How to Pay Your Virginia Excise Tax

The Virginia Sales and Use Tax is either 4.15% of the vehicle’s gross sale price or $75, whichever is greater.
Written by Zachary Morgan
Reviewed by Hillary Kobayashi
Whenever a vehicle is sold or the ownership changes in
, the state collects a Sales and Use Tax (SUT) of either 4.15% of the vehicle’s purchase price or $75, whichever is greater.
As most of us know, taxes are one of two things that are guaranteed in this life (and the other thing is even less fun somehow). Still, there’s no getting around them, so it’s best to familiarize yourself with the process of calculating and paying taxes.
Here to guide you through the ins and outs of Virginia’s excise (Sales and Use) tax is
. In this article, we’ll cover what you need to know about the state excise tax: who collects it, how much you’ll have to pay, and who is exempt.

What is an excise tax in Virginia?

An excise tax is an extra fee collected during the sale of certain manufactured goods—usually those with inherent health or environmental risk factors. Cigarettes, alcohol, and soft drinks are good examples of items that usually have an excise tax. When it comes to cars, the tax is justified thanks to the environmental damage caused by exhaust emissions.
In Virginia, the vehicle excise tax is called the Sales and Use Tax (SUT). While other states charge a sales tax and an excise tax, the SUT is the only
car sales tax in Virginia
The parameters for the Virginia SUT are laid out in
Section 58.1
of the state legal code, but behind that wall of legal text lies a very simple formula. The Virginia Sales and Use Tax is either 4.15% of the vehicle’s gross sales price or $75, whichever is greater. 
The gross sales price is what you paid for the vehicle after any rebates or incentives, but it does not include other price reductions, like trade-in credit or unpaid liens. In addition, the SUT is levied whenever a vehicle is titled or the ownership changes, so you should try to get it paid within 30 days of purchasing your new vehicle.
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Calculating your SUT tax payment

If you want to know how much you can expect to pay for your SUT tax, all you need is a calculator. Remember that the rate is either 4.15% of the gross sales price or $75 (whichever is greater) and that the trade-in value does not affect the taxed price.
For example, let’s say you purchased a
Toyota RAV4
for $35,000 and traded in your old vehicle for $5,000 in credit. Even though you’re only paying $30,000 for your new car, the gross sales price as far as your SUT payment is concerned is still $35,000. Therefore, you would pay 4.15% of $35,000—$1,452.50

Penalties for nonpayment

Virginia doesn’t mess around when it comes to collecting taxes. If you read a little bit more of
Section 58.1
, you’ll see that the penalty for evading or cheating the SUT tax is a Class 3 Misdemeanor that carries up to $500 in fines if you’re found guilty. 
There’s also a possibility that you could receive a DMV stop for delinquent taxes. This means that a hold will be placed on your driving and vehicle records and you won’t be able to process any transactions with the DMV until it is removed. 
Having a DMV stop on your record is like being legally (but not physically) locked out of your car, so it’s best to pay your taxes on time to make sure it never happens to you!

How to avoid excise tax in Virginia

Most of us simply have to bite the bullet and pay the Virginia SUT tax. There is, however, a fairly extensive list of exemptions to that rule. Most are meant for government agencies and charitable institutions, but not all of them. Certain exemptions will require you to fill out a
Statement of Tax Exemption
in order to confirm your status.
Other exemptions from the SUT tax include:
  • Disabled veterans
  • Members of a Native American tribe recognized in the state of Virginia, including the Mattaponi, Pamunkey, and Chickahominy tribes
  • People who purchased their car in a different state over 12 months before (with proof of sales tax paid)
  • Vehicles purchased with the sole intention of being used during a driver’s education course
These are only a few of the possible SUT tax exemptions in Virginia. For a complete list, check
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