How to Register for a Sales Tax Certificate in Virginia
Most businesses starting in Virginia that are selling a product or offering certain services will need to register for a sales tax certificate. This is commonly referred to as a seller’s permit, sales tax permit, sales tax license, sales tax number, or sales tax registration.
The sales tax certificate is obtained through the Virginia Department of Taxation as a part of the Virginia Business Registration Application. In addition to registering for the sales tax certificate, businesses can register for annual entity tax, employer withholding tax, or litter tax.
Check out the rest of this guide to find out who needs a sales tax certificate, what products and services are taxable, how to register for a permit, and reporting requirements.
Also See: Guide to Starting a Business in Virginia
Who needs a sales tax certificate in Virginia?
A business must register for a Virginia sales tax permit when:
- A business has an “economic nexus” (physical presence in the Commonwealth of Virginia) when they have a physical location like a retail store or office or uses a warehouse or fulfillment center to store inventory.
- Selling tangible personal property and/or taxable services in Virginia (includes occasionally selling items at craft shows, fairs, seminars, shows, etc.)
- Employees (including sales representatives or agents) are working in Virginia
- An online business located in Virginia is selling taxable products to Virginia residents
- A remote seller meets one of the following scenarios:
- Total annual sales of tangible personal property to Virginia residents of $100,000 or more; or
- Shipping 200 or more transactions to Virginia residents annually.
What products and services are taxable in Virginia?
There are a few exceptions, but almost all physical products are taxable when sold at retail in Virginia. Common examples include:
- General merchandise like furniture, appliances, and clothing
- Titled or registered items like vehicles
Digital products are tax exempt in Virginia.
Most services aren’t taxable in Virginia, however, there are a few exceptions, some of which include:
- Any services included in or in connection with the sale of tangible personal property;
- Any services in connection with the fabrication of tangible personal property (furniture
refurbishing, tailoring of clothing, etc.
- Any services in connection with the furnishing, preparing, or serving by a person meals or other tangible personal property (catering, meals served at bed and breakfasts, etc); and
- Short-term lodging
The Department of Taxation has more information regarding taxable services in Virginia.
How to register for a sales tax certificate in Virginia
A sales tax certificate can be obtained by registering online through the Virginia Division of Taxation’s site VATAX or by mailing in Form R-1.
Information needed to register includes:
- Business Name
- Federal Employer Identification Number (FEIN), or SSN if a sole proprietorship with no employees
- Type of business entity (Sole Proprietorship, Partnership, Corporation, Limited Liability Company LLC)
- Doing Business As (DBA) name
- Description of what products or services are being sold
- Primary business address and mailing address
- Contact information
- Names and addresses of owners/officers/members
- Anticipated date of first retail sale
- Seasonality of the business (if applicable)
Sales tax reporting
How is sales tax collected?
When a business makes a sale of a taxable product or service, the business charges the appropriate sales tax rate to the customer. This tax is collected by the business which is then sent to the Virginia Department of Taxation.
How much is sales tax in Virginia?
The sales tax rate that is charged varies depending on the address of the business if the purchase is made in the store. When shipping in-state, the sales tax is based on the address of the purchaser.
In addition to the statewide tax, there are additional sales taxes that may be added by cities and municipalities. To find sales tax rates, see the sales tax rate lookup from the Virginia Department of Taxation.
When are Virginia sales tax returns due?
The Department of Taxation will determine a filing frequency based on the expected volume of sales, which will be monthly or quarterly. Generally, a business collecting over $100 in sales taxes each month will file monthly.
Filings are due on the 20th day of the month following the reporting period, unless the 20th falls on a weekend or federal holiday, in which case would move to the next business day. A penalty and interest will apply if not filed by the due date.
Even if the business had no sales during the reporting period, a filing is still required indicating no sales occurred.
How much does a sales tax certificate cost in Virginia?
There is no cost for a sales tax certificate in Virginia.
How long does it take to get a Virginia sales tax certificate?
Expect 2-3 business days to receive a sales tax certificate when registering online or 2-3 weeks when applying by mail.
After registering, a Sales Tax Certificate of Registration (Form ST-4) and 15-digit sales tax account number will be sent. The certificate must be prominently displayed at each location.
Do you have to renew your Virginia sales tax certificate?
The sales tax certificate is a one-time registration and no renewals are needed. Be mindful that if any information about the business changes such as the mailing address, additional locations, or change in ownership, those changes need to be updated with the Virginia Department of Taxation.
How do I get a wholesale license in Virginia?
A business can make tax-exempt purchases for reselling without paying state sales tax. The tax liability is passed from the wholesaler or distributor to the retailer who will then charge sales tax to the end-user of the item.
Wholesalers and distributors will require a sales tax number and a completed Virginia Certificate of Exemption (also referred to as a wholesale license, resale certificate, or sales tax exemption certificate) to document the items being purchased are for resale.
If you have questions about the sales tax certificate, the Virginia Department of Taxation has a helpful guide to retail sales and use taxes in Virginia or can be contacted by calling 804-367-8057.
Is the business license the same thing as a sales tax certificate?
In addition to registering for a sales tax certificate, there may be other business licenses needed before starting a business in Virginia.