How to Register for a Sales Tax Permit in Virginia

There are many steps to starting and running a business, from legal and regulatory obligations to the actual running of the business. Selecting your sources, if you plan on purchasing wholesale merchandise and reselling, finding your niche market, staying ahead of the competition, turning a profit: this is all part of the job. It is a chain of several links than can’t work when one is missing.

Now, you have taken your years of working as an employee as a course in running a company. Everywhere you worked, you decided to learn as much as possible, all the tips and tricks that will enable you to find the best deals, the best products, secure the largest profit margin. You are finally ready to put these skills to the test and go on your own, starting your own business.

However, this is the starting point of a business and you have never actually had a chance to see that process unfold, you joined your previous companies after they have been formed and registered. So in order to stay on the correct side of the law, you have to learn how to register your business and comply with all the regulatory requirements of the state of Virginia.

Registering a New Business in Virginia

To get your business-owning journey on the way you have to register a business first. The state of Virginia luckily provides you with a a number of options when it comes to starting up, and if you are unfamiliar with the steps needed to set up your business right, the Government of Virginia has created an online tool that makes your life really easy.

According to the government’s Business One Stop, the first step you take is to choose a legal structure for your business. This means that your business actually becomes a legal entity capable of owning a property, holding bank accounts and paying taxes. The state allows you to register under a number of structures, all with their respective advantages and limitations. Depending on the needs and the type of business you are going to conduct, you can choose between Sole Proprietorships, Limited Liability Companies (LLCs), General Partnerships, C-Corporation, S-Corporations and Benefit Corporations.

Once you know which type of legal structure you are going to choose, it is time to register your business and its name. Registration, especially for the small businesses, can be done through the Business One Stop. However, if the business structure is a complicated one, you will have to fill out forms and file them manually with the Virginia State Corporation Commission. Hiring a lawyer to help you with the matter is a smart move.

When choosing a name for your business you have to make sure that the name you’d like to use is not already taken by another company. This can also be done through the State Corporation Commission and you can register your trademarks and name with the United States Patent and Trademark Office.

The next step is to register for a Federal and state tax ID. In order to file for taxes or acquire any permits you will have to use either your social security number, or apply for a Federal Employer Identification Number (FEIN) from the IRS. This can be done online or by calling 267-941-1099. You can also apply by Fax or by mail by filling out and sending the Form SS-4 (Application for Employer Identification Number) to the relevant numbers and addresses listed below the article. Once you have obtained your EIN, you register with the Virginia Department of Taxation.

The next step is to acquire all the relevant permits and licenses and you can read more about it here. It certainly is advisable to start from your local office and ask whether you require local, county or state licenses for your business.

Virginia Sales Tax Permits

Before applying for a sales tax permit in the state of Virginia, you have verify if you tick certain boxes. You only need to apply for a sales tax permit if you have what is called a sales tax nexus in the state, which is a significant presence in the state. To have a sales tax nexus in Virginia you must have an office in the state, an employee or a private contractor, goods in a warehouse, you must own a real or personal property or have leased a property. You must have more than 12 deliveries of merchandise during a year in Virginia not carried out by common carriers and you have a sales tax nexus if you advertise in newspapers, periodicals, billboards or posters or by any other means that is not delivered by the US mail.

If you have established that you do have a sales tax nexus, you must then check whether the products or services you are selling are taxable. In general services are not taxable, however, if the service you provide contributes to the manufacturing of a product there is a chance you will have to file for tax on the products. Any tangible goods are taxable in the state of Virginia with certain exceptions that include some assistive medical devices, textbooks sold by institutions, software or protective clothing.

To register for a sales tax permit in Virginia go to the Virginia Department of Taxation’s website for businesses and register online. Your other option is to download the relevant forms and mail them to the VDT.

You are required to provide information about your business location as well as mailing address and contact info. You will also have to inform the department of the sales tax types your business will be responsible for as well as some other basic information.

Applying for a sales tax permit in Virginia is free of charge and the state requires businesses to register no later than the anticipated date that sales will begin. There is also no need to renew your sales tax once you have it.

Sales Tax Exemptions in Virginia

As with any state, the state of Virginia does enable some businesses to avoid paying tax. This usually includes businesses that are purchasing merchandise for resale. To be eligible for avoiding the tax, you have to provide the seller with a Commonwealth of Virginia Sales and Use Tax Certificate of Exemption (Form ST-10). The resale certificate can be used by “dealers who purchases tangible personal property for resale, or for lease or rental, or who purchases materials or containers to package tangible personal property for sale.”

The resale certificate should be filled out properly and signed in order to be valid. “A dealer who makes a sale without charging applicable sales tax must retain a copy of the exemption certificate on file to substantiate the sale was tax exempt under the law,” the Department of Taxation states.

If you are provided with a certificate of exemption you can either use the Virginia Sales and Use Tax Dealer Lookup through your online business account or by calling at 804.367.8037.

While this article provides input and direction into registering your business and applying for a sales tax permit, we strongly advise you to consult with your local authorities in regards to any specific requirements.

Contact Details

Internal Revenue Service

EIN Operation
Cincinnati, OH 45999
Fax: (855) 641-6935

Virginia Department of Taxation

Registration Unit
PO Box 1114
Richmond, VA 23218-1114
Phone: 804-367-8057
Fax: 804-367-2603

Commonwealth of Virginia State Corporation Commission

Tyler Building
1300 E. Main St.
Richmond, Virginia 23219
Phone: 804-371-9967

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