Cost of Doing Business

The cost of doing business here is well below the national average, thanks in large part to low City and state tax rates, competitive wages, and transportation infrastructure that provides businesses access to more than two-thirds of the U.S. population within a two-day drive.​

Our Advantages

  • For data centers: accelerated appreciation for qualified data centers on computers and peripherals used in data centers* the tax rate is $0.40 per $100 of assessed value, with a depreciation schedule of 40 percent of the original cost (data centers must meet the code requirement in order to qualify for the discounted rate)
  • For manufacturers: Virginia Beach is one of the few in Virginia to eliminate the machinery and tools tax.
  • Incentive program for new qualifying businesses: If you meet the code qualifications and have gross receipts over $100,000 for the first two license years you will only pay $50.00 each year.

Source: City of Virginia Beach Commissioner of the Revenue

In ​2019, Forbes.com and Forbes Magazine placed Virginia as the 4th Best State for Business.
Virginia came in at number one for the fourth time in the 13-year history of CNBC’s 2019 ranking of America’s Top States for Business ranking.


Together, the Commonwealth of Virginia and the City of Virginia Beach have one of the fairest tax structures of the 50 states. The Commonwealth has not raised its corporate income tax rate of 6% since 1972, and Virginia’s unemployment insurance rates and workers’ compensation costs are among the lowest in the nation.​

CITY OF VIRGINIA BEACH TAX RATES ​
Real Estate​​$0.99 per $100 assessed value
Real Estate Rate for Energy-Efficient Buildings$0.84 per $100 assessed value
Personal Property$4.00 per $100 assessed value
Machinery and Tools$0.00
Business Property


​Data Center Business Property
$4.00 per $100 assessed value 40% of original cost (tangible property) 33% of original cost for manufacturers

$0.40 per $100 assessed value ​
depreciation schedule: 40% of original cost (computers and peripherals) for year 1-3; 30% for year four; 15% for year five and beyond ​​

Business License (per $100 of gross receipts)

Capped at flat fee of $50 for the first two years of operation for a business new to the City. ​

Business license fee applies to businesses with gross receipts exceeding $100,000.

Retailer: $0.20

Contracting: $0.16

Professional: $0.58

Service: $0.36

Wholesalers: $0.12 per $100 of gross purchases

Source: City of Virginia Beach​​, 2021

Real estate is assessed at 100% of its fair market value. Re-assessment notices are mailed the first part of March, and assessment reviews are held from mid-March to the end of April. Annual real estate taxes are collected in two installments. Payment for the first half is due by December 5th of the same year, and the second half due by June 5th of the following year.​​​​

​State of Virginia Tax ​Rates
VIRGINIA TAX RATESNATIONAL AVERAGE*
Corporate Income Tax6%6.49​%
State and Local Sales/Use Tax6%​6.94%

​​Source: *​Calculated by Virginia Economic Development Partnership​​, December 2020

Federal Income Tax R​ates

The United States imposes a tax on the profits of US resident corporations at a rate of 21 percent (reduced from 35 percent by the 2017 Tax Cuts and Jobs Act).

ESTIMATED AVERAGE UTILITY RATES
Industrial Electricity
(Cents per kWh)
$0.062
Industrial Natural Gas
(Dollars per 1000 cubic feet)
$5.08

Source: VEDP, December 2020

For additional information, click here.

​​Cost of Living Index

COST OF LIVING INDEXNATIONAL AVERAGE = 100
Composite index96.1
Grocery items97.3
Housing91.0
Utilities103.0
Transportation92.3
Health care93.8
Miscellaneous goods and services99.0

Source: Council for Community Economic Research Cost of Living Index, 2020 Annual Average Data​

For more cost of living information, click here.

​​​Workers' Compensation and Unemployment Rate Comparison

STATE​WORKERS' COMPENSATION RATE
PER $100 OF PAYROLL
UNEMPLOYMENT INSURANCE RATE
PER EMPLOYEE
Virginia$7.063.60%
California$16.993.85%

South Carolina

$18.193.03%
Georgia$19.483.98%
Maryland$7.075.25%
New Jersey$10.004.70%
New York$15.324.35%
North Carolina$17.085.88%
Pennsylvania$13.265.61%
U.S. Average$19.134.00%

​Source: Cerity, Patriot, 2020​

Office

VIRGINIA BEACH

UNITED STATES

Class A

$27.48$57.38
Class B
$19.67
$30.13
Class C
$15.76
$23.72

Industrial


VIRGINIA BEACH

UNITED STATES

Flex

$9.10$13.73
Warehouse$7.68$8.81

Retail


VIRGINIA BEACH

UNITED STATES

General Retail

$17.11
$21.69
Shopping Center
$13.25
$15.16

Source: CoStar, 2021

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