How do I collect sales tax legally?

How to Collect Sales Tax Legally in Virginia

Collecting sales tax correctly is essential for businesses operating in Virginia to stay compliant and avoid penalties. Follow these practical steps to ensure your sales tax collection is legal and efficient.

Register for a Virginia Sales Tax Permit

Before collecting sales tax, register your business with the Virginia Department of Taxation to obtain a sales tax permit. This registration allows you to legally collect and remit sales tax.

Understand Which Sales Are Taxable

In Virginia, most tangible personal property sales and certain services are subject to sales tax. Review the Virginia Department of Taxation guidelines to determine if your products or services require tax collection.

Set Up Sales Tax Collection in Your Point-of-Sale System

Configure your cash register or e-commerce platform to apply the correct Virginia sales tax rate at checkout. Rates can vary by locality, so ensure your system accounts for local option taxes.

Collect the Correct Sales Tax Rate

Virginia’s statewide sales tax rate is 4.3%, with additional local taxes applied depending on the jurisdiction. As of 2026, total rates typically range from 5.3% to 7%. Verify the current combined rate for your business location.

Maintain Accurate Records

Keep detailed records of all sales and the sales tax collected. This supports your reporting and remittance obligations and helps with bookkeeping and potential audits.

File and Remit Sales Tax on Time

Submit your collected sales tax to the Virginia Department of Taxation according to your assigned filing frequency (monthly, quarterly, or annually). Timely filing avoids penalties and maintains compliance.

• Register your business for a sales tax permit with the Virginia Department of Taxation.
• Determine taxable goods and services under Virginia tax laws.
• Set up your sales system to collect the correct local and state tax rates.
• Keep accurate sales and tax records for reporting and bookkeeping.
• File sales tax returns and remit payments on schedule to maintain compliance.