Virginia Sales Tax
Virginia Sales Tax At a Glance
State rate: 5.3%
Maximum combined rate: 7%
Tax Holidays: Back to School, Emergency Preparedness, Energy Star
Governing Body: Virginia Department of Taxation
The sales tax in Virginia varies by location, with a state sales tax rate, a portion that goes to local municipalities, and additional municipal rates in certain cities and counties in the state.
Virginia Sales Tax Rates
The following rates apply at the state and city level:
- Virginia (VA) Sales Tax Rate: 5.3% (4.3% for the state and 1% for local municipalities)
- Maximum rate for local municipalities: 7%
In addition to the 5.3% state tax, an additional 0.7-1.7% regional rate applies to certain cities and counties.
Determining Sales Tax Nexus in Virginia
While there is a state sales tax and several municipal sales taxes in Virginia, they only apply if you have sales tax nexus in the state. This means you have a presence in Virginia that requires you to collect and pay sales taxes on specific goods or services sold.
Sales tax nexus is determined by the following – if you have any of the following, you may be eligible to collect and pay sales tax in Virginia:
- Employees or contractors in the state
- A physical location in the state
- Leased property or physical goods in the state
- Physical goods or inventory in a warehouse in the state
- Any advertisements you pay for in a newspaper, billboard, or poster in the state
- Ownership of real estate or personal property in the state
One additional factor that can determine if you have sales tax nexus in Virginia relates to goods sold online. Most frequently discussed in reference to Amazon’s FBA platform, it will depend on where your goods are stored. If your inventory is stored in an Amazon fulfillment center in the state of Virginia – located in Petersburg, VA, and Chester, VA – you may be responsible for sales tax in the state.
Virginia’s economic nexus law requires remote sellers who make $100,000 or more in annual sales or 200 or more transactions to Virginia residents to collect and remit sales tax. Marketplace facilitators are also required to register on behalf of their users if they reach these thresholds in aggregate.
What Is Eligible for Sales Tax in Virginia?
The following types of tangible personal property are eligible for sales tax in the state of Virginia. If you have determined you have sales tax nexus in the state and sell any of the following goods, you are likely responsible for collecting and paying sale tax.
- Almost all physical goods are taxable in Virginia. These include most retail sales except for certain inclusions like medical devices, textbooks, data center equipment, and protective clothing. The list of sales tax exclusions in Virginia is short.
- Purchasing an item tax-exempt with the intent to resell but then using it for business or personal use instead.
- Buying a taxable item outside of Virginia and having it delivered or bringing it into the state if tax was not paid at the time of purchase.
Non-prescription drugs are exempted from sales tax in Virginia, as are services rendered wherein no physical good was manufactured or produced. Additionally, certain food items are taxed at a reduced rate of 1.5% by the state and 1% local tax.
See the State of Virginia’s Department of Taxation website to learn more about registering to collect sales and use tax in the state. You will need to acquire a Virginia sales and use tax permit, which you can do from the link below:
- Register to collect, accrue and remit taxes.
- Download and send Form R-1 to the Virginia Department of Taxation.
You’ll need a business location, mailing address, and additional personal and business information to apply for and receive your registration. Be sure to review the above list before starting your application. There is no charge for this registration, and there is no renewal required.
You will pay Virginia sales and use tax by:
- Collecting based on the final destination of your sale – all taxes are applied based on the location where the product or service is delivered (destination based). You can determine your local sales tax rate here. For multiple locations, rates always apply to the point of sale.
- If you are located outside of Virginia and selling into the state, you are expected to collect taxes based on the location of the buyer of that item.
- Filing a sales tax return. The Virginia Department of Taxation has an online portal at ATAX, through which you can register and file your taxes online.
- Making a payment is done through the Virginia Tax website, or you can use software from an approved vendor.
The State of Virginia will assign a tax filing frequency based on your total sales tax liability and estimates. This is assigned when you receive your registration, though it may be updated in the future depending on sales volume. Each frequency has its form, or the general form, ST-9, can be used.
Virginia offers a discount for those businesses that owe less than $20,000 in sales tax on average if they file and pay on time. This allows such businesses to keep a portion of the sales tax they collected on behalf of the state (this does not apply to any of the local portions of the tax collected). Several factors apply to discounts, so it is important that you reference Virginia’s documentation on the subject to determine what you are eligible for.
Quarterly: The following deadlines apply to any business assigned a quarterly filing deadline. Payments can always be made earlier without issue, but your final filing for each quarter must be submitted no later than the listed date:
|January – March (Q1)
|April – June (Q2)
|July – September (Q3)
|October – December (Q4)
Monthly: The following deadlines apply to any business that has been assigned a monthly filing deadline. These payments must all be received by 5:00PM on the day of collection to be considered on time for each of the monthly dates assigned:
Annual: Some businesses may only be required to file annually. When this is the case, the annual payment is due on January 20 following the year for which the taxes are being collected.
Penalties and Interest for Late Payments
If sales tax is not paid by your specific filing deadline, a penalty of 6% per month is added to the total tax owed. There is a maximum penalty for quarterly and monthly filers of 30% of the total tax owed with a minimum penalty of $10. This $10 penalty applies even if there is no sales tax due.
In addition to the late filing penalty, a late payment penalty of 6% per month up to 30% of the total tax imposed. This is separate from the filing deadline but doesn’t apply until after six months have passed. For this reason, if a business has not paid its sales tax within six months, the full 30% may be charged when the late fee is applied. Only one of the two late fees will be applied, so the maximum remains 30% of the total tax owed, even if the filing was done late and the payment is late. Interest is applied to all late payments at 2% per month.
- Virginia Department of Taxation forms and resources
- Sales and use tax documentation from the state
- VATAX online services for businesses login
- Form R-1 to register for sales tax collection in the state
Virginia Sales Tax Software
To streamline the process of determining your sales tax liability, potential filing frequency, and to collect those Virginia sales taxes, you can use our TaxTools sales tax calculator software. TaxTools reviews your data by sorting through Virginia addresses and determining the right sales tax rate based on location. This can also work with your existing e-commerce website and quickly manage the collection, tracking, and payment of your sales tax in the Commonwealth of Virginia. Contact us for more information or sign up for a free trial of the TaxTools software.
You can also use our free sales tax calculator to look up the rate for any Virginia address.
Last updated September 2023