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.
The following rates apply at the state and city level:
In addition to the 5.3% state tax, an additional 0.7% regional rate applies to certain cities and counties.
While there is a state sales tax and a number of 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:
The Virginia Department of Revenue maintains a comprehensive list of what constitutes sales tax nexus in the state here for your reference to determine if any of these apply to you.
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 fulfilment center in the state of Virginia – located in Petersburg, VA and Chester, VA – you may be responsible for sales tax in the state.
The following items or goods 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 on those goods sold.
Non-prescription drugs are exempted from sales tax in the state of 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 the process of 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:
You’ll need a business location, mailing address, and some 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:
The State of Virginia will assign a filing frequency based on your total sales tax liability and estimates. This is assigned at the time you receive your registration, though it may be updated in the future depending on sales volume. Each frequency has its own 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 the state (this does not apply to any of the local portion of the tax collected). There are a number of factors that 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 that has been 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 20|
|April – June (Q2)||July 20|
|July – September (Q3)||October 20|
|October – December (Q4)||January 20|
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.
If sales tax is not paid by your specific filing deadline, a penalty may result of 6% per month added to the total tax owed. There is a maximum penalty for both 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, there is 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 6 months have passed. For this reason, if a business has not paid its sales tax owed within 6 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 a rate of 2% per month.
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 software. TaxTools reviews your data by sorting through Virginia addresses and determining the right sales tax rate based on location. This can also be used to work with your existing e-commerce website and quickly manage collection, tracking, and payment of your sales tax in the state 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.