapter 37). There is no statewide Virginia business license. Instead, each locality decides for itself whether to have a BPOL program at all, what the tax rates are for different business classifications, and what gross receipts threshold (if any) exempts smaller operators from owing tax.

That local-by-local structure is the single most important thing for a Richmond-area landlord to understand. A rule you read about Richmond’s BPOL program will not necessarily apply the same way in Henrico, and a rule from Henrico will not necessarily apply in Chesterfield or Hanover. Even within one locality, the threshold and rate can change from year to year as city councils and boards of supervisors adjust budgets.

The State Law Wrinkle That Explains Why Rules Differ So Much

There is also a specific quirk in state law that landlords should know about. Virginia Code Section 58.1-3703(C)(7) generally prohibits counties, cities, and towns from taxing someone simply for “engaging in the business of renting, as the owner of such property, real property,” with exceptions for hotels, motels, campgrounds, bed and breakfasts, and similar short-term lodging. However, the same section grandfathers in any locality that was already taxing the rental of real property as of January 1, 1974, allowing those localities to keep doing so.

In practical terms, this grandfather clause is a big part of why some Richmond-region localities tax long-term residential rental income under BPOL while others do not, or do so only in limited circumstances. It is not simply a “cities tax it, counties don’t” rule. It depends on each locality’s specific legal and taxing history, which is one more reason a quick phone call to your local Commissioner of the Revenue is worth more than a general rule of thumb.

Does Richmond Require a BPOL License for Rental Property?

The City of Richmond maintains an active BPOL tax program administered through the Department of Finance. Based on the city’s published new business license materials, Richmond’s structure has historically worked in tiers: businesses with very low gross receipts owe no license tax at all, businesses in a middle range pay a modest flat annual fee, and businesses above a higher gross receipts threshold are taxed at a percentage rate that varies by business classification (retail, professional services, real estate, and so on).

Richmond has also periodically raised its exemption threshold, most recently for the 2026 license year according to reporting on the city’s adopted budget ordinance. Because this threshold is set by city ordinance and gets revisited during the budget process, landlords should not rely on last year’s number. Call Richmond Finance or check the city’s BPOL page for the figure that applies to the current license year before assuming you are under or over the line.

Does Henrico County Require a BPOL License for Rental Property?

Henrico County’s official business license page states that businesses with gross receipts under a set dollar threshold (currently described by the county as $500,000) normally owe no business license tax. The important catch: even when no tax is ultimately owed, the county’s own language says businesses still need to apply for a license. “Owing zero dollars” and “having no filing obligation” are not automatically the same thing in Henrico, so do not assume that falling under the threshold means there is nothing to file.

Henrico’s page does not spell out, in plain language, exactly how it classifies long-term residential rental income for licensing purposes. That is worth asking the Revenue Division’s Business Section directly, since the answer determines which rate schedule, if any, applies once gross receipts rise above the exemption level.

Does Chesterfield County Require a BPOL License for Rental Property?

Chesterfield County’s finance materials state that most businesses with a physical presence, or “situs,” in the county need a business license, valid for the calendar year. Chesterfield’s published business tax rate schedule lists a gross receipts threshold in roughly the same range as Richmond’s and Henrico’s current figures, below which no license tax is due, along with per-classification rates (including real estate-related services) that apply once receipts climb above that level.

Chesterfield’s general business license page does not single out residential landlords by name, and its consumer-facing guidance focuses more on home-based business rules than rental property specifically. That gap between the published rate schedule and the plain-language guidance is exactly the kind of ambiguity worth resolving with a call to the Commissioner of the Revenue’s business license office rather than guessing.

Does Hanover County Require a BPOL License for Rental Property?

Hanover County’s published business license requirements look noticeably different from its neighbors. Rather than a broad requirement covering most business types above a gross receipts floor, Hanover’s listed license categories are narrower and center on contractors, electrical contractors, plumbers, and steam fitters, each with their own threshold. Hanover’s page does not list residential landlords or property owners among the business types that need a license.

That does not automatically mean every Hanover County landlord is in the clear, though. It means the county’s general-purpose landlord guidance is thin compared to Richmond, Henrico, and Chesterfield, which is precisely the situation where written or verbal confirmation from the Commissioner of the Revenue beats an assumption based on a webpage that may not address your situation.

