Ocity Logo ocity
Official Tax Guide

Virginia Taxes 2025: Income, Sales, and Property Tax Guide

Complete guide to Virginia state taxes. Income tax (2% - 5.75%), sales tax, and what you need to know before moving.

Updated January 15, 2026
5 min read

Virginia State Tax Guide 2025

Welcome to Virginia! As you prepare for your move to the Commonwealth, understanding the state's tax landscape is essential for financial planning. Virginia offers a moderate tax environment compared to national averages, with a balanced approach to income, sales, and property taxes.

This guide provides an overview of Virginia's tax structure for the 2025 tax year.

1. Income Tax

Virginia uses a progressive income tax system. This means your tax rate increases as your income rises, but it is structured in brackets rather than a single flat rate.

Tax Brackets (2025)

The state tax rates range from 2% to 5.75%. While specific income brackets are adjusted annually for inflation, the structure generally follows these tiers:

  • Lowest Rate (2%): Applies to the first portion of taxable income.
  • Middle Brackets: Rates gradually increase (e.g., 3%, 4%, 5%).
  • Highest Rate (5.75%): Applies to taxable income above the highest threshold.

Key Points:

  • Filing Status: Brackets differ for Single, Married Filing Jointly, and Head of Household filers.
  • Progressive vs. Flat: Unlike a flat tax system (where everyone pays the same percentage), Virginia’s progressive system ensures that higher earners contribute a larger percentage of their income to state taxes.
  • Standard Deduction: Virginia allows a standard deduction, which reduces your taxable income. The amount varies based on filing status and age.

2. Sales Tax

Virginia’s state sales tax rate is 5.3%. However, the total amount you pay at the register can be higher due to local additions.

How It Works

  • State Rate: 5.3% applies to most retail goods and services.
  • Local Taxes: Counties and cities in Virginia may add a local sales tax on top of the state rate. In some areas, special taxes for transportation or tourism may also apply.
  • Total Rate: While the state rate is fixed, the combined state and local rate typically falls between 5.3% and 7.0%, depending on the locality.

Note: Groceries are taxable in Virginia, though they are taxed at a reduced state rate of 1% (plus applicable local taxes).

3. Property Tax

Virginia does not have a statewide property tax; instead, property taxes are administered by local governments (counties and cities). Rates vary significantly across the state.

Overview

  • Taxing Authority: Local jurisdictions set their own tax rates (levies) based on assessed property values.
  • Rates: Because rates are local, there is no single "Virginia property tax rate." However, the effective tax rate generally aligns with or is slightly below the national average.
  • Vehicles: Virginia personal property tax is assessed annually on vehicles. This is a distinct tax from real estate property tax and is paid to your local county or city.

4. Other Taxes

Beyond income and sales, Virginia levies several other taxes that may impact your budget.

Gas Tax

Virginia’s gas tax is included in the price per gallon at the pump. As of 2025, the tax rate is variable and subject to legislative changes, but it generally averages around 25 to 26 cents per gallon for gasoline (plus federal taxes).

"Sin" Taxes

Virginia imposes excise taxes on specific goods, often referred to as "sin taxes":

  • Alcohol: Excise taxes vary significantly based on the type of beverage (beer, wine, or spirits) and alcohol content.
  • Tobacco & Vaping: There is a state tax on cigarettes (per pack) and a tax on nicotine vapor products.

Inheritance and Estate Tax

  • Inheritance Tax: Virginia does not have an inheritance tax. Beneficiaries generally do not pay state taxes on money or property inherited from a deceased person.
  • Estate Tax: Virginia does not have a separate estate tax. However, federal estate tax laws still apply depending on the value of the estate.

5. Retirees Taxes

Virginia is generally considered a retiree-friendly state regarding income tax, but specific rules apply.

Retirement Income Taxation

  • Taxed: Virginia generally taxes retirement income, including distributions from 401(k)s, IRAs, and defined benefit pensions.
  • Exemptions for Seniors: While the retirement income itself is taxable, Virginia offers a deduction for taxpayers age 65 and older (or permanently disabled).
    • 2025 Context: The deduction amount is subject to annual inflation adjustments. For reference, it has historically been up to $12,000 for single filers and $24,000 for married couples filing jointly (subject to income limitations).
  • Social Security: Social Security retirement benefits are not taxed by Virginia.

6. Comparison to Neighbors

Virginia’s tax profile offers a middle ground when compared to its immediate neighbors.

  • vs. Maryland & D.C.: Virginia is generally more tax-friendly. Maryland has a higher top income tax rate (over 5.75%) and a statewide property tax, while D.C. has a high income tax and sales tax.
  • vs. West Virginia: West Virginia has a lower flat income tax rate (as of 2025, moving toward elimination), but Virginia generally has a lower overall tax burden for middle-income earners due to property tax variations.
  • vs. North Carolina: North Carolina has a flat income tax rate (currently lower than VA's top rate), but Virginia often has lower average property tax rates compared to NC's rapid growth areas.
  • vs. Tennessee: Tennessee has no state income tax (on wages), which makes it attractive for high earners. However, Virginia offers a more balanced approach with services funded by its tax structure.

Disclaimer: Tax laws change frequently. The information provided in this guide is for general informational purposes only and is not a substitute for professional tax advice. Consult a CPA or tax professional for advice specific to your financial situation.