Virginia State Tax Guide for Businesses & Individuals 2026
Virginia offers a competitive tax environment with a flat 6% corporate income tax rate, graduated individual income tax brackets, and a 5.3% state sales tax — making it a key state for businesses and individuals to understand their compliance obligations. This comprehensive Virginia state tax guide covers every major tax type for 2026, from nexus rules and income tax to payroll, property, and available credits. Visit filings.us/tax to automate your Virginia tax filings.
Quick Reference: Virginia Tax Rates at a Glance
| Tax Type | Rate / Detail |
|---|
| State Corporate Income Tax | 6.0% (flat) |
| State Individual Income Tax | 2.0% – 5.75% (graduated) |
| State Sales Tax Base Rate | 5.3% (4.3% state + 1% local share) |
| Average Combined Sales Tax | ~5.75% (state + local) |
| SUI/SUTA Rate Range | 0.10% – 6.20%; new employer: 2.53% |
| Effective Property Tax Rate | ~0.82% (average) |
| Estate / Inheritance Tax | No |
1. Virginia Business Tax Nexus
What is Tax Nexus in Virginia?
Nexus in Virginia means a business has a sufficient connection to the state that triggers tax obligations, including sales tax collection, income tax filing, and payroll withholding registration.
Physical Nexus
- Maintaining an office, store, warehouse, or other place of business in Virginia
- Having employees, agents, or independent contractors operating in Virginia
- Storing inventory in Virginia (including FBA fulfillment centers)
- Operating vehicles or equipment in Virginia
- Performing services or construction work in Virginia
Economic Nexus (Remote Sellers)
| Threshold Type | Amount |
|---|
| Sales Dollar Threshold | $100,000 in gross revenue into Virginia |
| Transaction Count Threshold | 200 or more separate transactions |
| Effective Date | July 1, 2019 |
Click-Through & Affiliate Nexus
Virginia enforces click-through and affiliate nexus. A retailer with an affiliate or referral agreement with a Virginia resident who earns a commission on sales exceeding $10,000 annually is considered to have nexus in the state.
2. Virginia State Income Tax
Corporate Income Tax
| Detail | Rate / Rule |
|---|
| Corporate Income Tax Rate | 6.0% (flat rate on Virginia taxable income) |
| Apportionment Formula | Single Sales Factor (100% sales) |
| Combined/Unitary Reporting | Not required; separate entity filing; water's-edge available |
| Minimum Tax | None (no minimum franchise tax) |
Individual Income Tax
| Taxable Income (All Filers) | Tax Rate |
|---|
| $0 – $3,000 | 2.0% |
| $3,001 – $5,000 | 3.0% |
| $5,001 – $17,000 | 5.0% |
| Over $17,000 | 5.75% |
| Deduction / Exemption | Amount |
|---|
| Standard Deduction (Single) | $8,000 |
| Standard Deduction (Married Filing Jointly) | $16,000 |
| Personal Exemption (Per Taxpayer) | $930 |
| Dependent Exemption (Per Dependent) | $930 |
| Federal Tax Code Conformity | Rolling conformity (updated annually) |
Filing Deadlines
| Filing Type | Due Date |
|---|
| Corporate Return (Form 500) | 15th day of the 4th month after fiscal year end (April 15 for calendar year) |
| Individual Return (Form 760) | May 1, 2026 |
| Extension Period | 6 months automatic (no form required if 90% of tax paid) |
| Estimated Payments (Individual) | May 1, June 15, September 15, January 15 |
| Estimated Payments (Corporate) | April 15, June 15, September 15, December 15 |
3. Virginia Sales Tax
State Sales Tax Rate
Virginia's state sales tax rate is 5.3% (comprising a 4.3% state rate plus a mandatory 1% local share). The average combined state and local rate is approximately 5.75%, making Virginia one of the lower combined sales tax states in the Southeast.
