Do You Have Nexus in Virginia?
- Sales Tax
- December 8, 2015 | Suzanne Kearns
In most states, nexus is fairly straightforward. If you have a warehouse, sales representative, store, or office in a state, you have probably established nexus. If you have nexus, you are required to collect sales tax when you make a sale to someone living there via your ecommerce site.
This is tax law, however, so of course nothing's simple. Virginia, for one, approaches nexus in a slightly different way. Here's how to tell whether you have nexus in the Old Dominion State.
Are You Considered a “Dealer”?
The Virginia Department of Taxation begins the nexus process by first determining whether or not a seller falls under the category of “dealer.” You are considered a dealer in Virginia if you:
- Produce or manufacture tangible personal property and then sell it at retail, consume it, distribute it, or store the products to be used later in the state.
- Import or cause a product to be imported from any state or foreign country that is later sold, consumed, distributed, or stored in the state.
- Sell, consume, or store tangible personal property in the state.
- Have sold, consumed, or stored tangible personal property in the past and can’t prove the required sales tax has been paid.
- Lease or rent tangible personal property to another person or business.
- Lease or rent tangible personal property and pay the owner of that property without acquiring the title.
- Receive orders from a Virginia resident for a future delivery as a representative, agent, or solicitor of an out-of-state principal if that principal refuses to register as a dealer.
In other words, if you do business in Virginia, you likely are considered a “dealer."
So Do You Have Nexus?
Now that you’ve established whether or not you are considered a dealer under Virginia law, you will need to determine whether or not you have nexus and have to collect sales tax. Here are the requirements according to the Code of Virginia 58. 1-612.
- You have an office, warehouse, or any other type of business in Virginia directly or through an agent or subsidiary.
- You solicit business in Virginia using employees, agents, independent contractors, or other representatives.
- You advertise in newspapers or other periodicals that are published within Virginia, on billboards or posters located there, or through materials distributed in the state in any way except the United States mail.
- You make more than 12 deliveries a year to customers in Virginia by any means other than a common carrier.
- You solicit business in Virginia on a “continuous, regular, seasonal, or systematic basis” by using broadcasting an advertising campaign from a transmitter within the state.
- You solicit business in Virginia by mail on a “continuous, regular, seasonal, or systematic” way, and you benefit from banking, financing, debt collection, or marketing activities that occur in the state.
- Your business is controlled or owned by a business that also owns or controls another business within Virginia.
- You own a franchise that operates under the same trade name of one that is required to collect sales tax in Virginia.
- You own tangible personal property and lease or rent it to a Virginia consumer or offer products on approval to consumers in the state.
If you determine that you have nexus in the State of Virginia, you need to register as a dealer so you can begin collecting sales tax. You can do that using the States iReg service, which allows you to register online, or you can fill out a paper form and either fax or mail it in.
Still have questions about Virginia sales tax nexus? Consult our Guide to Virginia Sales Tax for answers!