Virginia Sales and Use Tax
Virginia Sales Tax first came into force in 1966, after passing the general assembly. This came after the state legislature debated the sales tax issue for 20 years. The legislature approved the creation of a new revenue source and standardized the cost of doing business across the state. By that time, 15 local cities already had a sales tax. Virginia’s sales and use tax were last revised in 2018. Currently, the state collects all the revenue and then gives each government its respective shares. That prevents the possibility of local tax commissions creating inconsistencies when collecting revenue.
Virginia Sales and Use Taxes for Local and Online Businesses
Sales Tax Rates in Virginia
You can easily look up how much tax you are going to pay using Virginia’s local tax calculator. All you need to provide is your Virginia’s local business address where you intend to operate. From 2018, in most locations, you will pay a sales tax of 5.3%, which consists of a 4.3% state tax plus 1% local government tax. The last counties to add the 1% tax were Powhatan, Pittsylvania, Frederick, Cumberland, and Allegheny. However, there are places where you will pay more than the base 5.3% sales tax. These places include Hampton Roads at 6%, Northern Virginia at 6%, and Historic Triangle at 7%. Moreover, as per the 1966 Virginia Motor Vehicle Sales and Use Tax Act, a buyer has to pay a 4.15% Motor Vehicle Sales and Use tax. Buyers have to do that when applying for a legal title to own a vehicle. In case they make a trade-in, the dealer will charge them less tax, but the dealer must still calculate the sales tax on the gross charge before they trade in.
Food Sales Tax
In the entire state, buyers pay the least amount of tax at 2.5% when they buy food for home consumption. However, the lower tax does not apply to foods sold for immediate consumption, either on-premises or as take-always. Therefore, while a frozen pizza is taxed at a 2.5% tax rate, a hot pizza will be taxed the full sales tax. The type of store that sells the food is irrelevant. The decision is solely based on the food item bought. Other items taxed at lower rates are personal hygiene items. These include diapers, bed sheets, sanitary napkins, and products meant to be inserted into bodies. Other products include tampons, menstrual sponges, period panties, panty liners, and tampons.
Sales Tax for Online Goods
The sales and use tax apply to goods that have been bought out-of-state and shipped to customers in Virginia. This came after a 2018 Supreme Court ruling in South Dakota v. Wayfair. The ruling allowed Virginia and other states to require e-commerce businesses to collect sales tax if the goods were ordered by mail or online and shipped to the state’s residents.
How to File Sales and Use Tax in Virginia
In Virginia, state taxes are filed monthly or quarterly. For monthly returns, the taxes are due on the 20th of the month, following the close of the filing period. The end dates for quarterly filing periods are March 31, June 30, September 30, and December 31. Moreover, you have to file your returns, even when you don’t owe any taxes.
Other useful articles:
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- How to Verify Tax Exempt Certificate
- Verify Tax Exempt Resale Certificate by State
- What is a Tax Exempt Status
- VAT Taxes in Europe
- Sales Tax Thresholds by State
- Sales Tax in California
- Sales Tax in Florida
- Sales and Use Tax in New York
- Texas Sales and Use Tax and Filing Dates
- Virginia Sales and Use Tax