Virginia Sales Tax Demystified

Virginia Sales Tax Demystified

Ok, so, Virginia is a bit funky when it comes to Sales Tax.

First, a few notables:

  • There is not a traditional State Sales Tax in Virginia.  They have a Motor Vehicle Tax and a NON-Motor Vehicle Tax
  • There is a minimum tax of $75 on Motor Vehicles
  • There is a Tire Recycling Fee of $.50 per new tire sold
  • In some parts of the state there is a Gross Receipts Tax (GRT).  This is a tax that the State imposes upon the dealers.  The dealers CAN pass it onto their customers to recoup those taxes if they wish.  There are 3 different GRT rates.  They are:
    • Retail Units:          .2%   (currently)
    • Wholesale Units:  .8%   (currently)
    • Labor                      .35% (currently)
  • In Washington DC, DOC Fees are NOT taxable (EXCEPT when calculating the GRT)
  • DOC Fees on the sale of Mopeds are NOT taxable because the State does not consider them to be Motor Vehicles
  • Freight/Shipping/Delivery charges are NOT taxable
  • Labor is NOT taxable
    • *IF there is Labor on a job and there is a GRT in play then there WILL be GRT calculated on said labor
  • Any Customer Rebates from the manufacturers reduces the taxable amount
  • NO Trade-In Credit is given!

 

And now to list what makes up the taxable amounts:

  • Jobs:
    • Shop Materials
    • Parts
    • Labor IF there is a GRT in play
  • Major Unit Sales:
    • Price
    • Accessories
    • Dealer DOC Fee (Motor Vehicles ONLY) (Mopeds are NOT considered Motor Vehicles)
    • Extended Service Contract
    • Pre-Paid Maintenance Policy
    • Tire & Wheel/Roadside Hazard Protection Policy
    • LoJack/GPS Unit/Alarm System
    • Battery Tender
    • Chemicals (Interior Protection,  Paint Protection,  Undercoating)
    • MINUS Customer Rebates

Well I hope this helps to answer any questions regarding calculating Sales Tax in the State of Virginia.