Virginia Business Tax Rate for Corps, LLC’s, Etc.

Written By:
Adiste Mae

State business taxes in Virginia are considered to be a reasonable type of tax structure in the sense that each company in the state of Virginia is obliged to pay the same kind of taxes irrespective of where the incorporation of the business took place.

Virginia’s rate for corporate income tax has remained unchanged and has not increased since 1972.

The corporate income tax rate of periods earlier than 1972 has also stayed the same for about 25 years.

Corporate Income Tax

In Virginia, the rate for corporate income tax is 6 percent of the corporate income that is taxable.

In most cases, corporations determine how much of their income is taxable by using a formula made of three parts that takes property factors, payroll and sales into account.

The following tax credits against the income tax of a corporation are allowed in the state of Virginia:

•       Recycling equipment tax credit
•       Day care investment tax credit
•       Worker retraining tax credit
•       Major business facility job tax credit

In the event that you would like to know more about corporate income tax, the Virginia Department of Taxation can be contacted at (804) 367 8031.

The website of the Virginia Department of Taxation can be accessed over here.

Annual Corporation Registration Fee

A registration fee that has to be paid every year is the obligation every authorized corporation has to meet when conducting business in the state of Virginia.

The annual registration fee can range anywhere from $100 all the way up to $1,700.

Registration fees will vary depending on the amount of shares a corporation has available for ownership.

On the other hand, corporations that do not have stocks to distribute and have been organized past the year 1970 pay a registration fee of $25 every year.

In the event that you would like to know more about annual corporation fees, the Virginia State Corporation Commission can be contacted at (800) 552 7945.

The website of the Virginia State Corporation Commission can be accessed over here.

Withholding Tax

The state of Virginia obliges employers to withhold taxes from their employee’s wages or salaries much like what is also required under the federal law.

Businesses that are obligated to have withholding returns filed must be registered for withholding tax as an employer; from there, the filed withholding returns from the taxed income is paid to the Virginia Department of Taxation.

It is the responsibility of the employers to comply with the timely filing and payments of what they have incurred in withholding liability.

In the event that you would like to know more about withholding tax, the Virginia Department of Taxation can be contacted at (804) 367 8031.

The website of the Virginia Department of Taxation can be accessed over here.

Worker’s Compensation Insurance

Businesses that have three or more staff or employees who are regularly providing their services for that very same business within the state of Virginia have three choices when it comes to paying the mandatory worker’s compensation insurance.

They can do either of the following:

•       Acquire and sustain a worker’s compensation insurance policy with any qualified private carrier of insurance
•       Procure a certificate of self insurance that the Virginia Workers’ Compensation Commission issues
•       Become a member of a self insurance association licensed group.

In the event that you would like to know more about worker’s compensation insurance, the Virginia Workers’ Compensation Commission can be contacted at (877) 664 2566.

The website of the Virginia Workers’ Compensation Commission can be accessed over here.

Unemployment Insurance Tax

Employers in Virginia are obligated to have unemployment insurance tax paid for when their business has hired an employee or more for a duration of no less than 20 weeks in the span of a calendar year.

Employers in Virginia are also obligated to pay for insurance tax for unemployment when the wages of their employees have exceeded or are equivalent to $1,500 in any of the current year’s calendar quarters.

In most scenarios, the percentage of unemployment insurance tax businesses have to pay fluctuate from 0.29 percent to 6.39 percent of the initial $8,000 that each of the business’ employees earn every year.

In the event that you would like to know more about unemployment insurance tax, the Virginia Employment Commission can be contacted at (703) 803 000.

The website of the Virginia Employment Commission can be accessed over here.

Sales and Use Tax

An eligible business will have to pay 5.3 percent in sales and use tax.

The state will then return 1 percent out of the 5.3 percent paid to the state’s localities.

A seller in Virginia is subjected to pay the sales tax that is imposed upon every gross receipt they collect which is obtained from the business’ retail sales or the leases it gathers from tangible property personally owned by that seller with an exemption to scenarios that involve the retail sales or leases being specifically exempted from paying taxes by the law.

In cases where the seller does not gather the sales tax from the individuals purchasing their products, the purchaser will then be obligated to pay the use tax on whatever they purchase excluding purchases that were made from items that are tax exempt or from the use of property that is also exempt from taxation.

There are instances when distributors, manufacturers, and other businesses are granted tax exemptions for eligible purchases they make.

It is advisable to do research on what purchases qualify for tax exemptions when operating as a business inclusive of manufacturing and distributing.

In the event that you would like to know more about sales and use tax, the Virginia Department of Taxation can be contacted at (804) 367 8031 and the website of the Virginia Department of Taxation can be accessed over here.

Utility Consumption Tax

The state of Virginia’s consumption tax is charged on CCF which is a hundred cubic feet of usage for gas and kWh which is the kilowatt per hour electricity usage.

Utility consumption tax is usually levied by the following:

•       $0.0195 every CCF of natural gas that has been consumed up until 500 CCF every month
•       $0.00155 up until $0.00075 every kWh of electricity that has been consumed

In the event that you would like to know more about utility consumption tax, the State Corporation Commission of the Commonwealth of Virginia can be contacted at (804) 371 9967.

The website of the Virginia State Corporation Commission can be accessed over here.

Do you have questions about taxes in Virginia?

If you have any questions on taxes in the state of Virginia, the Virginia Department of Taxation can be a great deal of help and can be contacted through phone by dialing (804) 367 8031.

To look through the state’s publicly available information on taxes, the website of the Virginia Department of Taxation is at http://www.tax.virginia.gov/ .