Virginia Department of Taxation (Virginia Tax)

What it is

The Virginia Department of Taxation, known as Virginia Tax, administers the state's tax laws for individuals and businesses. For a founder, it is where a Virginia company gets its state tax accounts after forming the legal entity. Some businesses must also register with the State Corporation Commission, and employers register separately with the Virginia Employment Commission for unemployment insurance. Virginia Tax is modernizing its online services, so during the transition businesses may need to use different systems to file, pay and manage accounts.

Registering a new business

All new businesses are required to register online. The form asks for your FEIN, legal name, business and mailing addresses, entity type, the start date of Virginia business activity, a NAICS code and responsible party details. You can save a draft and return later. After registering you receive a Virginia Tax account number for each tax type, a sales tax certificate if applicable, and a Next Steps document. The page does not list a registration fee. Paper Form R-1 is only for businesses that cannot register online, for example those without a FEIN or SSN or those reopening a closed account.

Taxes most startups deal with

• Retail sales and use tax: the general rate is 5.3 percent in most of the state, 6 percent in Northern Virginia, Central Virginia and Hampton Roads, and higher in a few localities. Returns are due on the 20th of the month after each period, even with no sales, and must be filed electronically. See sales and use tax.
• Employer withholding: employers paying wages to Virginia employees register, file returns even when no tax is due, and file electronically. Filing is quarterly, monthly or semi-weekly depending on average monthly liability, and the annual VA-6 reconciliation plus W-2s are due January 31. See withholding tax.
• Corporation and pass-through entity income tax: covered on the agency's business pages, along with other business taxes.

Getting help

Business Customer Service is at 804.367.8037, Monday through Friday, 8:30 a.m. to 5 p.m. The agency suggests avoiding peak hours of 10 a.m. to 2 p.m., Mondays and the day after a holiday. The street address for express mail is 1957 Westmoreland Street, Richmond, VA 23230. The site also has guides on recordkeeping, common mistakes, reporting business changes and closing a business.

Why it matters in the DMV ecosystem

Any startup operating or hiring in Virginia, including Northern Virginia companies near DC, will need a Virginia Tax account early. Registering correctly at the start, choosing the right NAICS code and keeping up with electronic filing deadlines avoids penalties that can surprise first-time founders.