Navigating the complexities of state taxes can be daunting, but understanding Virginia's tax landscape is essential for residents and newcomers alike.
In this guide, we'll explore key components of The Old Dominion State's tax system, from income and sales taxes to property taxes and retirement benefits.
Virginia tax: Overview
In Virginia, some folks might pay a little more in income taxes than the national average, but there’s a silver lining. Sales taxes here are pretty low, with the average combined rate coming in at about 5.7%. Property taxes are also on the lighter side compared to many other states.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
And if you’re retired, there’s even more good news. Virginia doesn’t tax Social Security benefits, and Railroad Retirement benefits are exempt from tax.
In the news: Starting January 1, 2026, Fairfax County will begin charging a 4% meal tax on prepared foods and drinks. The new tax will apply to purchases from restaurants, food trucks, and prepared foods from grocery stores, but it won’t affect the cities of Fairfax, Herndon, Vienna, or the town of Clifton.
When combined with Virginia’s 6% sales tax, the total tax rate on prepared meals in most of Fairfax County will reach 10%.
County leaders expect the tax to bring in between $65 million and $68 million in just the first half of the year, with the money going toward general county services and helping to ease the burden on property taxpayers.
Also, Virginia will again issue tax rebates to eligible residents in 2025. For more information, see 2025 Virginia Tax Rebates Coming Soon? What to Know.
[Data for this state tax guide was gathered from a number of sources including the Census Bureau, the state’s government website, the Sales Tax Handbook, and the Tax Foundation. Property taxes are cited as a rate percentage rather than the assessed value.]
Virginia income tax
Virginia Income Tax Range
Income tax rates for 2025 in Virginia range from 2% to 5.75%.
Virginia retirement taxes
Virginia taxpayers age 65 and older can generally claim a deduction of up to $12,000. If you were born on or after January 2, 1939, the amount of the deduction is based on your income.
- Social Security: Not taxable
- Pensions: Taxable
- 401(k) and IRA Distributions: Taxable
Virginia sales tax
Virginia's sales tax is 5.30%. The average local sales tax rate is 0.47%, making the average combined state and local rate 5.77%, according to the Tax Foundation.
- Groceries: Taxable (1% state rate; local rates may apply)
- Clothing: Taxable
- Motor Vehicles: Exempt from ordinary sales tax, but taxable under special 4.15% excise tax.
- Prescription Drugs: Exempt
How much is property tax in Virginia?
In Virginia, the median property tax rate is 0.77% of assessed home value, according to the Tax Foundation.
For information about cheap Virginia property tax bills, check out Kiplinger's report, Ten Cheapest Places to Live in Virginia.
Virginia gas tax
Product | Tax Amount |
|---|---|
Gasoline | $0.16 per gallon |
Diesel | $0.20 per gallon |
Source: Sales Tax Handbook
Virginia tax on tobacco and alcohol
Product | Tax Amount |
|---|---|
Cigarettes | $0.30 per pack |
Other Tobacco Products | 10% of the manufacturer's price |
Medical Marijuana | 5.30% |
Recreational Marijuana | 26.30% (5.3% cannabis sales tax + 21% excise tax) |
Source: Sales Tax Handbook
Product | Tax Amount |
|---|---|
Beer | $0.26 per gallon |
Wine | $1.51 per gallon |
Liquor | state-controlled |
Source: Sales Tax Handbook
Virginia estate and inheritance taxes
Virginia has no estate or inheritance tax.
Related Content
-
3 Ways High-Income Earners Can Maximize Their Charitable Donations in 2025Tax Deductions New charitable giving tax rules will soon lower your deduction for donations to charity — here’s what you should do now.
-
Another State Quietly Bans Capital Gains Taxes: Will Others Follow?Capital Gains A constitutional amendment blocking future taxes on realized and unrealized capital could raise interesting questions for other states.
-
3 Ways High-Income Earners Can Maximize Their Charitable Donations in 2025
Tax Deductions New charitable giving tax rules will soon lower your deduction for donations to charity — here’s what you should do now.
-
Another State Quietly Bans Capital Gains Taxes: Will Others Follow?
Capital Gains A constitutional amendment blocking future taxes on realized and unrealized capital could raise interesting questions for other states.
-
An HSA Sounds Great for Taxes: Here’s Why It Might Not Be Right for YouHealth Savings Even with the promise of ‘triple tax benefits,’ a health savings account might not be the best health plan option for everyone.
-
Emergency Tax Bill Ends $6,000 Senior Deduction and Tip, Overtime Tax Breaks in D.C.Tax Law Here’s how state tax conformity rules could immediately raise your income tax liability.
-
New RMD Rules: Can You Pass This Retirement Distributions Tax Quiz?Quiz Take our RMD quiz to test your retirement tax knowledge. Learn about RMD rules, IRS deadlines, and tax penalties that could shrink your savings.
-
Ten Retirement Tax Plan Moves to Make Before December 31Retirement Taxes Proactively reviewing your health coverage, RMDs, and IRAs can lower retirement taxes in 2025 and 2026. Here’s how.
-
IRS Updates Capital Gains Tax Thresholds for 2026: Here’s What’s NewCapital Gains The IRS has increased the capital gains tax income thresholds for 2026. You'll need this information to help minimize your tax burden.
-
When to Hire a Tax Pro: The Age Most Americans Switch to a CPATax Tips Taxpayers may outsource their financial stress by a specific age. Find out when you should hire a tax preparer.
