If you want to avoid paying the 5.3% to 7% sales tax rate on items your business buys just to sell back to customers, you need to complete the process of getting a reseller permit or resale certificate in Virginia. During the business registration process in the state, you get the chance to file for your state tax account number needed for the sales tax exemption form that you'll hand to any company from which you're buying products to resell.
However, if your business's activities have changed, you can easily update your business registration on the Virginia Department of Taxation website or fill out a portion of the business registration form to mail or fax to the department.
Resale License in Virginia Overview
The state regulates who must obtain a resale certificate in VA and has criteria for in-state and out-of-state dealers. Generally, you need to complete the process of getting the state tax account number whenever you'll sell anything physical for which buyers must pay tax, and the same applies if you rent property or use services. Virginia will consider you an in-state dealer if you've established a physical business location, and you're an out-of-state dealer if you're based somewhere else and Virginia customers account for at least 200 transactions or $100,000 in annual sales.
Getting this license means you'll need to complete state tax reporting and payment requirements. At the same time, you become eligible to buy things to resell without incurring Virginia's sales tax.
Complete Virginia Sales Tax Registration
To get your sales and use tax account set up with Virginia, head to the Virginia Department of Taxation website and click the "Businesses" option. Locate the "Filing" list to see the option for "Sales and Use Tax". Scrolling down this page will link you to the online sales tax registration system, where you can log in using your business's account and enter your sales and use tax information. It will also display a link to Form R-1, which is a business registration form with a retail sales and use tax section that you can fill out by hand and either fax or mail.
Both applications ask you for this information in order to get a state tax account number and sales tax certificate to display at your business:
- First expected sales date
- Tax filing preferences
- Months when you operate
- Business locations
- Filer's contact information
- Selection of other sales and use taxes for which you might be responsible (such as communications, recycling, car rental, litter, excise or commodity taxes)
- Signature, title, date and phone number
Submit Sales Tax Exemption Form
As soon as you've received your Virginia tax account number and sales tax certificate, you can begin making resale purchases using Form ST-10, Commonwealth of Virginia Sales and Use Tax Certificate of Exemption. Before submitting this form to any vendor with which you do business, you'll fill out the following details:
- Supplier name, date and full address
- How your business will use what you're buying (resale, lease, packaging materials, etc.)
- Your company's name, Virginia tax account number, address and industry
- Your job title and signature
Once you hand it over, your vendor won't charge you Virginia sales tax, and you'll need to handle the sales tax when the items get sold to your customers. While it's your responsibility to complete Form ST-10 honestly, your vendor will usually call a state hotline to verify that you have the authority to make tax-exempt purchases, and it will store a copy for its own records in case the state decides to conduct an audit. You'll also find it a good idea to save a copy of Form ST-10 for your business records.
- Virginia Department of Taxation: Retail Sales and Use Tax
- Virginia Department of Taxation: Register a Business in Virginia
- Virginia Department of Taxation: Form R-1, Virginia Department of Taxation Business Registration Form
- Virginia Department of Taxation: Form ST-10, Commonwealth of Virginia Sales and Use Tax Certificate of Exemption
- Taxify: Your Guide to Register for a Sales Tax Permit in Virginia
- TaxJar: How to Use a Virginia Resale Certificate