Side-by-Side Comparison

This table reflects a snapshot of published guidance at the time of writing. BPOL thresholds, rates, and classification rules are adjusted by local governments periodically, so treat this as a starting point for your own research, not a final answer for the current tax year.

How Gross Receipts From Rental Income Are Generally Treated

Where a locality applies BPOL to rental activity, the tax is typically based on gross receipts, meaning total rent collected before subtracting mortgage payments, repairs, insurance, management fees, or other operating expenses. That differs from income tax, where expenses are netted out first. A landlord collecting a healthy amount of gross rent can still land well above a locality’s BPOL threshold even if the property barely breaks even after expenses, which surprises some owners the first time they look into it.

Most localities with a BPOL program also use a system of gross receipts tiers. Below a certain dollar amount, no license tax is owed at all, though a license application may still be required. Above that floor, many localities apply a flat annual fee up to a second threshold, then shift to a percentage rate once a business is large enough. The exact dollar cutoffs and rates are set locally and do change, so always pull the current figures from your locality’s Commissioner of the Revenue or finance department rather than relying on a number you saw somewhere else.

Renting Your Own Properties vs. Running a Property Management Business

There is an important distinction between two different situations that often get confused:

• An individual or small investor who owns and rents out a handful of properties they hold personally or through a single LLC. Depending on the locality’s rules (including the state law grandfather issue discussed above) and the gross receipts threshold, this activity may or may not trigger a BPOL filing obligation, and if it does, the tax owed may be minimal or zero below the local threshold.
• A business that manages rental properties for other owners in exchange for a management fee, leasing commission, or similar compensation. This is a professional or real estate services activity rather than simply “renting your own property,” and it is far more likely to fall squarely within a locality’s general BPOL requirements regardless of the rental-specific carve-outs discussed earlier, since the company is earning fees for services rendered to third parties, not just collecting rent as an owner.

If you are a landlord who also manages properties for friends, family, or other investors for a fee, even informally, that activity can push you from “probably exempt or low-threshold rental income” into “clearly operating a business service that needs its own license and classification.” This is a common gray area, and it is worth raising directly with the Commissioner of the Revenue if it applies to you.

Recordkeeping and Annual Filing Basics

Whether or not tax ends up being owed, BPOL compliance generally comes down to a few recurring habits:

1. Track gross rental receipts by calendar year, by property and in total. Most localities calculate BPOL based on the prior year’s gross receipts, so clean, dated records of rent collected (not net income) matter most.
2. Know your locality’s license year and renewal deadline. Several Virginia localities, including Hanover County in its published materials, set an annual renewal deadline of March 1, though you should confirm the exact date for your specific city or county, since it is not identical everywhere.
3. Keep your business license application and any correspondence with the Commissioner of the Revenue on file, the same way you would keep a lease, a W-9, or a 1099. If a locality ever questions whether you filed or applied in a prior year, having your own paperwork saves time.
4. Re-check your status whenever something changes, such as adding a new rental property, crossing into a new locality, forming an LLC, or starting to manage property for other owners. A change in gross receipts or business activity can move you across a threshold you were previously under.

What Happens if You Don’t File or Pay

Penalties for BPOL noncompliance are set locally, so specific dollar amounts and percentages vary by city or county, and this article will not guess at figures that differ by jurisdiction. In general terms, most localities apply some combination of a late filing penalty, interest on any tax actually owed, and the possibility of further enforcement action if a business keeps operating without a required license after being notified. For the actual penalty structure in your locality, ask the Commissioner of the Revenue directly, since this is exactly the kind of detail they handle every day.

BPOL Is Not the Same as Rental Registration or Inspection Programs

It is easy to mix up BPOL with other local landlord obligations, but they are separate systems with separate purposes. BPOL is a tax on business activity. Separately, the City of Richmond has been developing and rolling out a rental housing inspection program aimed at health and safety compliance in rental units, which is a housing and code-enforcement initiative rather than a tax filing. Other Richmond-region localities may have their own landlord registration, zoning, or short-term rental permitting rules as well. A landlord can be fully caught up on BPOL and still have an entirely separate registration or inspection requirement to satisfy, so do not assume one type of compliance covers the other.

