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 12 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 2011, Virginia taxpayers work until April 12 to pay their total tax bill (ranked 14th highest nationally). That's the same date as national Tax Freedom Day (April 12). The Tax Freedom Days of neighboring states are as follows: Maryland, April 17 (ranked 4th nationally); West Virginia, March 31 (ranked 44th nationally); Kentucky, April 2 (ranked 42nd nationally); Tennessee, March 27 (ranked 49th nationally); and North Carolina, April 6 (ranked 27th nationally).
Full study of Tax Freedom Day, nationwide and in each state

Virginia's State and Local Tax Burden Below National Average
Virginia's state and local tax burden is currently estimated at 9.1% of income (33rd nationally), below the national average of 9.8%. Compared to the 1977 data, Virginia had a tax burden of 9.8% (25th nationally), decreasing 0.7% overall. Currently Virginia taxpayers pay $4,392 per capita in state and local taxes.
Virginia's State-Local Tax Burden, 1977-Present
Other States' State/Local Tax Burdens
Map of U.S. Showing all State's Burdens and Ranks
Historical Chart Comparing All States' State/Local Tax Burdens from 1977 to 2009 

Virginia's 2012 Business Tax Climate Ranks 26th
Virginia ranks 26th 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 rank as follows: Maryland (42nd), West Virginia (23rd), Kentucky (22nd), Tennessee (14th) and North Carolina (44th).
50-State Comparison of Business Tax Climates (data only)
2012 State Business Tax Climate Index (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 29th highest among states levying an individual income tax. Virginia's 2008 state-level individual income tax collections were $1,304 per person, which ranked 8th 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 35th highest nationally. In 2008, state-level corporate tax collections (excluding local taxes) were $101 per capita, which ranked 39th highest nationally.
50-State Table of Corporate Income Tax Rates, 2000-2009
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 Sales and Excise Taxes
Virginia levies a 5% state-level general sales or use tax on consumers, below the national median of 5.85%. Virginia localities are required to collect a 1% local sales tax as well, however. In 2007 combined state and local general and selective sales tax collections were $1,111 per person, which ranks 43rd highest nationally. Virginia's gasoline tax stands at 19.5 cents per gallon, ranking 40th highest nationally. Virginia's cigarette tax stands at 30 cents per pack of twenty and ranks 48th highest nationally. The sales tax was adopted in 1966, the gasoline tax in 1923 and the cigarette tax in 1960.
50-state table of sales, cigarette, gas, beer, wine, and spirits tax rates
50-State Table of State and Local General and Selective Sales Tax Collections Per Capita

Virginia Property Taxes
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 $1,212.41 per capita in property taxes in fiscal year 2006, which is the latest year the Census Bureau published state-by-state property tax collections. At the state level, Virginia collected $2.63 per capita during FY 2006, making its combined state/local property taxes $1,215.05, which ranks 18th 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

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