Virginia sales tax, Virginia use tax, Virginia sales tax nexus, Virginia sales tax returns, Virginia exemption certificates, taxability of goods or services in Virginia, or any request involving Virginia state-level consumption taxes.
Written by the OpenAccountants team. Written by the OpenAccountants team from the official sources it cites.
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Northern Virginia jurisdictions
Northern Virginia jurisdictions (6.0%): Arlington, Fairfax, Loudoun, Prince William counties; cities of Alexandria, Fairfax, Falls Church, Manassas, Manassas Park.
Hampton Roads jurisdictions
Hampton Roads jurisdictions (7.0%): Chesapeake, Hampton, Isle of Wight, James City, Newport News, Norfolk, Poquoson, Portsmouth, Suffolk, Virginia Beach, Williamsburg, York.
Intrastate sales sourcing
Intrastate sales: Sourced to the seller's location for over-the-counter sales. For shipped goods, sourced to the destination.
Interstate sales sourcing
Interstate sales (remote sellers): Destination-based.
Delivered sales sourcing
Delivered sales: Destination-based (the delivery address determines the rate).
General rule
Virginia sales tax applies to the retail sale, lease, or rental of tangible personal property and certain enumerated services.Va. Code Section 58.1-603
Grocery food before 2023
Before Jan 1, 2023: Grocery food was taxed at 2.5% (1.5% state + 1% local).HB 90 / SB 451 (2022 Session); Va. Code Section 58.1-611.1
Grocery food after 2023
After Jan 1, 2023: Grocery food is taxed at 1% (0% state + 1% local only).
Regional grocery food removal
In regional tax areas, the regional component is also removed from grocery food.Va. Code Section 58.1-611.1
Prepared food not reduced rate
Prepared food remains taxable at the full applicable rate.Va. Code Section 58.1-611.1
Food purchased for human consumption
The definition of "food purchased for human consumption" follows Va. Code Section 58.1-611.1 and generally aligns with the federal SNAP definition.Va. Code Section 58.1-611.1
SaaS treated as TPP
Virginia has broadly interpreted its definition of tangible personal property to include electronically delivered software.Virginia Tax Ruling PD 19-55; Public Document 19-45
SaaS as taxable lease
SaaS is treated as a subscription to use software, which Virginia considers a taxable lease of TPP.Virginia Tax Ruling PD 19-55; Public Document 19-45
SaaS access method irrelevant
The tax applies regardless of whether the software is accessed via browser or app.Virginia Tax Ruling PD 19-55; Public Document 19-45
IaaS/PaaS unclear
Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) taxability is less clear and should be evaluated on a case-by-case basis.Virginia Tax Ruling PD 19-55; Public Document 19-45
Registration requirement
All sellers with nexus in Virginia must register with Virginia Tax before making taxable sales. Registration is completed through the Virginia Tax Online portal.Va. Code Section 58.1-613
No quarterly/annual filing
Virginia does not offer quarterly or annual filing options for general sales tax filers (unlike many states). All registrants file monthly.
Form ST-9 primary return
Form ST-9 (Retail Sales and Use Tax Return) is the primary return.
Return covers state and local
The return covers both state and local taxes (the local 1% is reported and remitted with the state return).
Electronic filing required
Electronic filing is required for all filers.
Payment due date
Payment is due on the same date as the return (20th of the following month).
Dealer's discount retention
Dealers may retain the greater of $0 or an amount computed as follows: On collections of the first $62,500 of taxable sales: 1.6% of tax due.Va. Code Section 58.1-622
Maximum discount
The maximum discount is approximately $53 per month (for monthly filers with sufficient sales volume).Va. Code Section 58.1-622
Discount timely filing condition
The discount is available only if the return is filed and payment is made on time.Va. Code Section 58.1-622
No prepayment requirement
Virginia does not require sales tax prepayments (unlike some states that require estimated payments mid-month for large filers).
Valid certificate requirements
Valid exemption certificates must contain: 1. Purchaser name and address. 2. Virginia sales tax registration number (for resale). 3. Nature of the exemption claimed. 4. Description of property being purchased. 5. Purchaser's signature. 6. Date of certificate.
Certificate valid on its face
The certificate must appear valid on its face.Va. Code Section 58.1-623(C)
Purchase consistent with exemption
The purchase must be consistent with the claimed exemption.Va. Code Section 58.1-623(C)
Knowledge of invalid exemption
If the seller has knowledge that the exemption is invalid, good faith does not apply.Va. Code Section 58.1-623(C)
Exemption certificate retention period
3 years
Uncollected seller tax
Property is purchased from a seller who did not collect Virginia tax.
