Virginia is an origin-based state (sales are taxed where the seller is located).
Businesses are required to file and pay taxes online. You have 3 options to do this:
The sales tax rate is 5.3% (4.3% state tax and 1% local tax).
For Northern Virginia and Hampton Roads: an additional 0.7% state tax is imposed, making the rate in these areas 6% (5% state tax and 1% local tax).
For food purchased for home consumption the rate is 2.5% (1.5% state, 1% local). This reduced rate only applies to grocery items and cold prepared foods packaged for home consumption (not hot prepared foods sold for immediate consumption).
Businesses that serve food are not eligible for the reduced rate when:
Because food sold by most fast food establishments and restaurants does not qualify for the reduced rate due to the 80% rule, it is not necessary to keep separate records for take-out orders.
More information on food that qualifies for the tax rate reduction.
If you’re an out-of-state seller who has nexus in Virginia, you must register with Virginia to collect Use Tax on Virginia sales. Once your business is registered with Virginia, you must file a monthly return by the 20th of the month after the sale. Also, you must file even when you have no sales to report.
As an out-of-state seller, you file Form ST-8.
These foods qualify for the tax rate reduction.
Both the return and payment are due on the 20th of the month following the filing period. Filing frequency is monthly, but the state may notify you and change your filing frequency to quarterly depending on your tax liability.
You will register your business with the state of Virginia by completing a registration application online. The state will issue a Certificate of Registration (From ST-4) which must be displayed at your place of business.
Interest is charged and penalties are assessed for underpayment, late filing, and late payment as follows:
When you file a late return online, penalties and interest are automatically calculated.