Planning to sell goods or services in Virginia? Securing a Virginia sales tax permit is an essential step to ensure your business complies with state tax requirements. This permit allows you to collect and remit sales tax on taxable transactions, keeping your business in good standing with Virginia’s tax laws and avoiding penalties for non-compliance.
Regardless of whether your business operates physically in Virginia or you’re selling remotely, obtaining a sales tax permit is a must. This guide will walk you through the process of obtaining your permit, provide tips to stay compliant, and point out common pitfalls to avoid as you get your business up and running in Virginia.
Key Takeaways
- Requirement: Any business with a physical presence in Virginia or remote sellers exceeding $100,000 in sales or 200 transactions must register for a sales tax permit.
- Cost: Registering for a Virginia sales tax permit is free.
- Processing Time: You can typically expect to receive your permit within a few days after submitting your online application.
- Remote Sellers: Even if you don’t have a physical presence in Virginia, remote sellers exceeding the economic nexus threshold must register.
What is a Sales Tax Permit in Virginia?
A Virginia sales tax permit is a legal authorization that allows businesses to collect sales tax from customers on taxable goods and services sold within the state. This permit is required for any business operating in Virginia that is involved in the sale of tangible personal property, certain services, or engaging in taxable transactions.
Sales tax registration in Virginia is important because it ensures your business complies with state tax laws. Both in-state and remote sellers are subject to these regulations. The process also helps businesses maintain proper records and avoid penalties for failing to collect and remit the appropriate amount of sales tax.
Do You Need to Register for a Sales Tax Permit in Virginia?
In Virginia, the need to register for a Virginia sales tax permit depends on several factors, including your business’s location and sales activity. Understanding your specific circumstances will help you determine if registration is required. Here’s a clear checklist to guide you:
- In-state sellers: If you are operating a business with a physical nexus in Virginia, such as a store, office, warehouse, or fulfillment center, you must register for a sales tax permit. This applies to any business selling taxable goods or services in Virginia. Your account number will begin with “10” once you register as an in-state dealer.
- Out-of-state sellers (remote sellers): If you’re based outside of Virginia but sell goods or services to customers within the state, you may still need to register. Remote sellers meeting thresholds, such as more than $100,000 annual gross sales or 200 transactions, should register for a Virginia remote seller sales tax permit. If you register as an out-of-state dealer, your account number will begin with “12.”
- Marketplace facilitators: If you sell through an online platform or marketplace, the platform itself may collect and remit sales tax on your behalf. However, you might still need to register if you’re making sales outside the platform or if you conduct other taxable transactions that the marketplace facilitator doesn’t handle.
- Economic nexus: Even without a physical presence in Virginia, if your business exceeds the threshold for economic nexus, you should register for a Virginia sales tax permit. This threshold is either $100,000 in sales or 200 transactions in Virginia. This rule applies to both remote sellers and out-of-state businesses that meet the sales or transaction criteria.
Step-by-Step: How to Get a Sales Tax Permit in Virginia?
Registering for a Virginia sales tax permit is a simple process when you have the right information ready. Here’s a clear, step-by-step guide to help you start with the registration process:
- Gather Necessary Information: Before you start, make sure you have the following details on hand, like Business name, address, contact information and more.
- Visit the Virginia Tax Portal: Go to the official Virginia Tax website to begin the registration process. You can create a Virginia Tax business online services account if you don’t have one already.
- Complete the Online Application: Fill out the online application form with accurate details about your business, including the name, EIN, type of products you sell, and projected sales. Make sure you provide the required information, such as your business structure and the start date of your operations.
- Submit the Application: Once you’ve completed the application, review all the details carefully to ensure accuracy before submitting. This step ensures that you don’t encounter delays due to incorrect information.
- Wait for Approval: After submitting your application, the Virginia Department of Taxation will review your registration. Typically, you will receive your state of Virginia sales tax permit within a few business days. You can check the status of your application through your Virginia Tax account.
- Start Collecting and Remitting Sales Tax: After your application is approved and you’ve received your permit, you are legally required to collect sales tax on taxable goods and services. Be sure to start remitting the sales tax as required and file returns electronically.
- Filing and Payment: You must file and pay sales tax electronically. The Virginia Tax portal offers multiple options:
- Virginia Tax Business Online Services Account: Log in to manage your account, schedule payments, and file returns directly from your bank account.
- eForms: No login required for this option. Use it for amending returns or making payments directly from your bank account.
- Web Upload: Ideal for submitting large numbers of documents or payments in bulk. This option provides immediate feedback on whether your return has been accepted or rejected.
- Pay with ACH Credit: If you prefer to initiate payments directly from your bank account to Virginia Tax’s bank account, use ACH Credit.
What Information Do You Need to Register?
