Bank Franchise Tax

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General Information and Terms 

The Commissioner of the Revenue is responsible for insuring that every bank or trust company with offices located in the City of Fairfax pays an annual City franchise tax, based on net capital, for the privilege of conducting business in the City.

  • "Bank" means any incorporated bank, banking association or trust company organized under the authority of the laws of the Commonwealth of Virginia or the United States
  • "Net Capital" is gross capital, (capital, surplus and undivided profits) less (i) assessed value of real estate; (ii) book value of tangible personal property; (iii) the pro rata share of government obligations; (iv) the capital accounts of any bank subsidiaries; and (v) loan loss reserves allowed by the IRS, and any reserve for marketable securities valuation included in capital, surplus and undivided profits.

Computation of the Tax

Main Offices: Virginia taxes a bank on its net capital at a rate of $1 for each $100 of a bank’s net capital. The City of Fairfax’s tax is 80% of Virginia’s bank franchise tax or .80 per $100 of net capital.

Branch Offices: The City of Fairfax’s tax for branch banks is also 80% of Virginia’s bank franchise tax, but is calculated on a ratio of local deposits to the banks total net capital.

Filing & Payment Procedures

All banks with main offices in the City of Fairfax must prepare and file bank franchise tax returns with the Commissioner of the Revenue by March 1st of each year. The Commissioner of the Revenue sends certified copies of the returns to the Virginia Department of Taxation.

Payment of Tax

All banks with offices in the City of Fairfax must submit their payment by June 1st of each year. Make checks payable to the City of Fairfax. Mail returns and payments to:

Commissioner of the Revenue
City of Fairfax
10455 Armstrong Street

Fairfax, VA 22030 

Failure to File

Any bank that fails to file shall be subject to a penalty of five percent of the tax due.

Additional Information

For additional information contact the Commissioner of the Revenue, City of Fairfax or see 58.1–1200-1217, Code of Virginia. Article IV, Section 8–15-18, Code of the City of Fairfax.