How to Get a Sales Tax Certificate in Virginia

Businesses that sell taxable goods or services in Virginia need a Sales Tax Certificate to collect and remit sales tax legally. This certificate, also known as a sales tax permit, is issued by the Virginia Department of Taxation to ensure compliance with state tax laws. Operating without it can result in penalties.

Securing the certificate requires meeting eligibility requirements, submitting an application, and staying compliant with tax obligations.

Registration Eligibility

Before applying, businesses must determine if they are required to collect sales tax in Virginia. Under the Code of Virginia 58.1-612, businesses with a physical presence—such as a storefront, warehouse, or office—must register. Out-of-state businesses exceeding $100,000 in gross revenue or conducting 200 or more transactions annually with Virginia customers must also register under the state’s economic nexus rules.

Eligible business structures include sole proprietorships, partnerships, corporations, and LLCs. A Virginia Tax Account Number is required before applying, serving as the business’s identifier for tax filings. If operating under a trade name, businesses must register their fictitious name with the State Corporation Commission.

Obtaining the Certificate

Businesses must apply for a Sales Tax Certificate through the Virginia Tax Online Services for Businesses portal. The application process involves creating an account, entering business details, and specifying the start date of taxable sales. Approvals are typically issued immediately.

During registration, businesses select a filing frequency based on estimated sales tax liability:

– Quarterly for businesses expecting to collect less than $100 per month
– Monthly for those collecting between $100 and $2,000 per month
– More frequent filings for collections exceeding $2,000 per month

Selecting the correct filing frequency is essential to avoid compliance issues. Once approved, businesses receive a Virginia Sales Tax Certificate of Registration, which must be displayed at their place of business. Separate registrations are required for multiple locations.

Documentation Requirements

Applying for a Virginia Sales Tax Certificate requires submitting business details and supporting documents. Corporations, partnerships, and multi-member LLCs must provide a Federal Employer Identification Number (FEIN) from the IRS. Sole proprietors without employees may use their Social Security Number, though obtaining a FEIN is recommended for separating personal and business taxes.

Required documents include:

– Articles of Incorporation (for corporations) or Articles of Organization (for LLCs)
– Partnership Agreement (for partnerships)
– Local business license (if required in the business’s jurisdiction)
– Certificate of Authority (for out-of-state businesses operating in Virginia)

Businesses selling regulated goods, such as alcohol, tobacco, or motor vehicles, must provide industry-specific licenses. Alcohol retailers need a Virginia Alcoholic Beverage Control (ABC) License, while vehicle dealers must submit a Virginia Motor Vehicle Dealer License.

Using the ST-10 Form

Businesses eligible for sales tax exemptions must use Form ST-10, the Sales and Use Tax Certificate of Exemption, to make tax-free purchases of goods intended for resale. This form ensures sales tax is collected only at the final consumer transaction.

To complete Form ST-10, businesses must provide their Virginia Sales Tax Account Number, the seller’s name and address, and a description of the purchased goods. An authorized representative must sign the form, certifying that the items will be used exclusively for resale or other exempt purposes. Misusing the form—such as claiming an exemption for non-qualifying purchases—can result in penalties, including repayment of unpaid tax with interest and fines under the Code of Virginia 58.1-635.

Maintaining Compliance

Once registered, businesses must collect and remit sales tax according to their assigned filing frequency. Late payments incur a 6% penalty per month, up to a maximum of 30% of the tax due, plus interest charges.

Businesses must maintain detailed records of taxable and exempt sales for at least three years, as required by the Code of Virginia 58.1-633. Proper record-keeping ensures accurate reporting and helps businesses prepare for audits.

Reasons for Revocation

Failure to comply with Virginia’s sales tax regulations can result in the revocation of a Sales Tax Certificate. The Virginia Department of Taxation may revoke a certificate if a business repeatedly fails to file returns, underreports taxable sales, or does not remit collected taxes. Unpaid tax liabilities can lead to enforcement actions, including liens or asset seizures.

Providing false information on tax filings or misusing exemption certificates can also lead to revocation. Fraudulently claiming tax-exempt purchases or intentionally underreporting revenue may result in additional penalties, including fines and potential criminal charges under the Code of Virginia 58.1-635. Businesses that cease operations or no longer meet registration requirements must formally cancel their certificate to avoid unnecessary tax obligations.