Virginia Use Tax: What You Need to Know
Virginia Use Tax is a tax imposed on goods purchased for use, storage, or consumption in Virginia when no sales tax was collected at the time of purchase. This typically applies to out-of-state purchases where the seller does not collect Virginia sales tax.
Who Must Pay Virginia Use Tax?
- Individuals and businesses who purchase tangible personal property for use in Virginia.
- Those who buy goods from out-of-state retailers that do not collect Virginia sales tax.
- Residents who purchase items online or through mail-order from non-Virginia sellers.
When Is Use Tax Due?
Use tax is due when the item is received and used in Virginia. It is reported and paid on your Virginia individual income tax return, typically on Form 760 or Form 763, depending on your residency status.
How to Report Use Tax
- Non-residents with Virginia-source income must file Form 763 if they have use tax liability.
- Residents report use tax on Form 760, which includes a section for reporting use tax on purchases.
- Use tax is calculated based on the purchase price of the item and the applicable Virginia sales tax rate.
Common Examples of Use Tax Situations
- Purchasing furniture from an online retailer based in another state.
- Buying a vehicle from a dealer outside Virginia.
- Acquiring tools or equipment for business use from a non-Virginia vendor.
Important Notes
- Use tax applies to tangible personal property only, not services or digital goods.
- Virginia conforms to federal tax law in certain areas, but use tax is administered separately at the state level.
- Failure to report use tax may result in penalties and interest.
Source:
Form 763 Instructions
Form 760 Instructions
Schedule CR Instructions
Disclaimer: Always verify details with official Federal or State Department of Revenue Forms and Instructions.