Retail Sales Tax

The retail sales and use tax is a tax charged and collected by certain businesses on behalf of the Commonwealth of Virginia. A retail sale is generally defined as a sale to a consumer or any other person or entity for any purpose other than resale. The tax may also apply to the furnishing of transient accommodations and the lease or rental of tangible personal property. One percent of this tax is designated as the "local portion" and is directly returned by the Commonwealth to the localities in which the business operates. Effective September 1, 2004, the combined state and local rate is 5% for most retail items. Those engaged in business as a retail seller must register with the Virginia Department of Taxation. Depending on business volume, the Department may require monthly or quarterly remittance.

Legislation enacted by the 2004 General Assembly (House Bill 1241) allows retail dealers the option of remitting their sales and use tax return and payment locally. In Hampton, these returns and payments are accepted by the Commissioner's State Income Tax Department.

Please be advised that currently the law does not permit local processing of the return or payment. Upon receipt by this office and certification of the date received by this office, the return and payment are forwarded to the Department of Taxation.

At his discretion, the Commissioner may require payment of cost of postage for this service.

For additional information on this tax, as well as other state administered business taxes, visit the Virginia Department of Taxation.