Bank Franchise License Tax
Bank means any incorporated bank, banking association, or trust company organized under federal or state laws. The bank must conduct business or have an office in Virginia or have a charter that appoints any location in Virginia as the place of its main office. A franchise tax is a tax on the privilege of conducting business.
Computation of Tax
All Banks: The City tax is 80 percent of the state's bank franchise tax.
Branch Banks: Banks with branch offices in the City must pay the bank franchise license tax on net capital based upon the ratio of local deposits to total statewide deposits of the bank.
Tax Returns: March 1
Payments: June 1
All banks with main offices located in the City must prepare and file bank franchise tax returns (Virginia Form 64, Schedule H) with the City by March 1 of each year. Any bank with branch offices located in the City but main or other branch offices located outside the City must prepare and file a bank franchise license tax return as well as a copy of the real estate deduction schedule and the apportionment under Code of Virginia Section 58.1-1211 by March 1 of each year.
The City's Finance Department sends certified copies of the returns to the Virginia Department of Taxation.
Every bank in the City should mail its tax payment by June 1 of each year to:
City of Alexandria
P.O. Box 178
Alexandria, VA 22313-1500
Any bank that fails or neglects to file a return and pay the local tax may be subject to a penalty of up to $500.
Net capital is gross capital (capital, surplus and undivided profits) less the following items:
- The assessed value of real property;
- The book value of tangible personal property;
- The pro rata share of government obligations;
- The capital accounts of any bank subsidiaries;
- The amount of any reserve for loan losses allowable by the IRS; and
- The amount of any reserve for marketable securities valuation included in capital, surplus, and undivided profits.
Excluded from Taxation
Under state law, the term "bank" does not include:
- Corporations organized under the laws of other states and operating in Virginia; or
- Banks not organized under Virginia laws; or
- Natural persons and partnerships.
Therefore, these groups are not required to pay an annual franchise tax.
For tax forms and taxpayer assistance, contact:
Tax Services & Enforcement
301 King Street, Room 1700
Alexandria, VA 22314