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State sales tax rises to 5.3%

House Bill 2313, enacted by the 2013 General Assembly, increases sales and use tax rates on July 1. There are two separate increases – one that affects the entire state, and a second one that affects only certain localities in Northern Virginia and Hampton Roads.

The statewide rate increase of 0.3 percent will raise the total tax rate from the current 5% to 5.3%. At the same time, an additional increase of 0.7% will take effect in the Northern Virginia and Hampton Roads regions.

Retailers and restaurants (which make sales of food for immediate consumption) are subject to the rate increases. Only qualifying sales of food for home consumption (grocery items, for example) are excluded from the rate increases. Retailers must update point-of-sale systems and collect sales tax using the new rates beginning July 1, 2013.

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