Consumer Use Tax for Businesses
The use tax applies to the use, consumption, or storage of tangible personal property in Virginia when the Virginia sales or use tax was not paid at the time of purchase. The use tax is computed on the cost price of the property, which is the total amount for which the property was purchased, including any services that are a part of the purchase, valued in money or otherwise, and includes any amount for which credit is given the purchaser or lessee by the seller.
How to file and pay
New electronic filing requirement - Effective for filing periods beginning July 1, 2017 (Aug. 20 return for monthly filers, Oct. 20 return for quarterly filers), businesses must file and pay consumer's use tax electronically using the free ST-7 eForm. The ST-7 eForm is similar to the paper return, but will perform calculations for you. No login or password is required.
If you are unable to file electronically, you must submit an electronic filing waiver request.
Business consumer's use tax is due by the 20th of the following month after the close of the reporting period. You do not need to file a return for periods in which no use tax is due.
Vending Machine Sales Tax
General Liability: A tax is imposed on dealers who place vending machines for the sale of tangible personal property. The tax is computed on the cost price (or manufactured cost) of tangible personal property sold through the vending machines. This tax does not apply to non-vending machine dealers such as service station operators who use vending machines at their businesses to sell merchandise. These dealers are subject to the retail sales tax provisions.
Registration: Every individual, partnership, corporation, etc., desiring to engage in the business of placing vending machines for selling tangible personal property must file a Business Registration Application, Form R-1, or register online.
Filing Procedure: Effective July 1, 2016, taxpayers must file and make payments electronically using the VM-2 eForm and accompanying Schedule VM-2B. eForms are free, secure, and available at any time. Payments can be debited from your checking account or made by ACH credit through your bank.
If you are unable to file and pay electronically, you must submit an Electronic Filing Waiver Request.
The vending machine tax return must be filed electronically for each period showing the cost price or manufactured cost of tangible personal property sold through vending machines during the preceding period. The dealer must pay the amount of tax due at the time the return is filed.
Generally, dealers are required to file returns monthly and must submit the return by the 20th of the month following the end of the period. Virginia Tax determines annually which dealers should file and pay on a quarterly basis. Quarterly returns must be filed on or before the 20th of the month following the close of each quarterly period ending March 31, June 30, Sept. 30, and Dec. 31. A return must be filed for each reporting period even if no tax is due.
Tax Rates: The tax rate is 6.3% (5.3% state tax and 1% local tax) of wholesale purchases. In addition, there is an additional 0.7% state tax imposed in the localities that make up Northern Virginia and Hampton Roads, making the rate in these regions 7% (6% state tax and 1% local tax). Dealers may also request authorization from the Tax Commissioner to report tax based on gross sales.
The additional regional tax in Northern Virginia applies to the Cities of Alexandria, Fairfax, Falls Church, Manassas, and Manassas Park, and the Counties of Arlington, Fairfax, Loudoun, and Prince William. The additional regional tax in Hampton Roads applies to the Cities of Chesapeake, Franklin, Hampton, Newport News, Norfolk, Poquoson, Portsmouth, Suffolk, Virginia Beach, and Williamsburg, and the Counties of Isle of Wight, James City, Southampton, and York.
For additional information refer to Code of Virginia § 58.1-614.
Prepaid Wireless E-911 Fee
A Prepaid Wireless E-911 fee of 50 cents is imposed on each retail purchase of prepaid wireless calling service. Dealers who sell prepaid wireless service must collect and remit the fee.
Tire Recycling Fee
General Liability: The fee is levied for each new tire sold at retail in Virginia. The fee may be passed on to the retail customer if separately stated.
Fee Rate: 50 cents per tire, with certain exemptions (see below).
Registration: To register for the Tire Recycling Fee, retailers must file a Business Registration Application, Form R-1, with Virginia Tax, or register online.
Filing Procedure: Every tire retailer must file the Tire Fee return, Form T-1, quarterly. The return is due and the fee payable on or before the 20th of the month following the end of each quarter of the calendar year. Quarterly periods end March 31, June 30, Sept. 30, and Dec. 31.
The fee imposed under § 58.1-641 shall not apply to new tires for:
- Any device moved exclusively by human power;
- Any device used exclusively upon stationary rails or tracks; or
- Any device used exclusively for farming purposes, except a farm truck.
For additional information please refer to Code of Virginia §58.1-640-644
Digital Media Fee
General Liability: A fee is imposed on the in-room rental or purchase of digital media offered in guest rooms rented out for continuous occupancy for fewer than 90 days, such as hotels and motels.
Administering the Digital Media Fee
All charges for digital media are subject to the digital media fee, with certain exemptions (see below). The fee is charged in addition to the cost of the rental of the room and is collected by the provider, who then remits it to Virginia Tax.
A "provider" is any person who offers the sale of digital media to guests in temporary lodgings located in Virginia. Digital Media providers must register with Virginia Tax.
Providers are required to collect the digital media fee on taxable charges for digital media unless presented with a valid retail sales and use tax exemption certificate that exempts the customer from retail sales and use tax on charges for the temporary lodging. In such cases, the digital media fee shall not be collected.
As the digital media fee is a fee on the purchase of a service, certificates of exemption from the retail sales and use tax on a purchase of tangible personal property will not relieve a customer from paying the digital media fee.
Exemptions: The following are exempt from the digital media fee, provided a valid exemption certificate is presented to exempt them of the retail sales and use Tax on the lodging accommodation:
- Federal government agencies, when the reservation is made and paid for by the agency; and
- Nonprofit entities holding a valid exemption certificate issued by Virginia Tax, which specifically states it is valid for the purchase of "taxable services."
Registration: Dealers must file a Business Registration Application, Form R-1, or register online.
Filing Procedure: Each provider is required to file a monthly Form DM-1, Digital Media Fee Return, and remit the Digital Media Fee due on or before the 20th day of the month following the month in which the fee is billed. The digital media fee must be reported on Form DM-1. The digital media fee cannot be reported on the provider's Form ST-9, Retail Sales and Use Tax Return.
Tax Rate: The tax rate is 10% of the sales or rental price.
For additional information please refer to Virginia Tax Bulletin 09-5.
The Public Facilities Act provides a mechanism that allows a portion of the state sales tax revenues attributable to sales in new, renovated, or expanded public facilities in certain localities to be returned to the locality in which the facility is located. The locality is only entitled to the sales tax revenue generated by transactions taking place in the facility.
All businesses or persons making sales at the facility must register with Virginia Tax and report their sales and use tax on Form ST-9, Retail Sales and Use Tax Return.