Resale property withdrawn for use
Property purchased for resale is withdrawn for personal/business use.
Out-of-state purchase brought into VA
Property is purchased in another state and brought into Virginia for use.
Use tax rate equals sales tax rate
The use tax rate equals the applicable sales tax rate (5.3%, 6.0%, or 7.0% depending on region).
Credit for taxes paid to other states
Virginia allows a credit for sales/use tax properly paid to another state, up to the amount of Virginia use tax that would be due.Va. Code Section 58.1-611
Business use tax reporting
Businesses: Report on Form ST-7 (Consumer Use Tax Return) or Form ST-9.
Individual use tax reporting
Individuals: Report on Virginia individual income tax return (Form 760).
Place of business
Place of business (office, store, warehouse) in Virginia.
Employees or agents
Employees or agents operating in Virginia.
Inventory stored in Virginia
Inventory stored in Virginia (including FBA).
Regular delivery via company vehicles
Regular delivery via company vehicles.
Affiliate nexus
Affiliate nexus (related entities with physical presence).
Marketplace facilitators must collect
Marketplace facilitators meeting the nexus thresholds must collect and remit.Va. Code Section 58.1-612(D)
Marketplace sellers relieved
Marketplace sellers are relieved of collection obligation for facilitated sales.Va. Code Section 58.1-612(D)
Marketplace facilitator definition
A marketplace facilitator is defined as a person who facilitates a retail sale by listing or advertising, collecting payment, and/or transmitting payment to the marketplace seller.Va. Code Section 58.1-612(D)
1
NEVER apply a flat 5.3% rate statewide -- check whether the address is in Northern Virginia (6.0%), Hampton Roads (7.0%), or the rest of Virginia (5.3%).
2
NEVER advise that grocery food is fully exempt from sales tax in Virginia -- it is taxed at a reduced rate of approximately 1% (local component only, after the Jan 2023 change).
3
NEVER advise that SaaS is not taxable in Virginia (it is taxable per DOR rulings).
4
NEVER tell a seller they can file quarterly in Virginia -- Virginia requires monthly filing for all registrants.
5
NEVER confuse Virginia's mandatory 1% local tax with optional local taxes -- every Virginia transaction includes the 1% local component.
6
NEVER apply the grocery food reduced rate to prepared food or restaurant meals.
7
NEVER advise that over-the-counter drugs are taxable in Virginia (they are exempt).
8
NEVER assume motor vehicle tax is collected by the seller -- it is collected by DMV at titling.
9
NEVER ignore the data center exemption for qualifying purchases -- it is a significant incentive.
10
NEVER provide Virginia tax guidance without specifying which regional rate applies to the customer's location.
Data center capital investment threshold
Qualifying data centers that make a capital investment of at least $150 million (or lower thresholds in certain localities) and create a minimum number of jobs are exempt from sales tax on computer equipment and hardware purchased for use in the data center.Va. Code Section 58.1-609.3(18)
Electricity exemption extension
The exemption also extends to electricity purchased for use in the data center.Va. Code Section 58.1-609.3(18)
VEDP application required
Application and approval through Virginia Economic Development Partnership (VEDP) required.Va. Code Section 58.1-609.3(18)
Low to high rate shipment
A seller located in a 5.3% jurisdiction shipping to Hampton Roads (7.0%) must charge 7.0%.
High to low rate shipment
A seller in Hampton Roads shipping to a 5.3% jurisdiction charges 5.3%.
Pick-up orders
For pick-up orders, the seller's location rate applies.
DMV collects at titling
Motor vehicles are subject to the standard sales tax rate, but tax is collected by the DMV at the time of titling, not by the dealer.
Trade-in allowances
Trade-in allowances reduce the taxable base.
Historical cap on motor vehicle tax
The maximum sales tax on motor vehicles was capped historically, but check current law.