To streamline your application, it’s important to have the following information ready before you begin:
- Business Information: Business name and physical address, Phone number and email address, and Legal structure (sole proprietorship, LLC, corporation, etc.).
- Employer Identification Number (EIN): If you have employees or your business is structured as an entity (LLC, corporation), you will need an EIN, which can be obtained from the IRS.
- NAICS Code: The North American Industry Classification System (NAICS) code identifies the primary activity of your business. It’s used to classify and analyze the economy.
- Responsible Party Information: This refers to the individual who is legally responsible for the business. It includes their full name, address, and contact details.
Make sure all of this information is accurate and up to date to avoid delays in processing your registration.
How Much Does It Cost to Register for a Sales Tax Permit in Virginia?
There is no fee to register for a Virginia sales tax permit. However, depending on the nature of your business, you may be subject to other fees, such as business licensing or local taxes. Virginia makes the process of registering for a sales tax permit straightforward and free of charge, which can help businesses focus on other aspects of operations.
How Long Does It Take to Get Approved?
The approval process for a Virginia sales tax permit is relatively quick. On average, you can expect to receive your permit within 2 to 3 business days after submitting your application offline and typically on the same day if you apply online. It’s important to check your spam or junk folder for email confirmations, as these might get filtered.
Common Mistakes to Avoid When Registering
To avoid delays or rejections, here are some common mistakes to watch out for when registering for your sales tax permit in Virginia:
- Incorrect business type: Double-check that the business type you select aligns with your actual business activities.
- Failure to include marketplace facilitator obligations: If you’re using an online marketplace, make sure to understand your tax responsibilities under Virginia’s marketplace facilitator laws.
- Mistakes in responsible party details: Ensure that the responsible party’s personal details are accurate and complete.
What Happens After You Register?
Once you’ve registered for your Virginia sales tax permit, here’s what you can expect:
Account Setup & Login Credentials
After your registration is approved, you’ll receive an online account through the Virginia Tax portal. You’ll be provided with login credentials to access your account. This account will be used to file sales tax returns, manage your business details, and make payments.
Filing Frequency
Depending on your sales volume, you’ll be assigned a filing frequency. The frequency determines how often you need to file your sales tax returns. Below is a general breakdown of the filing frequency:
| If your estimated total withholding is: | You are required to file: |
| Less than $300 per quarter | Quarterly |
| $300 to $2,999 per quarter | Monthly |
| $3,000 or more per quarter | Semi-weekly |
How to Stay Compliant?
- Collecting and Remitting Tax: Once you’ve received your permit, you are legally required to collect sales tax on taxable goods and services and remit it to the state of Virginia by the assigned due date.
- Filing Zero Returns: If you haven’t made any taxable sales in a specific period, you still need to file a zero return for that period to stay compliant.
Be sure to monitor your filing dates and file returns on time to avoid penalties or interest.
Special Considerations for Out-of-State or Remote Sellers
For remote sellers, Virginia enforces a remote seller sales tax registration requirement. If your business reaches the state’s economic nexus threshold, you are obligated to register for sales tax and collect tax on sales made to Virginia customers, even if you don’t have a physical presence in the state.
If you are an eCommerce seller, be sure to check the state’s economic nexus laws and sales tax thresholds to ensure compliance. Additionally, if you sell through online marketplaces, be aware of marketplace facilitator laws that may shift the responsibility for sales tax collection onto the marketplace itself.
Resources & Where to Register
Ready to get started? Here are practical resources to help you:
- Virginia Tax Portal: Begin your sales tax registration through the official Virginia Tax website. Create an online business account if you don’t already have one.
- Manage Your Account: Use the Virginia Tax Online Services platform to manage your sales tax filings, payments, and business details.
- Contact Support: For questions or assistance, you can reach the Virginia Department of Taxation at 804-367-8037 or email them at [email protected].
For businesses managing sales tax compliance across multiple states, Commenda offers an efficient solution. With its global sales tax platform, Commenda simplifies the registration, filing, and remittance processes for remote sellers and marketplace facilitators, ensuring ongoing compliance with Virginia’s regulations and more.
Simplify Sales Tax Compliance with Commenda
Managing Virginia sales tax registration and compliance can be time-consuming. Commenda’s global sales tax platform simplifies this process for remote sellers, online retailers, and marketplace facilitators with automated registration, multi-state compliance, and continuous filing support, removing the guesswork.
Commenda also offers expert guidance on choosing the right business structure, efficient handling and filing of required documents, and assistance with obtaining proper business licenses and permits.
Plus, it helps you stay compliant with changing regulations, including California’s evolving legal requirements.If you want to streamline your Virginia sales tax permit process and maintain ongoing compliance with ease, Commenda is the platform to choose. Book a free demo to learn more.
