The Tax Foundation

Tax Data

Virginia

The Facts on Virginia's Tax Climate

Here are some basic facts on Virginia’s tax system and how it compares to other states:

Tax Freedom Day Arrives on April 25 in Virginia
Tax Freedom Day is the day when Americans finally have earned enough money to pay off their total tax bill for the year. In 2008, Virginia taxpayers had to work until April 25 to pay their total tax bill (ranked 12th highest nationally). That's two days later than the national Tax Freedom Day (April 23). The Tax Freedom Days of neighboring states are as follows: Maryland, April 28 (ranked 7th nationally); West Virginia, April 8 (ranked 47th nationally); Kentucky, April 10 (ranked 45th nationally); Tennessee, April 11 (ranked 44th nationally); and North Carolina, April 17 (ranked 27th nationally).

Tax Freedom Day has been projected using the most up-to-date economic and budget projections from official government agencies. However, Tax Foundation estimates of average state and local tax rates for 2008 will not be released until later this spring as we await more up-to-date data from various government agencies.
Full study of Tax Freedom Day, nationwide and in each state

Virginia's State/Local Tax Burden Slightly Above National Average
Estimated at 9.8% of income, Virginia's state/local tax burden percentage ranks 18th highest in the nation, just above the national average of 9.7%. Virginians pay $4,669 per capita in state and local taxes.
Virginia's State-Local Tax Burden, 1977-Present
Other States' State/Local Tax Burdens
Historical Chart Comparing All States' State/Local Tax Burdens from 1977 to 2008

Virginia's 2008 Business Tax Climate Ranks 14th
Virginia ranks 14th in the Tax Foundation's State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property. Neighboring states ranked as follows: Maryland (24th), West Virginia (37th), Kentucky (36th), Tennessee (16th) and North Carolina (40th).
50-State Comparison of Business Tax Climates (data only)
2008 State Business Tax Climate Index, Fifth Edition (full study)

Virginia's Individual Income Tax System
Virginia's personal income tax system consists of four separate brackets with a top rate of 5.75% kicking in at an income level of $17,000. That top rate ranks 28th highest among states levying an individual income tax. Virginia's 2005 individual income tax collections were $1,104 per person, which ranked 10th highest nationally.
50-State Table of Individual Income Tax Rates
50-State Table of State Individual Income Tax Collections
50-State Table of State and Local Individual Income Tax Collections Per Capita

Virginia's Corporate Income Tax System
Virginia's corporate tax structure consists of a flat rate of 6% on all corporate income. Among states levying corporate income taxes, Virginia's rate ranks 36th highest nationally. In 2006, state-level corporate tax collections (excluding local taxes) were $112.96 per capita, which ranked 37th highest nationally.
50-State Table of Corporate Income Tax Rates, 2000-2008
50-State Table of State and Local Corporate Income Tax Collections Per Capita and Per Household, 2005
50-State Table of State Corporate Income Tax Collections Per Capita, 2006

Virginia Levies Sales Tax Below National Median; Cigarette Taxes Low
Virginia levies a 5% state-level general sales or use tax on consumers, below the national median of 5.4%. Virginia localities are required to collect a 1% local sales tax as well, however. In 2005, state and local governments combined collected $1,011 per capita in general sales taxes, which ranks 43rd highest nationally. Virginia's gasoline tax stands at 19.6 cents per gallon, ranking 39th highest nationally. Virginia's cigarette tax stands at 30 cents per pack of twenty and ranks 5th lowest nationally. The sales tax was adopted in 1966, the gasoline tax in 1923 and the cigarette tax in 1960.
50-State Table of Sales and Excise Tax Rates
50-State Table of State and Local General Sales and Gross Receipts Tax Collections Per Household and Per Capita, Fiscal Year 2005

Virginia Property Taxes: Comparatively Modest
Virginia is one of the 37 states that collect property taxes at both the state and local levels. As in most states, local governments collect far more. Virginia's localities collected $7,694,442,000 in property taxes in fiscal year 2004, which is the latest year the Census Bureau published state-by-state property tax collections. At the state level, Virginia collected $20,778,000 in property taxes during FY 2004, making its combined state/local property taxes $7,715,220,000. That brings Virginia's combined per capita collection to $1,031, which ranks 21st highest nationally.
State property tax collections per capita by state

Federal Tax Burdens and Expenditures: Virginia is a Beneficiary State
Virginia taxpayers receive more federal funding per dollar of federal taxes paid compared to the average state. Per dollar of federal tax collected in 2005, Virginia citizens received approximately $1.51 in the way of federal spending. This ranks the state 10th highest nationally and is the same as in 1995 when Virginia also received $1.51 per dollar of taxes in federal spending (ranked 4th). Neighboring states and the amount of federal spending received per dollar of federal taxes collected were: Maryland ($1.30), West Virginia ($1.76), Kentucky ($1.51), Tennessee ($1.27), and North Carolina ($1.35).
Comparing the amount of federal taxes sent to Washington with the amount of federal spending coming back to the state

Tax Data from The Tax Foundation