Taxes affect a multitude of business decisions such as job creation and retention, plant/headquarter location, competitiveness, the long-term health of a state’s economy, and transparency of the tax system. Taxes diminish profits and that is why Virginia, with its lower corporate and sales taxes, is an appealing option to companies.
According to the Tax Foundation, Virginia ranked 10th in the nation for corporate tax and sales tax component of the State Business Tax Climate. Data shows that the Virginia market is stable and experiencing economic growth while displaying that the state is heading in the right direction. Its broad sales tax, a sales tax that includes a wider range of consumer goods and services, makes taxing simpler while creating a stable stream of revenue. This stability makes Virginia an attractive state for companies to establish their business.
In 2017, Virginia had the lowest sales tax per capita at $469, out of 45 states and the District of Colombia. Our neighbors in Washington, D.C., had a sales tax per capita of $2,045, which ranked among the top five highest in the nation with the highest being Hawaii at $2,269. A broad sales tax base that includes more final consumer goods and services allows for sales tax to be reduced.