Most tangible personal property is subject to sales tax. However, some necessities like food, clothing and medication are not taxable in some states. And sometimes states consider things like digital goods (eBooks, music, movies) and software-as-a-service (SaaS) taxable even though they can’t be touched or held.
Here’s how Virginia taxes the most commonly sales tax exempt items:
Do I need a Virginia sales tax permit if I’m only a wholesaler?
Contact Virginia Tax to inquire about sales tax registration for wholesalers.
Do I need a Virginia sales tax permit if I only sell temporarily in the state?
Yes. Virginia requires that all retailers making sales in the state register for a sales tax permit, even if the sales are only temporary such as through a flea market or trade show.
How to Collect Sales Tax in Virginia
How to Collect Sales Tax on Intrastate Virginia Sales
A sale is considered “intrastate” if the buyer and seller are both located in Virginia, or if the buyer is in Virginia and the item ships from a location (a store, warehouse, etc.) in Virginia.
Virginia is an “origin-based” sales tax sourcing state. This means that if you make a sale originating in Virginia and the buyer’s ship-to address is also in Virginia you would charge the sales tax rate at the sale’s origination point.
Example: Your business is located in Abingdon, Virginia and you make a sale to a buyer in Virginia Beach, Virginia. You’d charge the buyer the sales tax rate at your Abingdon location.
How to Collect Sales Tax on Interstate Virginia Sales
A sale is considered “interstate” if the item ships from outside Virginia and the seller isn’t otherwise “engaged in business” in the state.
For sales that don’t originate in Virginia, you’d charge the sales tax rate at your buyer’s location.
Example: Your business is located in Ely, Nevada and you make a sale to a buyer in Alexandria, Virginia. You’d charge the buyer the Alexandria sales tax rate.
Should you collect sales tax on shipping charges in Virginia?
No. Shipping charges are not subject to Virginia sales tax as long as they are separately stated from the price of the item(s) sold.