The new 0.7% regional retail sales and use tax went into effect last week on October 1, 2020. This new tax applies throughout Central Virginia (including the city of Richmond, Charles City, Chesterfield, Goochland, Hanover (including the town of Ashland), Henrico, New Kent and Powhatan counties).

The new tax brings the total sales tax to 6% – consisting of the 4.3% sales tax, the new 0.7% regional state tax, and the 1% local option tax. Small business owners should make sure their POS systems are properly updated to reflect this change. This new tax will be allocated to the Central Virginia Transportation Authority. Notably, this new tax does NOT apply to food purchased for home consumption and qualifying essential personal hygiene products which will remain at the current 2.5% rate statewide.

You can review the full text of the tax bulletin from Virginia Department of Taxation here.

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