As an e-commerce seller, you will need to collect sales tax in Virginia if you have:
(1) Exceed $100,000 in gross retail sales or 200 or more transactions in Virginia during the previous or current calendar year (economic nexus), or
(2) Physical presence in Virginia (physical nexus).
Below, we will highlight some of the basic provisions of Virginia sales tax law.
What is the tax rate range for Virginia?
State: Virginia’s general sales tax rate is 5.3%.
Local: Local jurisdictions can range from 0% to 1.7%.
The state rate on groceries and certain personal hygiene items is 1%.
Do you have physical or economic nexus in Virginia?
Physical nexus. Certain business activities create physical nexus in Virginia. If you have physical nexus, you are required to collect and remit sales tax on all taxable sales that are shipped to Virginia. Examples of business activities that can create physical nexus in Virginia include:
- An office or place of business
- An employee or contractor present in the state
- Inventory or goods in a warehouse
- Ownership of personal property
- Leased property
Economic nexus. Virginia recognizes economic nexus for any vendor with more than $100,000 in gross retail sales or 200 or more transactions into the state during the previous or current calendar year.
Sales you make through a marketplace are not included in the total
Once you have economic nexus established, you will be obligated to collect sales tax from buyers in the state within 30 days.
If all of your sales in Virginia are conducted through a marketplace facilitator’s platform, you generally do not need to register to collect Virginia sales tax.
What are examples of sales of taxable items?
- Tangible personal property, unless an exemption applies
- Certain services
- Food for home consumption and certain personal hygiene items are taxed at a state rate of 1% rate.
- What are examples of sales of nontaxable/exempt items?
- Over-the-counter and prescription drugs and medicines
- Gun safes cost $1,500 or less
- Software as a Service (SaaS)
Are there any sales tax holidays?
Virginia recognizes an annual sales tax holiday in August. This holiday eliminates sales tax on qualifying school supplies, clothing, footwear, and hurricane / emergency preparedness items.
Is Virginia a member of the SST (Streamlined Sales Tax)?
Currently, Virginia is not a full or associate member of the Streamlined Sales Tax Governing Board (SSTGB).
How to get a sales tax permit / links to register in this state?
You can register online at: Virginia Tax Online Services for Business (VATax).
For more information on Virginia rates, see: Virginia Retail Sales and Use Tax Page