Raw materials and components
Raw materials and components that become part of the finished product.Va. Code Section 58.1-609.3
Machinery and tools
Machinery and tools used directly in manufacturing.Va. Code Section 58.1-609.3
Fuel used directly in manufacturing
Fuel used directly in manufacturing (not heating).Va. Code Section 58.1-609.3
Pollution control equipment
Pollution control equipment.Va. Code Section 58.1-609.3
Government entity exemption
Virginia exempts purchases by federal and state government entities.Va. Code Section 58.1-609.11
501(c)(3) exemption application
Qualifying 501(c)(3) nonprofit organizations may apply for an exemption certificate.Va. Code Section 58.1-609.11
Exemption not automatic
The exemption is not automatic -- nonprofits must apply to Virginia Tax and receive a certificate.Va. Code Section 58.1-609.11
Churches generally exempt
Churches are generally exempt without needing to apply.Va. Code Section 58.1-609.11
Occasional sale threshold
Three or fewer sales in a 12-month period qualify.Va. Code Section 58.1-602 (definition of "occasional sale")
Excluded items from casual sale exemption
Motor vehicles, watercraft, and aircraft are not eligible for the casual sale exemption.Va. Code Section 58.1-602 (definition of "occasional sale")
School supplies threshold
School supplies ($20 or less per item): exempt.Va. Code Section 58.1-611.2
Clothing and footwear threshold
Clothing and footwear ($100 or less per item): exempt.Va. Code Section 58.1-611.2
Energy-efficient products threshold
Energy-efficient products (qualifying Energy Star products, $2,500 or less): exempt.Va. Code Section 58.1-611.2
Emergency preparedness items
Hurricane and emergency preparedness items: exempt.Va. Code Section 58.1-611.2
Rendered from the canonical facts model. General reference only — confirm with a qualified professional before acting.
Skill Metadata
| Field | Value |
|---|---|
| Jurisdiction | Virginia, United States |
| Jurisdiction Code | US-VA |
| Tax Type | Retail Sales and Use Tax |
| Standard Rate | 5.3% (4.3% state + 1% local mandatory) |
| Regional Rates | 6% in Northern Virginia and Hampton Roads (additional 0.7% regional) |
| Hampton Roads Rate | 7% (additional 1.7% total regional component) |
| Primary Legal Framework | Code of Virginia, Title 58.1, Chapter 6 (Section 58.1-600 et seq.) |
| Key Statute | Va. Code Section 58.1-603 (Imposition of tax) |
| Governing Body | Virginia Department of Taxation (Virginia Tax) |
| Filing Portal | Virginia Tax Online Services -- https://www.tax.virginia.gov |
| Economic Nexus Effective Date | July 1, 2019 |
| SST Member | No |
| Contributor | Open Accounting Skills Registry |
| Validated By | Pending -- requires US CPA or Enrolled Agent sign-off |
| Validation Date | Pending |
| Skill Version | 1.0 |
| Confidence Coverage | Tier 1: rate lookups, basic nexus, standard taxability. Tier 2: regional rate determinations, grocery food reduced rate, SaaS classification, multi-jurisdiction issues. Tier 3: audit defense, penalty abatement, administrative appeals. |
| Format | Restructured to Q1 execution format, April 2026 |
Every rule in this skill is tagged with a confidence tier:
Client Onboarding Questions
| # | Question | Why It Matters |
|---|---|---|
| 1 | Do you have a Virginia sales tax registration / tax ID? | Determines whether registration is needed before filing. |
| 2 | What is your current filing frequency (monthly / quarterly / annually)? | Controls which return periods to prepare. |
| 3 | What is your nexus type -- physical presence, economic nexus, or both? | Determines registration obligations and applicable rules. |
| 4 | Are you a marketplace seller (selling through Amazon, Etsy, etc.)? | Marketplace facilitator may already be collecting on your behalf. |
| 5 | What types of products or services do you sell in Virginia? | Drives taxability classification under Virginia law. |
| 6 | Do you sell to exempt entities (government, nonprofits, resellers)? | Determines whether exemption certificates must be collected and retained. |
| 7 | Do you have locations, employees, or inventory in Virginia? | Physical presence creates nexus independent of economic thresholds. |
| 8 | Do you sell into multiple Virginia local jurisdictions? | Local tax rates vary; determines compliance complexity. |
If the client cannot answer questions 1-4, STOP and gather this information before proceeding. [T1]
Standard Rate Composition
| Component | Rate | Authority |
|---|---|---|
| State tax | 4.3% | Va. Code Section 58.1-603 |
| Local tax (mandatory statewide) | 1.0% | Va. Code Section 58.1-605 |
| Standard combined rate | 5.3% |
Virginia's sales tax has a mandatory local component built into the rate structure, unlike most states:
Regional Rates
| Region | Additional Rate | Total Rate | Authority |
|---|---|---|---|
| Northern Virginia (NOVA) | 0.7% (regional transport) | 6.0% | Va. Code Section 58.1-603.1 |
| Hampton Roads | 0.7% (regional transport) + 1.0% (additional regional) | 7.0% | Va. Code Section 58.1-603.1; HB 1414 (2020) |
| Central Virginia (Richmond metro) | 0.7% (regional transport) | 6.0% | Va. Code Section 58.1-603.1 |
| Rest of Virginia | None | 5.3% | Standard rate |
Virginia is generally an origin-based sourcing state for intrastate sales.