Taxable vs. Exempt Goods & Services
| Category | Status | Note |
|---|
| Tangible Personal Property | ✅ Taxable | All tangible goods unless specifically exempt |
| SaaS / Digital Products | ✅ Taxable | Digital products and electronically delivered software are taxable |
| Groceries / Food | ⚠️ Reduced Rate | Taxed at 1% state rate (reduced from 2.5% effective January 1, 2023) |
| Prescription Drugs | ❌ Exempt | Prescription drugs and medicines are exempt |
| Clothing | ✅ Taxable | All clothing taxable except during annual sales tax holiday |
| Manufacturing Equipment | ❌ Exempt | Machinery and tools used directly in manufacturing are exempt |
| Professional Services | ❌ Exempt | Most professional services are not subject to sales tax |
Sales Tax Permits & Registration
- Registering Agency: Virginia Department of Taxation — www.tax.virginia.gov
- Cost to Register: Free (no fee to obtain a sales tax permit)
- Renewal Requirement: No periodic renewal required; permit remains valid while business operates
Filing Frequency & Deadlines
| Annual Tax Liability | Filing Frequency | Due Date |
|---|
| Less than $100 per month | Annual | January 20 |
| $100 – $599 per month | Quarterly | 20th of the month following the quarter |
| $600 or more per month | Monthly | 20th of the following month |
Local Sales Tax Rates (Top 5 Jurisdictions)
| Jurisdiction | Local Rate | Combined Rate |
|---|
| Northern Virginia (NVTA region) | 1.7% | 6.0% |
| Hampton Roads (HRT region) | 1.7% | 6.0% |
| Richmond City | 1.0% | 5.3% |
| Virginia Beach | 1.0% | 5.3% |
| Roanoke City | 1.0% | 5.3% |
4. Virginia Payroll Tax & Compliance
Employer Payroll Tax Obligations
| Tax / Obligation | Rate / Detail |
|---|
| State Income Tax Withholding | 2.0% – 5.75% (graduated brackets; mandatory for all employers) |
| SUI/SUTA Rate Range | 0.10% – 6.20% |
| SUI Taxable Wage Base | $8,000 per employee per year |
| New Employer SUI Rate | 2.53% (non-construction); 6.43% (construction) |
| Workers' Compensation | Private insurance required; Virginia Workers' Compensation Commission oversees |
| Paid Family & Medical Leave | Not required (no state PFML program as of 2026) |
| State Disability Insurance | Not applicable |
Withholding Registration & Filing
- Registration Agency: Virginia Department of Taxation — www.tax.virginia.gov
- Filing Frequency: Semi-weekly (liability $1,000+/quarter), monthly ($100–$999/quarter), or quarterly (under $100/quarter)
- Annual Reconciliation Deadline: January 31 (Form VA-6)
- New Hire Reporting Deadline: Within 20 days of hire; report to the Virginia New Hire Reporting Center
Minimum Wage
| Category | Rate |
|---|
| Standard Minimum Wage | $12.41 per hour (effective January 1, 2026) |
| Tipped Employee Cash Wage | $2.13 per hour (federal tip credit applies) |
| Youth / Training Wage | $4.25 per hour (employees under 20 for first 90 days) |
| Next Scheduled Increase | January 1, 2027 (indexed to CPI) |
5. Virginia Property Tax
- Assessment Ratio: 100% of fair market value (full fair market value assessment)
- Effective Average Rate: ~0.82% of assessed value
- Assessment Cycle: Annual reassessment required in cities; every 2–4 years in counties
- Appeal Deadline: Within 3 years of the date of assessment or by December 31 of the year of assessment, whichever is later
Business Personal Property Tax
Virginia localities assess business personal property tax on machinery, equipment, furniture, and computers used in business. The form, rate, and filing deadline vary by locality. Most localities require filing by May 1 annually. There is no statewide exemption threshold; exemptions are set locally.
