Virginia Sales Tax Guide

In addition to Virginia’s sales and use tax, the state has several other taxes, including a motor vehicle rental tax, peer-to-peer vehicle rental tax, and a food tax.

Sales and use tax

Virginia’s sales tax structure is a bit different from most other states. Most of state has a 5.3-percent sales and use tax rate. However, the following jurisdictions have their own tax rates:

7 Percent

• James City County.
• Williamsburg.
• York County.

6.3 Percent

• Charlotte County.
• Gloucester County.
• Halifax County.
• Henry County.
• Northampton County.
• Patrick County.

6 Percent

• Alexandria.
• Arlington.
• Charles City.
• Chesapeake.
• Chesterfield.
• Fairfax City.
• Fairfax County.
• Falls Church.
• Franklin.
• Goochland.
• Hampton.
• Hanover.
• Henrico.
• Isle of Wight.
• Loudoun.
• Manassas.
• Manassas Park.
• New Kent.
• Newport News.
• Norfolk.
• Poquoson.
• Portsmouth.
• Powhatan.
• Prince William.
• Richmond City.
• Southhampton.
• Suffolk.
• Virginia Beach.

Alcoholic beverage taxes, non-food, and beverage items

In most regions in Virginia, retailers must add the 5.3-percent sales tax to wines and distilled spirits. Additionally, distilled spirits have a 20 percent state tax built into the retail price, and wine has a 4-percent state tax plus a $0.40 per liter wine tax built into the retail pricing.

Furthermore, the state levies a 2.5-percent sales tax on non-alcoholic beverage items. The retailer must add this tax at the register. A 5.3-percent sales tax is levied on non-food and beverage items in regions not mentioned below. This tax is also added at the register.

Instead of the 5.3-percent sales tax, the following regions have their own sales tax that retailers must add for retail sales of alcoholic beverages:

• Northern Virginia and Hampton Roads regions: 6 percent on wines and distilled spirits.
• Halifax County: 6.3 percent on wines and distilled spirits.
• The Historic Triangle: 7 percent on wines and distilled spirits.
• Northern Virginia and Hampton Roads regions: 6 percent on non-food and beverage items.

Automobile rental surcharge tax

Motor vehicle rental companies must add Virginia’s motor vehicle rental taxes to any vehicle rented for less than 12 months. The taxes are as follows:

• Rental of any vehicle weighing 26,000 pounds or less: 4 percent.
• Rental of any vehicle, regardless of weight, except motorcycles and mobile homes: 4 percent.
• Rental fee on any vehicle, regardless of weight, except motorcycles and mobile homes: 2 percent.

Businesses renting motor vehicles must collect all three taxes for a total of 10 percent. Exempt charges include:

• Pass-through charges.
• Violations, citations, fines, penalties, and fees.
• Transportaion charges.
• Delivery, pickup, drop, and recover charges.
• Refueling charges.
• Third-party service charges.

Businesses can register to pay motor vehicle rental taxes online or by using tax form R-1, Business Registration Application.

Peer-to-peer rentals, such as Uber or Lyft, file Form P2P tax return. If the platform has more than 10 vehicles registered to the business, the rental rates are the same as the motor vehicle rental rates above. Businesses with 10 or fewer vehicles registered to their platform pay a 7-percent tax.

Businesses must file online or request an electronic filing waiver request.

Soft drink excise tax

A business that has yearly gross receipts of:

• $100,000 or less: $50.00
• $100,001 through $250,000: $100.00
• $250,001 through $500,000: $250.00
• $500,001 through $1,000,000: $750.00
• $1,000,001 through $3,000,000: $1,500.00
• $3,000,001 through $5,000,000: $3,000.00
• $5,000,001 through $10,000,000: $4,500.00
• $10,000,000 through $25,000,000: $7,200

Food and personal hygiene

Business taxpayers in all areas of Virginia must collect and pay 2.5 percent sales tax on food and personal hygiene items.

Beer and wine cooler taxes

Virginia levies a tax on beer and wine coolers at the per barrel rate. The tax is paid by the bottler, manufacturer, or wholesaler upon the sale to licensed retailers. The taxes are as follows:

• $0.2565 per barrel of beer or wine cooler.
• $0.02 per bottle on bottles that are 7 or fewer ounces.
• $0.0265 on bottles of beer and wine coolers that are more than 7 ounces to 12 ounces.
• $0.0222 mills per ounce per bottle on bottles larger than 12 ounces.

The tax does not apply to beer and wine coolers that are shipped out of state for resale in another state or products sold to the United States Government, Department of Veterans Affairs, post exchanges for the United States Armed Forces, and otherwise exempt organizations.

Motor fuel taxes

Most consumers do not see the motor fuels taxes as the taxes are levied when the fuels leave the terminal rack. The state also has a storage tank fee. The following tax rates are per gallon:

• Gasoline: 26.2 cents.
• Diesel: 27 cents.
• Blended fuels – Gasoline: 26.2 cents.
• Blended fuels – Diesel: 27 cents.
• Aviation fuel: 26.2 cents.
• Alternative fuels: 26.2 cents.
• Storage Tank Fee: 0.2 cents.

Additionally, a wholesale sales tax of 2.1 percent is levied on fuels sold in Northern Virginia and the Hampton Roads Planning District Commission area.

Telecommunications tax

Virginia levies a communications sales tax and additional taxes for telecommunications services, including:

• 5 percent communications sales tax.
• $0.75 E-911 fee for landlines and Voice Over Internet Protocol phones.
• $0.94 postpaid wireless E-911 tax for mobile phones.
• $0.63 prepaid wireless E-911 tax for mobile phones.
• $1.60 for right-of-way fees for cable TV franchises and landline phones.

Miscellaneous taxes on agriculture

Virginia has several agriculture taxes, including:

• Apple excise tax: 2.5 cents per tree run bushel for apples sold in Virginia. The apple farmer is liable for the tax. The tax is levied on producers who market at least 5,000 tree-run bushels per calendar year.
• Cattle assessment: $0.50 per head for the sale of all calves or cattle. The assessment does not apply to the sale of dairy cows used for milking, animals that sell less than $100 per head, or cattle weighing 99 or fewer pounds. The business that conducts the sale deducts the assessment from the farmer.
• Corn: $0.01 per bushel grown to sell in Virginia. The processor, shipper, dealer, exporter, or country buyer deducts the assessment from the farmer.
• Cotton: $0.95 per bale sold in Virginia. The gin company deducts the assessment from the farmer.
• Eggs: $0.05 per case of shell eggs (30 dozen) or $0.11 per hundred pounds of liquid eggs. The handler that sells less than 500 cases per year is exempt from the assessment. Handlers selling eggs to other handlers are also exempt.
• Forest products: The first manufacturer, except small servers, pays the forest products tax. If there is no handler, the severer pays the tax. Tax rates vary based on the type of lumber.
• Peanut excise tax: $0.25 on every 100 pounds grown and sold in Virginia to a processor. The processor pays the tax.
• Sheep: $0.50 per head sold in Virginia. The handler deducts the tax from the farmer.
• Small grains assessment: One-half of one percent of the price per bushel produced in Virginia. The handler deducts the assessment from the amount paid to the farmer.
• Soybeans: One-half of one percent of the net market value of soybeans purchased. The business or person who buys the soybeans first from the farmer collects the tax from the farmer.