Important: Because Virginia has regional rate differences, the sourcing determination directly affects the rate. A seller in Northern Virginia (6%) shipping to Hampton Roads (7%) charges the 7% rate. [T1]
Taxability Matrix
| Item Category | Taxable? | Rate | Authority | Tier |
|---|---|---|---|---|
| General tangible personal property | Yes | Full rate | Va. Code Section 58.1-603 | [T1] |
| Grocery food (food for home consumption) | Reduced rate: 1% | 1% (state removed its 1.5% portion effective Jan 1, 2023; local 1% remains in some areas) | Va. Code Section 58.1-611.1 | [T1] |
| Prepared food (restaurant meals) | Yes | Full rate | Va. Code Section 58.1-603 | [T1] |
| Clothing and footwear | Yes | Full rate | No exemption | [T1] |
| Prescription drugs | Exempt | 0% | Va. Code Section 58.1-609.10(9) | [T1] |
| Over-the-counter drugs | Exempt | 0% | Va. Code Section 58.1-609.10(10) | [T1] |
| Durable medical equipment | Exempt (with prescription) | 0% | Va. Code Section 58.1-609.10(11) | [T1] |
| Motor vehicles | Yes | Full rate (but paid at DMV, not seller) | Va. Code Section 58.1-603 | [T1] |
| Gasoline and motor fuel | Exempt from sales tax (separate motor fuel tax) | N/A | Va. Code Section 58.1-609.10(3) | [T1] |
| Utilities (residential) | Exempt | 0% | Va. Code Section 58.1-609.1(4) | [T1] |
| Utilities (commercial) | Yes | Full rate | Va. Code Section 58.1-603 | [T1] |
| Industrial manufacturing materials | Exempt (for use in manufacturing) | 0% | Va. Code Section 58.1-609.3(2) | [T2] |
| Agricultural supplies | Exempt | 0% | Va. Code Section 58.1-609.2 | [T1] |
| Software -- canned (tangible medium) | Yes | Full rate | Va. Code Section 58.1-602 | [T1] |
| Software -- canned (electronic delivery) | Yes | Full rate | Virginia Tax Ruling 12-68 | [T2] |
| Software -- custom | Exempt | 0% | Va. Code Section 58.1-609.5(1) | [T2] |
| SaaS (Software as a Service) | Taxable | Full rate | Virginia Tax Ruling 19-45; PD 19-55 | [T2] |
| Digital goods (e-books, music, video) | Yes | Full rate | Virginia Tax Ruling | [T2] |
| Data processing services | Not taxable | 0% | Not enumerated | [T2] |
| Data center equipment | Exempt (qualifying data centers) | 0% | Va. Code Section 58.1-609.3(18) | [T2] |
Services Taxability
| Service | Taxable? | Authority |
|---|---|---|
| Repair and maintenance of TPP | Yes (labor + parts) | Va. Code Section 58.1-603 |
| Telecommunications services | Yes | Va. Code Section 58.1-602 |
| Hotel/lodging | Yes (plus local transient occupancy taxes) | Va. Code Section 58.1-603 |
| Professional services (legal, accounting) | No | Not enumerated |
| Personal services (haircuts, dry cleaning) | No | Not enumerated |
| Landscape services | No | Not enumerated |
| Construction services | No (materials taxable at purchase) | DOR guidance |
| Transportation/freight (separately stated) | Exempt | Va. Code Section 58.1-609.5(3) |
Filing Frequency
| Filing Status | Frequency | Due Date |
|---|---|---|
| Standard (all registrants) | Monthly | 20th of the following month |
| Seasonal filers | Monthly during active season | 20th of the following month |
Penalties and Interest
| Violation | Penalty | Authority |
|---|---|---|
| Late filing | 6% of tax due per month, up to 30% | Va. Code Section 58.1-635 |
| Late payment | 6% of tax due per month, up to 30% | Va. Code Section 58.1-635 |
| Failure to file | $10 minimum penalty per return | Va. Code Section 58.1-635 |
| Underpayment (negligence) | Additional 6% | Va. Code Section 58.1-635 |
| Fraud | 100% of tax deficiency | Va. Code Section 58.1-635 |
| Interest | Federal underpayment rate + 2% | Va. Code Section 58.1-15 |
Virginia Exemption Certificates
| Certificate | Use Case | Form |
|---|---|---|
| ST-10 (Sales and Use Tax Certificate of Exemption) | General exemption certificate (resale, exempt organizations) | Form ST-10 |
| ST-10A | Manufacturing exemptions | Form ST-10A |
| ST-11 | Certificate of exemption for government entities | Form ST-11 |
| ST-12 | Industrial manufacturing/processing exemption | Form ST-12 |
| ST-13 | Contractor's exemption certificate | Form ST-13 |
| ST-13A | Government contractor exemption | Form ST-13A |
| Streamlined (SSTCE) | Multi-state (accepted) | SSTCE form |
Virginia relieves sellers of liability when they accept exemption certificates in good faith. However, the seller must exercise reasonable care:
Economic Nexus (Va. Code Section 58.1-612(C))
| Threshold | Value | Measurement Period |
|---|---|---|
| Revenue | $100,000 in gross revenue from sales into Virginia | Current or prior calendar year |
| Transactions | 200 transactions delivered into Virginia | Current or prior calendar year |
| Test | OR -- either threshold triggers nexus |
Virginia enacted economic nexus effective July 1, 2019.