Practical Steps to Take

1. List every locality where you own rental property (Richmond, Henrico, Chesterfield, Hanover, Colonial Heights, Petersburg, or elsewhere in Central Virginia).
2. Pull together last year’s actual gross rental receipts for each property, by locality.
3. Call or email the Commissioner of the Revenue’s business license office in each locality and ask one plain question: does BPOL apply to someone who rents out residential property here, and if so, what is the current gross receipts threshold and rate?
4. Ask specifically whether an application is required even if no tax ends up being owed, since some localities require the paperwork regardless of the dollar amount, as Henrico’s own guidance suggests.
5. If you manage property for other owners in addition to your own, raise that separately, since it may be treated differently than simply renting property you own.
6. Put the renewal deadline on your calendar once you know it, and review your status every year as your portfolio changes.
7. When in doubt, loop in a Virginia CPA or attorney who handles local business taxes, particularly if you own property across several localities with different rules.

Frequently Asked Questions

Do I need a BPOL license if I only rent out one single-family home?

It depends on the locality where the property sits and that locality’s specific rules, including its gross receipts threshold and how it treats rental income. Some landlords with a single property fall comfortably under a local exemption threshold and owe no tax, while others may still need to file an application even at low gross receipts. Confirm with the Commissioner of the Revenue in that specific city or county.

Does it matter if my rental property is owned by an LLC instead of me personally?

The form of ownership generally does not change whether the underlying rental activity is subject to BPOL in a given locality, but it can affect how the license is registered and reported. Virginia tax rulings have focused less on entity type and more on whether the rental activity rises to the level of “engaging in business” as opposed to simply collecting rent on a small, passive basis. This is a fact-specific question best confirmed with your Commissioner of the Revenue or a tax professional.

If I’m under the gross receipts threshold, do I still have to apply for a license?

In some localities, yes. Henrico County’s own guidance, for example, states that businesses below its threshold still need to apply for a license even though no tax is owed. Do not assume that “no tax owed” means “no paperwork required” without checking your specific locality’s rule.

Is BPOL the same thing as Richmond’s rental inspection or landlord registration program?

No. BPOL is a local business tax program administered by the finance department or Commissioner of the Revenue. A rental inspection or registration program, where a locality has one, is a separate housing and code-compliance initiative, typically run through a different city or county department. You may have obligations under both, under one, or under neither, depending on where your property is located and that locality’s current programs.

Do out-of-state or out-of-area owners with Richmond-region rentals need to worry about BPOL?

BPOL generally attaches to the business activity conducted in a given locality, which includes owning and renting property there, regardless of where the owner personally lives. An out-of-state or out-of-market owner with Richmond-area rental property should check with the relevant Commissioner of the Revenue the same way a local owner would, rather than assuming the rule only applies to Virginia residents.

Does my property management company need its own, separate BPOL license?

A property management company that manages rental properties for other owners in exchange for fees is generally providing a professional or real estate service, which is a different business activity than simply owning and renting property. In localities with a general BPOL program, a property management business is typically expected to hold its own license and report its own management fee income, separate from any BPOL obligations of the individual property owners it works for. Confirm the applicable classification and rate with the Commissioner of the Revenue where the management company operates.

What if I’ve been renting property for years without ever looking into BPOL?

Reach out to the Commissioner of the Revenue in the relevant locality proactively rather than waiting to be contacted. Most offices would rather help a landlord get properly registered and current than pursue aggressive enforcement against someone who comes forward voluntarily, though the exact approach varies by locality. A Virginia CPA or attorney can also help you figure out whether, and how far, back-filing may be appropriate in your situation.

How often do I need to renew a BPOL license once I have one?

Most Virginia localities require annual renewal, often tied to the calendar year, with gross receipts reported based on the prior year’s activity. Some localities, such as Hanover County in its published materials, set a specific renewal deadline (Hanover lists March 1). Your deadline may differ, so confirm it directly with your locality rather than assuming it matches a neighboring jurisdiction.

Talk to Mission Realty

BPOL compliance is just one piece of running a rental property successfully in the Richmond region, and it is easy for details like this to slip through the cracks when you are also handling leasing, maintenance, tenant screening, and everything else that comes with owning rental real estate. If you would rather hand off the day-to-day work of managing your properties, including staying on top of local compliance questions that affect how you run your rental business, Mission Realty’s property management services are built for Richmond-area owners who want a local team handling the details. You can learn more about how we support owners across Richmond, Henrico, Chesterfield, Hanover, and the surrounding counties, or get a no-obligation free rental analysis to see what your property could rent for and how professional management might fit into your plans. If you have questions about your specific portfolio or just want to talk through your options, contact us and we will be glad to help.