Virginia's industries are as varied as its landscape. The state is home to the largest data center market in the United States, has the highest concentration of tech workers in the country, and its port is the third largest on the East Coast. The Old Dominion also boasts a diverse manufacturing base and a fast-growing unmanned systems industry.
Its key industries are geared for growth to secure success for generations to come. Virginia stands for quality and stability for business. It is the right place to expand and grow.
Top State for Doing Business
The northernmost of the right-to-work states is regularly named one of the best states for business in the US. CNBC went a step further and ranked Virginia "America's Top State for Business".
Its six percent corporate tax is below the national median, and its AAA rating has held since 1938, longer than any other state. A second place in the "Most small business friendly state" ranking (Thumbtack, 2019) completes the picture.
Jason Reiman, Chief Supply Chain Officer at The Hershey Company, sums it up. He sees Virginia as a great place to manufacture, and he knows why: access to talent and a workforce trained to run production facilities.
Here is our overview of the 10 most popular US states for foreign direct investment, with more location ideas if you want to invest in the USA.
Prime Location and Advanced Infrastructure
Strategically placed on the US East Coast next to Washington, D.C., Virginia's integrated network of highways, rail lines, airports and seaports gives businesses in every industry a logistics edge. The Old Dominion's central location lets companies get their products to market fast.
Björn Fischer, President of STIHL, agrees. He considers Virginia Beach an ideal location, serving the American market and exporting to more than 80 countries with ease. More than 45 years ago, the Port of Virginia was one of the reasons for choosing the site, and it is still seen as a key factor in the company's success today.
America's Top State for Talent
CNBC also ranked Virginia first for its talent and education. The state sets the bar high for developing talent. Across every industry, Virginia's workforce is among the most productive and best educated in the country. To keep it that way, the state launched programs such as the Virginia Talent Accelerator Program and the Tech Talent Investment Program.
Mike Ownbey, President of Morgan Olson, calls the Talent Accelerator Program a major help in tackling the company's biggest challenge: training a high-quality workforce. In his view, the results are fantastic.
Income Tax in Virginia
Virginia levies income tax of 2 to 5.75%, depending on income. On top of that, federal income tax applies.
Corporate Tax in Virginia
Virginia levies corporate tax of 6%. On top of that, federal corporate tax applies.
Sales Tax in Virginia
The USA has no VAT on the European model. Instead, states, counties and municipalities levy a local sales tax on the sale of goods (but not services).
Virginia Sales Tax Rate
Sales tax in Virginia is 5.3% (4.3% state rate plus a 1% statewide local tax). In regions such as Northern Virginia, Hampton Roads and the Richmond area it is 6%, and up to 7% in some localities.
Virginia Nexus Laws & Sales Tax
Learn more about economic nexus laws and sales tax.
Effective date
July 1, 2019
Included transactions:
Gross receipts from retail sales and taxable services into the Commonwealth, including sales by members of the same controlled group of companies; excludes sales for resale
Treatment of exempt sales:
Exempt sales (other than sales for resale) count toward the threshold; exempt services are excluded
Trigger:
Sales or transactions
Sales/transaction threshold:
$100,000 or 200 transactions
Evaluation period:
The threshold applies to the current or previous calendar year
Additional information:
- Registration requirements: A remote business must register to collect and remit Virginia sales tax no later than 30 days after crossing the economic nexus threshold. For more information, see the guidelines for remote sellers and marketplace facilitators.
- Information for remote sellers
- SB1083
Virginia Marketplace Sellers & Sales Tax
Learn more about registration requirements for marketplace sellers
Effective date for marketplace facilitators:
Economic nexus threshold:
More than $100,000 in gross sales or 200 or more transactions in Virginia in the current or previous calendar year. Remote sellers should exclude marketplace sales when calculating the threshold. Marketplace facilitators include all sales made through the marketplace when calculating the threshold.
Registration requirements:
- Remote multichannel sellers: Once you cross the economic nexus threshold, you must register with the Virginia Department of Taxation and collect Virginia sales tax on sales not taxed by a marketplace facilitator.
- Remote marketplace sellers: You must register once you cross the economic nexus threshold. Contact the Virginia Department of Taxation for more information.
- After filing your final returns for sales through one or more marketplaces, mark your account as no longer liable for sales tax on Form R-3 (or online).
- In-state multichannel sellers: You must register with the Virginia Department of Taxation and collect tax on sales not taxed by a marketplace facilitator.
- In-state marketplace sellers: You must register. Contact the Virginia Department of Taxation for more information.
- After filing your final returns for sales through one or more marketplaces, mark your account as no longer liable for sales tax on Form R-3 (or online). You can also update your account so you can keep using your sales tax exemption certificates.
- Learn more here.
For a look at every state, see our overview of the US states. Whether Virginia or another state is the right home for your US company is covered in the guide Which US state is best for your company?, and you will find the basics in our guide to forming a company in the USA.
How We Help with Virginia:
We can form your company in six states; our overview of US company formation shows which one fits your plans in Virginia. Any open questions we will answer in a consultation.