Virginia's moderate corporate income tax has not been raised in more than thirty
years. At 6 percent, our rate is one of the lowest in the nation. The combined
state and local sales tax is 5.0 percent. Counties and cities are separate taxing
entities. Consequently, companies pay taxes to either a county or a city, not
to both. In some instances towns do assess local taxes which would be added
to county taxes.
Virginia's long tradition of fiscal discipline has earned the Commonwealth
a coveted AAA bond rating.
Corporate Income Tax
- Tax rate of 6%, not
raised in over thirty years
- Has a three-factor
apportionment formula of payroll, property and sales (with sales double-weighted)
- A double-weighted
sales factor, which has the effect of reducing tax liability for firms
with significant sales to customers outside Virginia
- Tax credits for job
creation and investment in economically stressed areas
- No franchise or net worth tax
Sales and Use Tax
- The total tax is
5 percent (4 percent state and 1 percent local)
- A seller is subject
to a sales tax on gross receipts derived from retail sales or leases of
taxable tangible personal property.
- Manufacturers do
not pay tax on purchases used for production; distributors do not pay
tax on items purchased for resale.
Click here for Virginia's Business Incentives.
Click here for A
Virginia Guide: Local Taxes On Business.
| TAX
COMPARISON |
| Taxes |
Rates |
|
Virginia |
U.S.
(Median) |
South
Atlantic
(Median) |
| Income Taxes: |
| Corporate Income Tax |
6.00% |
6.90% |
6.90% |
| Sales and Use Taxes: |
| State Tax |
4.00% |
5.30% |
5.00% |
State and Typical Local Tax (combined)
|
5.00% |
6.00% |
5.00% |
| Source: Research Institute of America, State
and Local Taxes: All States Tax Guide, 3/20/2007 and 5/15/2007 |
