Sales and Use Tax

The City levies a 1% retail sales tax. The is added to the State's 5% sales tax collected by retail merchants when goods and services are purchased. Sales of eligible food items are subject to a reduced state tax rate of 1.5%.
Page updated on September 19, 2024 at 2:52 PM
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Overview

The City levies a one percent sales tax to provide revenue for the general fund. The tax is added to the state's sales tax rates as shown below.

  State Rate  City Rate  Total Combined Rate 
Retail Sales and Use Tax  5.0% 1.0% 6.0%
Tax on Eligible Food Items  1.5% 1.0% 2.5%
Vending Machine Sales Tax  6.0% 1.0% 7.0%

 

Businesses subject to sales tax must submit a monthly report to the Department of Taxation. 

New Businesses

Virginia Department of Taxation's Business Registration Pamphlet (PDF)

Any person starting a business in Virginia must register with the State prior to opening the business. Registration may be completed online or by filing Form R-1 with the Virginia Department of Taxation. Businesses located in the City of Alexandria that collect sales tax must ensure that the Business Locality Code (or FIPS Code) on their R-1 is 51510. To ensure that the business is registered in the correct jurisdiction, the business owner may look up the business's FIPS Code here or follow the instructions below.

Businesses with the following zip codes are located in the City of Alexandria:

  • 22301
  • 22305
  • 22314

The 22302, 22304, 22311 and 22312 zip codes are shared between Fairfax County and the City of Alexandria. The 22206 zip code is shared between Arlington County and the City of Alexandria.

If the business is located in the 22302, 22304, 22311, 22312, or 22206 zip code, the business owner may verify the business's locality via the United States Postal Service website by entering the business address and clicking on "Mailing Industry Information."

Exemptions for Government Purchases

Purchase of meals, lodging, or other accommodations by the federal government or its employees traveling on government business are exempt from the tax provided payment for the meals, lodging, or other accommodations is made directly by the federal government pursuant to an official purchase order (e.g. by direct billing to the government or use of government credit cards paid by the government).

Sales to federally chartered credit unions are also exempt from the tax.

For More Information

For more information, please visit the Virginia Department of Taxation's Sales and Use Tax page or contact the Department at 804.367.8037.