Does Virginia charge sales tax on services?
by April 10, 2024
The majority of U.S. states require merchants to charge sales tax on tangible personal property (TPP), otherwise known as physical goods. Many states also implement sales and use tax on digital goods and SaaS. Because the economy has shifted over time from a manufacturing economy to a service economy, states are now looking to generate revenue by taxing services.
Here’s what merchants need to know about taxing services in the state of Virginia, which has a state sales tax rate of 5.3%.
Does Virginia charge sales tax on services?
Services in Virginia are generally not taxable, with a few exceptions. The following are taxable services in Virginia:
- 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 whether or not the customer furnishes, either directly or indirectly, the materials used in fabrication
- Any services in connection with the furnishing, preparing, or serving by a person for a consideration of meals or other tangible personal property
- Any rooms, lodgings or accommodations furnished to transients by any hotel, motel, inn, tourist camp or cabin, camping grounds, club or any other similar place furnished for less than 90 continuous days
Please keep in mind that this is a guideline, and you should consult with a sales tax professional to determine if the services your business provides should be subject to state sales tax. For an in-depth look at Virginia sales tax, TaxJar’s guide to sales tax in Virginia and the Virginia Department of Taxation has more details.
How to stay compliant with sales tax when you sell services
Managing all the moving parts of sales tax can be challenging. Are accounting services taxed? What about hair care or car maintenance? They may not be taxed in your state today, but sales tax laws change all the time. TaxJar makes it easier for you to stay current with it all, especially as you scale your business across states.
If you need to charge sales tax on services, TaxJar takes all of these state laws into account and makes your job simple. To learn more about TaxJar and get started automating your sales tax compliance, start a free, 30-day trial today.
