In Virginia, businesses are required to pay a variety of taxes, including state and local taxes. Virginia business tax includes the following:
- Sales and use tax: This is a tax on the sale of goods and certain services. The tax rate is 4.3% and the seller generally collects it.
- Excise tax: This is a tax on specific goods or activities, such as cigarettes and motor fuels. The rate of the tax varies depending on the specific good or activity.
- Corporate income tax: This is a tax on the income of corporations doing business in Virginia. The rate of the tax ranges from 6% to 8.25%, depending on the amount of taxable income.
In addition to these state taxes, businesses in Virginia may also be required to pay local taxes, such as property taxes and business license fees.
It’s worth noting that Virginia has a relatively favorable business tax climate, with relatively low tax rates compared to other states. You may want to consult with a tax professional if you have any specific questions about your business’s tax obligations in Virginia. You can also contact the Virginia Department of Taxation by phone at (804) 367-8037.
Virginia Pass-through Entity Tax
A pass-through entity business’s profits are passed through to the owners and taxed at the individual level, rather than being taxed at the business level. Examples of pass-through entities include sole proprietorships, partnerships, and S corporations.
In Virginia, pass-through entities are subject to the state’s corporate income tax. However, the tax rate for pass-through entities is generally lower than the rate for traditional corporations.
For the tax year 2021, the tax rate for pass-through entities in Virginia is 6% for the first $50,000 of taxable income and 8.25% for taxable income above $50,000.
Virginia Estimated Tax Payments
In Virginia, businesses that are required to pay estimated taxes (also known as quarterly taxes) must make payments in four installments throughout the year. These payments are typically due on the following dates:
- April 15
- June 15
- September 15
- January 15 of the following year
Estimated tax payments are required for businesses that expect to owe at least $500 in taxes for the current tax year, and whose tax liability is not being withheld from their wages (e.g. because they are self-employed).
To calculate your estimated tax payments, you will need to estimate your taxable income and tax liability for the current year. You can then use the Virginia Estimated Tax Payment Calculator to determine the number of your quarterly payments.
Virginia Income Tax Calculator
You can use the Virginia Department of Taxation’s online income tax calculator to estimate your Virginia income tax liability. You will need to enter information about your taxable income, filing status, and number of dependents in order to use the calculator,
To access the calculator, visit the Virginia Department of Taxation’s website and click on the “Calculators” link under the “Resources” heading. On the next page, click on the “Income Tax Calculator” link to open the calculator.
Please note that the calculator is for estimation purposes only. It should not be used to file your Virginia income tax return.
Click the link here to reach the Virginia income tax calculator
Do You Need to Pay Virginia Capital Gains Tax?
In Virginia, capital gains are taxed as ordinary income. This means that capital gains are taxed at the same rate as other types of income, such as wages and salaries.
For the tax year 2021, the tax rate for Virginia residents is 2% on the first $3,000 of taxable income, 3% on the next $3,000, and 5.75% on taxable income above $6,000.
If you are a nonresident of Virginia, you will only be subject to Virginia capital gains tax on the capital gains you earned while you were a resident of the state.
It’s worth noting that the federal government also imposes a tax on capital gains. The rate of the federal capital gains tax varies depending on the amount of the gain and your tax bracket.
How much Is Virginia Sales Tax?
In Virginia, a sales tax is imposed on the sale of goods and certain services. The rate of the tax is 4.3%.
The Virginia sales tax is generally collected by the seller and is remitted to the state on a regular basis. However, if you are a business that makes taxable sales, you may be required to register with the Virginia Department of Taxation and obtain a sales tax license.
There are some goods and services that are exempt from the Virginia sales tax. Examples of exempt items include food items for home consumption and prescription drugs. Certain types of services are also exempt such as certain types of repair and maintenance services. The business owner is responsible for ensuring compliance with all relevant business taxes, including income tax, sales tax, and payroll tax.
How Do You Pay Virginia Property Tax?
In Virginia, property taxes are imposed on real and personal property by local governments, such as cities, counties, and towns. The tax is based on the value of the property. The revenue from that tax is used to fund local government services ( e. g. schools, police and fire protection, and road maintenance).
The property tax rate in Virginia varies depending on the jurisdiction in which the property is located. The rate is generally expressed in terms of dollars per $100 of assessed value. For example, a property tax rate of $1.00 per $100 of assessed value would mean that a property with an assessed value of $100,000 would have a property tax bill of $1,000.
Do You Need a Virginia Business License?
In Virginia, businesses may be required to obtain a business license in order to operate legally within the state. The requirements for obtaining a Virginia business license vary. It depends on the type of business you are operating and the jurisdiction.
Generally, you will need to apply for a business license with your local county or city government. You may also need to register your business with the Virginia Department of Taxation. Obtain any necessary permits or licenses from state agencies.
Virginia Payroll Tax
In Virginia, employers are required to pay a number of payroll taxes, including federal and state taxes.
Federal payroll taxes include:
- Social Security tax: This tax is used to fund the Social Security program and is imposed on both the employer and the employee. The current rate of the tax is 6.2% for the employee and 6.2% for the employer, for a total of 12.4%.
- Medicare tax: This tax is used to fund the Medicare program. And it is imposed on both the employer and the employee. The current rate of the tax is 1.45% for both the employee and the employer, for a total of 2.9%.
- Federal unemployment tax (FUTA): This tax is used to fund the unemployment insurance program and is imposed on the employer. The current rate of the tax is 0.6%.
In addition to these federal taxes, Virginia employers are also required to pay state unemployment insurance taxes. The rate of the tax varies depending on the employer’s experience rating and the state’s unemployment insurance trust fund balance.
If you have any questions about payroll taxes in Virginia, contact the Virginia Employment Commission at 1-866-832-2363.
Inheritance Tax Virginia
Virginia does not have an inheritance tax. This means that you will not be required to pay a tax on inherited property or assets in Virginia.
It’s worth noting that federal estate taxes may still apply to your inheritance, depending on the value of the estate and your relationship to the deceased. If you have questions about whether federal estate taxes may apply to your inheritance, you may want to consult with a tax professional. You can also call the Internal Revenue Service (IRS) or visit www.irs.gov.