Every US state makes their own rules and laws around the taxability of certain products. Many states, Virginia included, treat certain food, like groceries, a little differently than other items when it comes to how much sales tax a business should charge.
This post will explain grocery, meal and beverage taxability in Virginia.
Are groceries taxable in Virginia?
Groceries, or “food for home consumption” are taxable in Virginia, but at a reduced rate of 2.5% throughout the state. (Source)
In Virginia, the definition of food for home consumption includes most staple grocery food items and cold prepared foods packaged for home consumption. Specifically excluded are alcoholic beverages, tobacco, and prepared hot foods sold for immediate consumption on and off the premises.
Are meals taxable in Virginia?
“Prepared hot food sold for immediate consumption on or off the premises” in Virginia are taxed at the full combined state + local sales tax rate.
Virginia does exempt some prepared meals, such as cold prepared sandwiches from the definition of “prepared hot food sold for immediate consumption.” For example, cold sandwiches, cold salads and salad bar food packaged for home consumption would be taxed at the lower 2.5% sales tax rate. You can read Virginia’s guidance on what constitutes “prepared hot food sold for immediate consumption” here.
Are beverages taxable in Virginia?
Most (non-alcoholic) drinks in Virginia, even including soft drinks, are taxed at the 2.5% food rate. You can read more about drink taxability in Virginia here.
How to Always Collect the Correct Amount of Sales Tax in Virginia
Do you sell groceries, meals or beverages and are you required to collect sales tax in Virginia? Then figuring out what is grocery food and what is “hot food prepared for immediate consumption” may sound like a huge headache.
TaxJar is here to help!
With the TaxJar API, you can be sure you’re collecting the right amount of sales tax on every transaction. Our product tax codes ensure you do collect sales tax on that hot prepared meal but don’t collect sales tax on a loaf of bread.
Not to mention, most eCommerce businesses have nexus in multiple states. For example, groceries are taxable in some states, but non-taxable in others. Or, like in Virginia, they are taxable at a reduced rate. With TaxJar, you’ll collect the right amount of sales tax from every customer, in every state, every time.
Further food and meal taxability resources:
- Sales Tax by State: Are grocery items taxable?
- Sales Tax by State: To-Go Restaurant Orders
- Is the food I sell on my food truck taxable?
- Virginia Sales Tax Guide for Businesses
Ready to automate sales tax collection, reporting and filing? Click here for more on how TaxJar can take the headache out of sales tax in your food & beverage business.