Virginia's corporate income tax has not been raised in forty years, since 1972. At 6 percent, our rate is one of the lowest in the nation. In Virginia, items taxed at the state level are not taxed at the local level, with the exception of the sales and use tax levied by both state and local governments. The combined state and local sales tax is either 5.3 or 6 percent depending upon the locality. Virginia also differs from most states in that its counties and cities are separate taxing entities. A company pays either county or city taxes depending upon its location. If the company is located within the corporate limits of a town, it is subject to town and county levies.
Virginia's long tradition of fiscal discipline has earned the Commonwealth a coveted AAA bond rating, reaffirmed by Moody's, Fitch, and Standard & Poor's in January 2013. In addition, Ernst & Young, in conjunction with The Council on State Taxation (COST), in 2011 deemed Virginia among the top 10 states with the lowest effective tax rates for new capital investments.
|Virginia||U.S. (Median)||South Atlantic (Median)|
|Corporate Income Tax||6.00%||6.75%||6.90%|
|Sales and Use Taxes:|
|State Tax||4.30% or 5.00%||6.00%||6.00%|
|State and Average Local Tax (combined)||5.30% or 6.00%||6.80%||6.04%|