VA Virginia State sales tax rates

STATEWIDE SALES TAX RATE

5.3%

ECONOMIC SALES THRESHOLD

$100,000

TRANSACTIONS THRESHOLD

200

Do you need to collect sales tax in Virginia?

You’ll need to collect sales tax in Virginia if you have nexus there. There are two ways that sellers can be tied to a state when it comes to nexus: physical or economic. Physical nexus means having enough tangible presence or activity in a state to merit paying sales tax in that state. Economic nexus means passing a states’ economic threshold for total revenue or the number of transactions in that state.

Do you have physical nexus in Virginia?

Virginia considers a seller to have physical nexus if you have any of the following in the state:

An office or place of business
An employee or independent contractor present in the state
Goods in a warehouse
Ownership of real or personal property
Leased Property
More than 12 deliveries of merchandise in a year in Virginia not by common carrier
Advertisements in newspapers, periodicals, on billboards or posters, or by any other means not delivered by the US Mail

Do you have economic nexus in Virginia?

Effective July 1, 2019, Virginia considers businesses who make sales of $100,000 or more in Virginia, or at least 200 individual sales transactions into the state if in the previous or current calendar year to have economic nexus. This means the state considers these vendors obligated to collect sales tax from buyers in the state. You can read Virginia’s economic nexus guidance for businesses here.

Is what you’re selling even taxable?

Services in Virginia are generally not taxable. However – if the service you provide includes creating or manufacturing a product, you may have to deal with the sales and use tax on products.

Retail sales of tangible products are taxable in Virginia, with a few exceptions. These exceptions include certain protective clothing, data center equipment and software, some assistive medical devices, and textbooks sold by learning institutions.

Is SaaS taxable in Virginia?

SaaS is non-taxable in Virginia.

Collecting Sales Tax

The sales tax rate you collect in Virginia depends on whether you are based in Virginia or out-of-state.

How to Collect Sales Tax in Virginia if You are Based in Virginia

For in-state sellers, Virginia is an origin-based sales tax state. So if you live in Virginia, collecting sales tax on your retail sales is fairly easy. Collect sales tax at the tax rate where your business is located.

How to Collect Sales Tax in Virginia if you are Not Based in Virginia

This is where things get trickier for online sellers. Virginia wants sellers who made a sale into Virginia from outside the state to charge sales tax based on the destination of the buyer.

Should you collect sales tax on shipping charges in Virginia?

As long as you separately state the shipping charges on your bill to your customer, you do not have to charge sales tax on shipping.

If you combine shipping and handling charges together, then that amount is taxable. Handling charges must be separately stated from shipping charges.

If you include shipping in the price of the product you sell the customer, then shipping is considered part of the taxable transaction and Virginia declares that you must collect sales tax on shipping.

When are Returns Due?

When you file and pay Virginia sales tax depends on two things: your assigned filing frequency and your state’s due dates.

How often will you file sales tax returns in Virginia?

States assign you a filing frequency when you register for your sales tax permit. In most states, how often you file sales tax is based on the amount of sales tax you collect from buyers in the state.

In Virginia, you will be required to file and remit sales tax either monthly or quarterly.

Virginia sales tax returns are always due the 20th of the month following the reporting period. If the filing due date falls on a weekend or holiday, sales tax is generally due the next business day.