Virginia: Sales Tax Handbook
What constitutes sales tax nexus in Virginia?
One of the more complicated aspects of Virginia sales tax law is sales tax nexus, the determination of whether a particular sale took place within the taxation jurisdiction of Virginia, and is thus subject to state (and possibly local) sales taxes.
If a vendor's transactions are determined to have nexus in Virginia, the vendor must register for a Virginia sales tax license and collect appropriate sales taxes from the buyer for all transactions with nexus in the state. On this page, we have compiled some of the most commonly needed facts about what constitutes sales tax nexus in Virginia.
Sales Tax Nexus in Virginia
Virginia law clearly states that any retailer who is labeled a "dealer" has tax nexus in Virginia.
According to Viginia law, "dealers" can be defined in many ways. In Virginia, a "dealer" is a person who: has a place of business or an office, stores merchandise in a warehouse, has any employees or independent contractors who are present within the state, owns a personal, leased, or real property, advertises goods or services(on billboards or in the newspaper for example), or if more than twelve deliveries of merchandise are made in Virginia by vehicles other than common carriers within one year.
For additional details on sales tax nexus law in Virginia, see the nexus information page from the Department of Taxation at http://law.lis.virginia.gov/vacode/58.1-612/
Taxation of Internet-Based Sales in Virginia
NOTE: 2018 Supreme Court Ruling Regarding Online Sales Taxes
In the 2018 Supreme Court case South Dakota vs. Wayfair Inc, Et Al., the court overturned a previous ruling that required a merchant to have physical nexus in order for a state to collect sales tax. This means that any state is now free to enforce collection of sales taxes on out-of-state online merchants. The information provided here may be subject to change, and many states are expected to begin collecting online sales taxes following this ruling.
Generally, Virginia does not charge sales tax on Internet-based transactions determined to have nexus within the state. This means that purchases from Amazon.com and other Internet-based retailers may be sales-tax-free. The state of Virginia has legislation which legally requires some remote sellers (those who utilize any sort of in-state facilities) to collect sales tax in the state. This law came into effect as of September 1, 2013.
The nexus status and taxability of Internet-based sales, by vendors and/or consumers within Virginia, have been the subject of hot debate in recent years. You can learn more on our introduction to Internet-based sales taxes.
Does my business have tax nexus in Virginia?
The folks at the sales tax compliance company Avalara are an approved Virginia sales tax partner, and you can use their free Virginia nexus wizard tool to determine whether or not your business has nexus, and is therefore required to pay Virginia sales taxes. If you're interested in automating your sales tax collection and filing process, click here to get more information.
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