Virginia enacted marketplace facilitator legislation effective July 1, 2019 (concurrent with economic nexus).
Refer to Step 3 for filing frequencies and due dates. [T1]
Virginia exempts from sales tax the occasional sale of tangible personal property by a person not regularly engaged in the business of selling:
Unlike Maryland, Virginia does not impose a separate digital advertising tax. However, digital goods and SaaS remain subject to the standard sales tax. [T2]
Virginia holds an annual sales tax holiday (typically the first weekend in August):
Question: A retailer in Richmond (Central Virginia, 6.0% total) sells a $1,000 laptop. What is the sales tax?
Expected Answer: $1,000 x 6.0% = $60.00.
Question: A consumer buys $300 of groceries in Virginia Beach (Hampton Roads). What tax is due on the groceries?
Expected Answer: After Jan 1, 2023, grocery food is taxed at approximately 1% (local portion only). $300 x 1% = $3.00. The state and regional portions do not apply to grocery food.
Question: A Virginia company subscribes to a $500/month CRM SaaS product. Is Virginia sales tax due?
Expected Answer: Yes. Virginia taxes SaaS. At the applicable rate for the company's location (e.g., 5.3% in standard Virginia = $26.50/month; 6.0% in NOVA = $30.00/month; 7.0% in Hampton Roads = $35.00/month).
Question: An online retailer in Roanoke (5.3%) ships a $200 order to a customer in Arlington (NOVA, 6.0%). What rate applies?
Expected Answer: 6.0%. For shipped goods, Virginia uses destination-based sourcing, so the buyer's location rate applies. Tax = $200 x 6.0% = $12.00.
Question: An out-of-state seller made $50,000 in sales but 210 transactions into Virginia this year. Does the seller have nexus?
Expected Answer: Yes. Virginia uses an OR test. The seller exceeded the 200-transaction threshold, so economic nexus is triggered even though revenue is below $100,000.
Question: During Virginia's sales tax holiday in August, a customer buys a $90 pair of shoes and a $110 jacket. Which items qualify?
Expected Answer: The $90 shoes qualify (under $100 threshold) and are exempt. The $110 jacket does NOT qualify (exceeds $100 per-item limit) and is taxable at the full applicable rate.
Question: A Virginia Beach (7.0%) resident buys a $2,000 piece of furniture online from a seller who charges 4% sales tax (from another state). What Virginia use tax is owed?
Expected Answer: Virginia use tax at 7.0% = $140. Credit for tax paid to other state: $2,000 x 4% = $80. Net Virginia use tax owed: $140 - $80 = $60.
Reviewer Escalation Protocol
| Trigger | Action |
|---|---|
| Any [T3] tagged item encountered | STOP. Do not guess. Escalate to licensed CPA, EA, or tax attorney. |
| Client has audit notice or assessment | Escalate immediately. Do not advise on audit response. |
| Multi-state nexus question involving 3+ states | Flag for senior reviewer with multi-state experience. |
| Penalty abatement or voluntary disclosure | Escalate to licensed professional with state-specific experience. |
| Ambiguous taxability of a product/service | Present both interpretations to reviewer with supporting authority. |
This skill and its outputs are provided for informational and computational purposes only and do not constitute tax, legal, or financial advice. Open Accountants and its contributors accept no liability for any errors, omissions, or outcomes arising from the use of this skill. All outputs must be reviewed and signed off by a qualified professional (such as a CPA, EA, tax attorney, or equivalent licensed practitioner in your jurisdiction) before filing or acting upon.
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