Virginia Home-Based Business Laws: Zoning, Local License, Child Care and Short-Term Rentals

October 29, 2026

Virginia has no statewide home-occupation statute. Whether you can run a business from your home depends on three things: your locality's zoning rules (verify with your locality), any HOA or deed covenants that bind your property, and the state licenses your kind of business needs. Virginia has no general state business license, and the State Corporation Commission (SCC) forms entities but issues no business license.

This guide covers those layers in the order you should check them. It is informational content, not legal or tax advice.

1. Zoning: home occupations are a local matter

Each county, city and town regulates home occupations through its own zoning ordinance. Because state law sets no single rule, two addresses a few miles apart can have different answers. Zoning ordinances usually sort home uses into three groups:

• Allowed by right: the use needs no separate approval, but it must meet listed conditions, such as limits on signs, employees, customer visits or outdoor storage.
• Permit or special exception: the use needs an additional approval. Localities use different names for this, including home occupation permit, special exception and conditional use permit. Ask the zoning office which term and process applies to your use.
• Prohibited: the zone does not allow the use.

Ask the zoning administrator for the home occupation section of the ordinance and for a written determination covering your specific business. Do not assume a use is allowed because a neighbor runs one.

2. HOA and deed covenants

A homeowners association (HOA) or a recorded deed covenant can be stricter than zoning. A zoning approval does not cancel a private restriction. Covenants bind you as a private contract with the association or the other owners in the subdivision, and enforcement happens through the association, not the locality.

Before you sign a lease, buy a home or spend money on a build-out, request the governing documents (declaration, covenants, bylaws and rules). Then ask the board in writing whether your type of home business is permitted and whether it needs approval. Keep the reply. A verbal assurance from a manager or neighbor will not protect you if the board later objects.

3. The local license: BPOL

Virginia's general business license is a local tax: the Business, Professional and Occupational License (BPOL) tax under Va. Code 58.1-3700 et seq. Cities, counties and some towns administer it, usually through the Commissioner of the Revenue. Each locality sets its own rates, gross receipts thresholds and filing deadlines, so never assume one locality's numbers apply to another.

Not every locality levies a general BPOL. Va. Code 58.1-3704 allows a locality to levy none. Localities without a general county license include Stafford, Rockingham, Bedford County, Washington County, Montgomery County, Louisa and Fluvanna. Towns can also displace the county tax within their limits. Check the rule for your exact address before you assume you owe or do not owe the tax.

Population affects how much a locality can require. A locality with more than 50,000 people cannot require a license for gross receipts under $100,000. A locality with 25,000 to 50,000 people cannot require one for gross receipts under $50,000. Localities under 25,000 people have no statutory floor. Localities over 50,000 may also waive the license up to $200,000 (verify the waiver ceiling with your locality). Our BPOL tax guide by locality explains these floors in more detail.

A business run from home is licensed by the locality where it operates. An online seller with no definite place of business is licensed where the owner resides (Va. Code 58.1-3703.1). If you operate under a trade name, no local license may be issued until you file an assumed name certificate with the SCC (Va. Code 59.1-74).

4. Home-based child care

Child care is the area where state law sets the most specific limits on local zoning. Two rules matter.

Licensing runs through the Virginia Department of Education. Child day centers and family day homes are regulated by the Department of Education. The Department of Social Services licenses other programs, such as assisted living and adult day care, not family child care. For care of one to four children, not counting the provider's own children, registration is voluntary. For five to twelve children, a license is required (Va. Code 22.1-289.015).

Zoning treats small care as a residential use. Under Va. Code 15.2-2292, care for one to four children is treated as a residential use, and a locality may not impose conditions stricter than those it places on a family home. For five to twelve children, a locality may, by ordinance, let its zoning administrator issue an administrative permit. Adjoining property owners receive notice, and they have 30 days to object. Whether your locality has adopted that ordinance is a local question, so ask the zoning office.

