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.
Contents1.) Taxability of Goods and Services
- General Virginia taxability guidelines
- Are services subject to sales tax?
- Is shipping & handling subject to sales tax?
- Are drop shipped items taxable?
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.Top
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.
|Products on Amazon.com||TAXABLE *|
|General Clothing||TAXABLE *|
|Food and Meals|
|Grocery Food||TAXABLE *|
|Leases and Rentals|
|Motor Vehicles||TAXABLE *|
|Tangible Media Property||TAXABLE|
|Manufacturing and Machinery|
|Utilities & Fuel||EXEMPT|
|Medical Goods and Services|
|Newspapers and Magazines|
|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 *|
|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 *|
|Vending Machine Sales|
* See notes in category taxability page for details
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