Homestead & Other Exemptions
| Exemption Type | Amount / Rate | Eligibility |
|---|
| Homestead Exemption | Up to $25,000 reduction in assessed value | Owner-occupied primary residence; varies by locality |
| Senior / Elderly Exemption | Partial or full exemption; locally determined | Age 65+ or permanently disabled; income/net worth limits apply |
| Veteran / Disabled Exemption | 100% exemption on primary residence | 100% service-connected disabled veterans or surviving spouse |
| Agricultural Land | Use-value assessment (lower than market value) | Land in active agricultural, horticultural, forest, or open-space use |
Property Tax Due Dates
| Installment | Due Date | Notes |
|---|
| Installment 1 | June 5 (most localities) | First half of annual tax bill |
| Installment 2 | December 5 (most localities) | Second half of annual tax bill |
| Early Payment Discount | None statewide; some localities offer 2% discount | Check with local treasurer's office |
6. Other Key Virginia Taxes
Franchise / Privilege Tax
Virginia does not impose a separate franchise or privilege tax on corporations. The 6% corporate income tax serves as the primary business tax. LLCs pay a $50 annual registration fee to the State Corporation Commission but are not subject to a separate franchise tax.
Gross Receipts Tax
Virginia does not impose a statewide gross receipts tax. However, localities may impose a Business, Professional, and Occupational License (BPOL) tax based on gross receipts, with rates varying by business category and locality (generally 0.05%–0.58%).
Excise Taxes
| Category | Rate |
|---|
| Gasoline | $0.302 per gallon |
| Diesel | $0.302 per gallon |
| Cigarettes | $0.60 per pack (20 cigarettes) |
| Beer | $0.2565 per gallon |
| Wine | $1.51 per gallon (table wine) |
| Cannabis | 21% retail excise tax (effective July 1, 2021) |
7. Virginia Tax Credits & Incentives
| Credit / Incentive | Value / Rate | Eligibility |
|---|
| Major Business Facility Job Tax Credit | $1,000 per job created | Businesses creating 100+ qualifying jobs in Virginia |
| Research & Development (R&D) Tax Credit | 15% of qualified R&D expenses (20% in HUBZones) | Businesses with Virginia-based R&D expenditures; $45M annual cap |
| Enterprise Zone Job Creation Grant | Up to $800 per job (non-retail) | Businesses located in designated Enterprise Zones creating new jobs |
| Port Volume Increase Tax Credit | $50 per 20-foot equivalent unit (TEU) | Companies increasing cargo shipments through Virginia ports by 5%+ |
| Historic Rehabilitation Tax Credit | 25% of qualified rehabilitation expenses | Certified historic structures in Virginia; residential and commercial |
| Green Job Creation Tax Credit | $500 per job (up to $175,000 per taxpayer) | Businesses creating jobs with average salary of $50,000+ in green industries |
| Worker Retraining Tax Credit | Up to 30% of retraining costs | Employers retraining employees at eligible Virginia institutions |
8. How to Register a Business in Virginia
- Choose a Business Structure: Select from LLC, corporation, partnership, or sole proprietorship based on liability and tax needs.
- Register with the State Corporation Commission (SCC): File Articles of Organization (LLC) or Articles of Incorporation (Corporation) at www.scc.virginia.gov. Filing fee: $100 (LLC), $75 (Corporation).
- Obtain an EIN from the IRS: Apply free at www.irs.gov. Required for all business entities with employees or multiple members.
- Register for State Tax Accounts: Register for income tax withholding, sales tax, and unemployment insurance through the Virginia Department of Taxation at www.tax.virginia.gov and the Virginia Employment Commission at www.vec.virginia.gov.
- Obtain Required Licenses and Permits: Check with the Department of Professional and Occupational Regulation (DPOR) for industry-specific licenses at www.dpor.virginia.gov.
- Register for a Local Business License (BPOL): File with your city or county commissioner of revenue for local business license and BPOL tax registration.
9. Key Virginia Tax Agencies & Resources
| Agency | Responsibility | Website |
|---|
| Virginia Department of Taxation | Corporate income tax, individual income tax, sales tax, withholding | www.tax.virginia.gov |
| Virginia Employment Commission (VEC) | Unemployment insurance (SUI/SUTA), new hire reporting | www.vec.virginia.gov |
| State Corporation Commission (SCC) | Business registration, LLC/corporation filings, annual reports | www.scc.virginia.gov |
| Virginia Tax Appeals | Tax appeals and dispute resolution | www.tax.virginia.gov/appeals |
Simplify Your Virginia Tax Compliance with Filings.us
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Note: This guide is for informational purposes only and does not constitute legal or tax advice. Consult a licensed tax professional for advice specific to your situation.
