Key figures
Virginia receivables
2026, with sources
- Sales tax rate
- 5.3% to 7%Includes the 1% local tax; 6% in Northern Virginia, Hampton Roads and Central Virginia; 7% in the Historic Triangle.
- Economic nexus
- $100,000 or 200 transactionsAnnual Virginia gross sales, or transactions with Virginia customers.
- SaaS and software delivered via the Internet
- Not taxableExempt as Internet services, including software, data and content.
SaaS is exempt
Virginia’s sales tax exempts services that don’t involve an exchange of tangible personal property and that provide access to or use of the Internet, including software, data, content and other information services delivered electronically via the Internet. For a software company, that means SaaS and downloaded software are not taxable.
What can be taxable is anything tangible: hardware, devices or physical media sold with the software. A company bundling a device with a subscription prices the two separately so the subscription stays exempt.
Rates by locality
Virginia’s general rate includes a 1% local tax and varies by where the sale is made or received: 5.3% in most of the state, 6% in Northern Virginia, Hampton Roads and Central Virginia, 6.3% in several Southside localities, and 7% in James City County, Williamsburg and York County. Food and personal hygiene items are taxed at 1%.
An example: a hardware startup shipping $200 devices to customers in Fairfax County charges 6%; the same device shipped to Roanoke is 5.3%. Its subscription service, delivered over the Internet, is untaxed in both places.
Registering
A seller with physical presence registers as an in-state dealer. A remote seller with more than $100,000 of annual Virginia gross sales or 200 or more transactions with Virginia customers registers as an out-of-state dealer. Returns are monthly or quarterly depending on liability and are due on the 20th of the month after the period, even when there are no sales to report.
The federal baseline
This page covers what Virginia adds. The federal rules underneath it apply here too.
Common questions
Is SaaS taxable in Virginia?
No. Virginia exempts services that provide access to or use of the Internet, including software, data, content and other information services delivered electronically via the Internet. A SaaS company selling only hosted software to Virginia customers has nothing to collect.
Does a remote SaaS seller have to register in Virginia?
If it makes more than $100,000 in annual Virginia gross sales or 200 or more transactions with Virginia customers it is treated as an out-of-state dealer and must register. The threshold is written in gross sales and transactions; a seller whose Virginia sales are all exempt SaaS has no Virginia tax to collect.
Receivables next door
- DCDistrict of Columbia receivablesDC charges 6% sales tax on digital goods and data processing services, which reaches most SaaS, and remote sellers register at $100,000 or 200 sales. A rise to 7% has been postponed.
- KYKentucky receivablesKentucky charges a flat 6% with no local sales tax, taxes SaaS as a prewritten computer software access service, and since August 1, 2026 requires remote sellers to register on $100,000 of gross receipts alone.
- MDMaryland receivablesSince July 2025 Maryland taxes SaaS: 3% when sold for use in a business’s systems, 6% for individual use. Remote sellers register at $100,000 or 200 transactions.
- NCNorth Carolina receivablesNorth Carolina’s rate is 4.75% plus county and transit tax, remote sellers register at $100,000 of gross sales with a 60-day lag from July 2026, and remotely accessed SaaS is not taxed.
- TNTennessee receivablesTennessee charges 7% plus local tax, taxes remotely accessed software, and requires remote sellers to register once retail sales into the state exceed $100,000 over 12 months.
- WVWest Virginia receivablesWest Virginia’s 6% sales tax reaches many services and prewritten software, while electronic data processing is exempt, so SaaS depends on what it does. Remote sellers register at $100,000 or 200 transactions.
Founder guides on this
- Sales taxSales tax nexus for startups: when you owe tax in a stateSince Wayfair, selling into a state can create a sales tax obligation. How economic nexus works, why SaaS is taxable in some states and when to register.
- StripeHow to reconcile Stripe payouts to your booksA Stripe payout is charges less fees, refunds and disputes, batched across days. How to book it gross, tie it to the bank, and keep revenue right.
- RevenueDeferred revenue for SaaS startups, explainedAn annual prepayment is cash today and revenue over a year. How deferred revenue works under ASC 606, why it’s a liability, and the schedule behind it.
More of the Virginia guide
- AccountingAccounting and state tax in VirginiaCorporate tax, conformity to federal rules, apportionment and what it does to your books
- PayablesPayables and contractors in VirginiaPaying vendors and contractors: 1099 filing, use tax, contractor tests and withholding
- PayrollPayroll taxes and employer rules in VirginiaWithholding, unemployment insurance, paid leave, minimum wage and the rules on paydays
- ComplianceCompliance and filings in VirginiaRegistering to do business, annual reports, franchise tax and the filing calendar
- AdvisoryAdvisory: credits and decisions in VirginiaCredits, incentives and the decisions that are cheaper to get right the first time
Sources
Checked against each agency’s own page on . Rates and thresholds change, usually on January 1.
General information for US companies, not tax, legal or accounting advice for yours. Rules and thresholds change; confirm the specifics with a CPA or the agency before you act on them.