Contractors who do not maintain a physical business location in the city but will be performing work in Salem are considered out of area contractors. All out of area contractors are required to obtain a business license before beginning operations. Building Permits will not be issued without proof of a current City of Salem license.
License Tax Rate
License fees will be based on the estimate of the total gross receipts from all jobs performed within the city limits for the calendar year, which will be subject to a true-up to the actual gross receipt amount at the end of the year. Contractors with a gross revenue of less than $49,999 will pay the minimum license fee of $50. Those with a gross of $50,000 or more in any calendar year will pay based on the Contractor’s tax rate of .16 per $100 gross revenue.
Contractors based in a licensing jurisdiction within Virginia whose gross revenue generated in Salem from all jobs in the calendar year is less than $25,000 may be exempt from the license tax fee. In order to be eligible for the exemption a copy of the current year business license from the locality in which the business is physically located in must be submitted with the license application. Exempt Contractors will still be issued a city license number.