If you plan care for five or more children, confirm both the zoning path and the Department of Education license before you advertise or enroll anyone.

5. Short-term rentals

Virginia's short-term rental rules are in Va. Code 15.2-983. They govern renting a home to guests for short stays, often booked through an online platform. The main points:

• A locality may create an annual short-term rental registry. Registration is ministerial, the fee must be reasonable and cost-based, a violation can carry a penalty of up to $500 per violation, and repeat violations can lead to the locality barring the property.
• For ordinances enacted after December 31, 2023, a locality may not require a special exception for an owner-occupied primary residence.
• Some operators do not need to register. These include operators licensed by the Real Estate Board, registered time-share operators, lodging licensed by the Virginia Department of Health, and locally licensed real estate, hotel or bed and breakfast operators.
• HOA covenants still control, even where the locality allows the rental.

Rules differ from one locality to the next. Our short-term rental rules by locality page compares them. One caution: in BPOL law, the term 'short-term rental' means equipment rental, not renting a home to guests. Do not read a BPOL code section that uses that term as covering your guest rental.

6. Cottage food businesses

Virginia has no dollar cap on cottage food sales. Under Va. Code 3.2-5130, listed non-hazardous foods can be made in a home kitchen and sold directly to Virginia consumers, including online and by delivery. The statute changed effective July 1, 2026, so verify the current text and the food list with the Virginia Department of Agriculture and Consumer Services (VDACS) before you rely on it. Foods outside the list, or foods that are hazardous, follow other rules. For the steps, see how to start a cottage food business in Virginia.

7. Taxes and registrations

• Sales tax. If you sell taxable goods, register with the Virginia Department of Taxation (Virginia Tax) before you make taxable sales. The base rate is 5.3% (state plus local). Regional-tax localities pay 6%, eight localities pay 6.3%, and the Historic Triangle (James City County, Williamsburg and York County) pays 7%. Groceries are taxed at 1%. Confirm the rate for your address on our sales tax registration and rates page and at tax.virginia.gov.
• Federal home office deduction. The deduction has its own use tests. Ask the IRS or a CPA before you claim it.
• LLC. Articles of Organization cost $100 with the SCC. Virginia LLCs file no annual report. They pay a $50 annual registration fee instead. See how to start an LLC in Virginia.
• Assumed name (DBA). File an assumed name certificate with the SCC for $10, not with the circuit court. If you want to hold a name before you file, a name reservation costs $10 for 120 days. See the Virginia DBA filing process.

8. State licenses for regulated trades

Some home businesses need a state license no matter what zoning allows. The Department of Professional and Occupational Regulation (DPOR) runs boards for trades such as contractors and cosmetology, and the Department of Health Professions licenses many health professions. Contractor license classes changed on July 1, 2025:

• Class C: over $1,000 to under $30,000
• Class B: $30,000 to under $150,000
• Class A: $150,000 or more

Confirm the license your trade needs with the board that covers it before you take on paid work. For a broader overview, see Virginia business licenses.

Order of steps

1. Get your zoning answer in writing from the locality (verify with your locality).
2. Get HOA or deed covenant approval in writing from the board.
3. Choose your entity and name. File the LLC or corporation with the SCC if needed, and file an assumed name certificate for any trade name.
4. Obtain the BPOL license where you operate, if your locality levies one.
5. Register for sales tax if you sell taxable goods.
6. Obtain any state trade or professional license before you start work.
7. If you will care for children or host guests, meet the child care or short-term rental requirements first.

Get answers from the right office

Zoning, HOA and BPOL questions go to the locality. Child care licensing goes to the Department of Education. Entity and assumed name filings go to the SCC. Sales tax goes to Virginia Tax. For complex situations, such as a shared property, a licensed trade run from home or a mixed-use building, consult a qualified Virginia attorney. Ask a CPA about tax treatment.

This article is informational content, not legal or tax advice. Laws, fees and deadlines change, and local rules vary. Confirm every figure with the agency named before you act.