Virginia Sales Tax on Services, Installation, etc Virginia: Sales Tax Handbook


What purchases are taxable in Virginia?

The taxability of various transactions (like services and shipping) can vary from state to state, as do policies on subjects such as whether excise taxes or installation fees included in the purchase price are also subject sales tax. This reference is here to help answer your questions about what is and is not subject to the Virginia sales tax.

Section 1: Taxability of Goods and Services

What transactions are generally subject to sales tax in Virginia?

In the state of Virginia, legally sales tax is required to be collected from tangible, physical products being sold to a consumer. Several exceptions to this tax are certain types of protective clothing, certain assistive medical devices, learning institute's textbooks, and software and data center equipment.

Are services subject to sales tax in Virginia?

Virginia does not usually collect sales taxes on services. However, services which considered part of the physical merchandise purchased, as valued is money or in (such as setup of a purchased piece of machinery)seen as being taxable.

Some services are entirely taxable. For instance. The typesetting service is subject to taxation, as is gift and package wrapping services, diaper service, tuxedo rentals, the purchase pf packaged or canned program, limousine service and including several other services.

You can find a table describing the taxability of common types of services later on this page.


Are shipping & handling subject to sales tax in Virginia?

in Virginia, it can be slightly complicated to discover if the shipping and handling of your package is taxable.

Essentially, if the shipping and handling charges are separately stated on the invoice, they are not considered to be legally taxable. However, it must be noted that if the charges are not stated separately, but together on the invoice, then the charge for these services are indeed considered to be taxable. In some cases, this means that whether or not the charge is taxed is at the discretion of the seller.


Are drop shipments subject to sales tax in Virginia?

"Drop shipping" refers to the common business practice in which a vendor, often in a different state, makes a sale of a product which is shipped to the end-user by a third party supplier hired by the initial vendor. In Virginia, drop shipments are generally subject to state sales taxes.


Section 2: Taxability of Various Items in Virginia

This table shows the taxability of various goods and services in Virginia. If you are interested in the sales tax on vehicle sales, see the car sales tax page instead. Scroll to view the full table, and click any category for more details.

Category Exemption Status
Amazon Purchases
Products on TAXABLE *
General Clothing TAXABLE *
Food and Meals
Catering TAXABLE *
Grocery Food TAXABLE *
Leases and Rentals
Motor Vehicles TAXABLE *
Tangible Media Property TAXABLE
Manufacturing and Machinery
Machinery EXEMPT
Raw Materials EXEMPT
Utilities & Fuel EXEMPT
Medical Goods and Services
Medical Devices EXEMPT
Medical Services EXEMPT
Medicines EXEMPT
Newspapers and Magazines
Newspapers TAXABLE *
Periodicals TAXABLE *
Occasional Sales
General Occasional Sales EXEMPT *
Motor Vehicles EXEMPT *
Optional Maintenance Contracts
General Optional Maintenance Contracts EXEMPT *
Parts Purchased for Use in Performing Service Under Optional Maintenance Contracts EXEMPT
Pollution Control Equipment
General Pollution Control Equipment TAXABLE *
Janitorial Services EXEMPT
Transportation Services EXEMPT *
Software and Digital Products
Canned Software - Delivered on Tangible Media TAXABLE *
Canned Software - Downloaded EXEMPT *
Custom Software - Delivered on Tangible Media EXEMPT *
Custom Software - Downloaded EXEMPT *
Customization of Canned Software TAXABLE *
Digital Products EXEMPT
General Trade-Ins EXEMPT
Vending Machine Sales
Merchandise TAXABLE *

* See notes in category taxability page for details

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