Virginia is a mid-ranged state regarding tax policies. They have income and business taxes, but low property taxes and don’t tax social security. Their tax rates are low, but the highest brackets start at low income levels. They are not too terrible, but not that great either.
State Taxes at a Glance – Virginia
| Type of Tax | 2023 |
|---|
| Individual Rates | 2.00% to 5.75% |
| Corporate / Business Tax Rates | 6.00% flat tax |
| Gross Receipts Tax | None |
| Sales Tax | 5.75% (average) |
| Property Taxes | 0.87% as a percentage of primary home |
| Estate or Inheritance Tax | None |
Income Taxes
Like most states with income tax, Virginia’s is calculated on a marginal scale whose range is from 2.0% to 5.75%. The highest bracket, 5.75%, starts at income above $17,000.
Business Taxes
The state of Virginia has a flat Corporate Tax rate of 6.0% for all Corporate Income. For other business entities that are flow-thru entities, such as S Corporations, Partnerships, LLCs, etc., since it flows-thru to the individual level, there is no business tax on those entities. In other words, the tax is accessed on C Corporations.
Gross Receipts Tax in Virginia
Similar to Washington, the state of Virginia also imposes a Gross Receipts tax called the Business, Professional and Occupational License Tax (BPOL). The BPOL tax rate is levied locally per jurisdiction. Therefore, some jurisdiction may not have the tax. Depending on your jurisdiction and NAICS code (industry your business is in), the tax ranges from.02% to .58% of Gross Receipts.
Sales Tax
Sales Tax – like many states, Virginia has multiple tax rates. One at the state level and another at the local level. The state rate is 5.30% the average local rate is .45% (total average rate for Virginia Sales Tax is 5.75%)
Property Taxes
Property Taxes in Virginia – the average property tax rate for residential property in the state of Virginia is 0.87%, making it an inexpensive place to own property.
DMV fees in Virginia
Virginia’s DMV fees are personal property taxes paid to your city or county. It is based on the value of the vehicle, so they are tax deductible. Here is a link to the Virginia DMV website so you can learn more.
Domicile in Virginia
If you maintain a permanent place of abode for over 183 days, in aggregate, you are considered a Virginia resident.
Social Security Benefits Tax in Virginia
Even though there is a state income tax in Virginia, they do not assess state income tax on social security benefits.
Payroll Taxes in Virginia
Unemployment taxes usually consist of three factors. They are the wage base, range of rates, number of schedules. Below is an outline of the three:
- Wage Base – Virginia has a wage base of $8,000
- UI Rates – range from 0.33% to 6.43%
- Schedules – Virginia has multiple rate schedules regarding UI rates
Virginia Business Entities – LLCs
Virginia is inexpensive to to set up your LLC. Here are some important facts:
- Virginia’s annual LLC fee is $50.
- When you register with the state, you pay a one time fee of $100
- Secretary of State of Virginia website – click here
Virginia Tax Contact Phone Numbers
Important phone numbers for the Virginia Department of Taxation:
- Website: www.tax.virginia.gov
- Phone# for Individuals – (804) 367-8031
- Phone# for Businesses – (804) 367-8037