Virginia has a graduated state individual income tax, with rates ranging from 2.00 percent to 5.75 percent. There are also jurisdictions that collect local income taxes. Virginia has a flat 6.00 percent corporate income tax rate, a 5.30 percent state sales tax rate (including a mandatory 1 percent local add-on), and an average combined state and local sales tax rate of 5.77 percent. Virginia has a 0.78 percent effective property tax rate on owner-occupied housing value. Virginia does not have an estate tax or inheritance tax. Virginia’s gas tax is 41.6 cents per gallon, and its cigarette excise tax is $0.60 per pack of 20 cigarettes.
Virginia raises tax revenue primarily through property taxes (30.8 percent of total state and local tax revenue), individual income taxes (27.1 percent), and other taxes (19.8 percent). Virginia collects $7,043 in state and local tax collections per capita, carries $9,182 in state and local debt per capita, and has a 93 percent funded ratio of public pension plans. Virginia’s tax system ranks 30th overall on the 2026 State Tax Competitiveness Index.
Each state’s tax code is a multifaceted system with many moving parts, and Virginia is no exception. Use the tabs below to compare Virginia taxes with other states and to see how Virginia raises tax revenue. You can also browse our tax maps, which are compiled from our annual publication, Facts & Figures 2026: How Does Your State Compare?
Get facts about taxes in your state and around the US
The State Tax Competitiveness Index enables policymakers, taxpayers, and business leaders to gauge how their states’ tax systems compare. While there are many ways to show how much state governments collect in taxes, the Index evaluates how well states structure their tax systems and provides a road map for improvement.
122 min read
Facts & Figures serves as a one-stop state tax data resource that compares all 50 states on over 40 measures of tax rates, collections, burdens, and more.
2 min read
Individual income taxes are a major source of state government revenue, accounting for more than a third of state tax collections. How do income taxes compare in your state?
9 min read
Retail sales taxes are an essential part of most states’ revenue toolkits, responsible for nearly a quarter of combined state and local tax collections.
18 min read
Forty-four states levy a corporate income tax, with top rates ranging from a 2 percent flat rate in North Carolina to an 11.5 percent top marginal rate in New Jersey. Four states—Georgia, Nebraska, North Carolina, and Pennsylvania—reduced their corporate income tax rates effective January 1, 2026.
5 min read
Property taxes are the primary tool for financing local governments. While no taxpayers in high-tax jurisdictions will be celebrating their yearly payments, property taxes are largely rooted in the benefit principle of taxation: the people paying the property tax bills are most often the ones benefiting from the services.
9 min read
Reforming economic nexus thresholds would not only be better for businesses but for states as well. It is more cost-effective for states to focus on—and simplify—compliance for a reasonable number of sellers than to impose rules that have low compliance and are costly to administer.
4 min read
Do taxes affect individuals’ decisions regarding where to live and work? Can high taxes cause the outmigration of wealthy individuals?
5 min read
Does your state have a small business exemption for machinery and equipment?
3 min read
Expanding Virginia’s sales tax base to include B2B digital transactions could lead to tax pyramiding, hide the true cost of government, and make the sales tax system much less neutral and transparent.
5 min read
Individual income taxes are a major source of state government revenue, accounting for more than a third of state tax collections. How do income taxes compare in your state?
8 min read
Short FormWorking from home is great. The tax complications? Not so much.
4 min read
Retail sales taxes are an essential part of most states’ revenue toolkits, responsible for 32 percent of state tax collections and 13 percent of local tax collections (24 percent of combined collections).
9 min read
Graduated corporate rates are inequitable—that is, the size of a corporation bears no necessary relation to the income levels of the owners.
7 min read
The pandemic has accelerated changes to the way we live and work, making it far easier for people to move—and they have. As states work to maintain their competitive advantage, they should pay attention to where people are moving, and try to understand why.
5 min read
Virginia Governor Youngkin unveiled the contours of a tax reform plan incorporated into his forthcoming budget, which includes three major structural elements: a reduction in the individual income tax rate, a 0.9 percentage point increase in the sales tax rate, and the broadening of the sales tax base to include some “new economy” digital services.
6 min read
