Virginia

Tax Rate Range: Low - 2.0%; High - 5.75%
Income Brackets: Lowest - $3,000; Highest - $17,000
Number of Brackets: 4
Personal Exemptions: Single - $900; Married - $1,800; Dependents - $900; Age 65 and over: $800
Standard Deduction: Single - $3,000; Married filing jointly - $5,000
Medical/Dental Deduction: Partial
Federal Income Tax Deduction: None
Retirement Income Taxes: Taxpayers age 65 and older are eligible for a deduction of $12,000, subject to the following income limitations. The deduction of $12,000 will be reduced by one dollar for each dollar that their Adjusted Federal Adjusted Gross Income exceeds the following thresholds: single - $50,000, married - $75,000 (total for both), married filing separately - $75,000 (total for both). "Adjusted federal adjusted gross income" means the federal adjusted gross income reduced by the taxable Social Security and Tier 1 Railroad Retirement benefits reported as a Virginia subtraction. Virginia law exempts Social Security and Tier 1 Railroad Retirement benefits fro taxation. If you are required to include any of your benefits in federal adjusted gross income, subtract that amount on your Virginia return. Pension income received while you are a Virginia resident is taxable by Virginia, even though it may have been received from another state. However, federal legislation enacted January 1, 1996 prohibits any state from taxing pension payments made to a resident of another state. Even though your pension from another state is taxable in Virginia, it should not be taxed by the other state. Virginia residents are subject to tax on their entire incomes, including federal annuities and military pensions. To the extent that these payments are reported in federal adjusted gross income, they are also subject to Virginia income tax.
Retired Military Pay: Follows federal tax rules. Military retirement income received by those awarded the Medal of Honor can be subtracted from federal gross income for tax purposes.
Military Disability Retired Pay: Disability Portion - Length of Service Pay; Member on September 24, 1975 - No tax; Not Member on September 24, 1975 - Taxed, unless combat incurred. Retired Pay - Based solely on disability: Member on September 24, 1975 - No tax; Not Member on September 24, 1975 - Taxed, unless all pay based on disability and disability resulted from armed conflict, extra-hazardous service, simulated war, or an instrumentality of war.
VA Disability Dependency and Indemnity Compensation: Not subject to federal or state taxes
Military SBP/SSBP/RCSBP/RSFPP: Generally subject to state taxes for those states with income tax. Check with state department of revenue office.

Sales Taxes

State Sales Tax: 5.0% (includes statewide local tax of 1%) (prescription and non-prescription drugs exempt); Food purchased for home consumption is taxed at 2%. An additional reduction of 0.5% is planned for July 1, 2007.
Gasoline Tax: 19.2 cents/gallon
Diesel Fuel Tax: 17.9 cents/gallon
(Local option tax adds 2% to fuel tax)
Cigarette Tax: 30 cents/pack of 20

Property Taxes

Property taxes are administered by the state's cities, counties and towns and are based on 100% of fair market value. Tangible personal property is also taxed at the local level and is based on a percentage of the original cost. A county, city, or town may enact a program for senior citizens and disabled persons allowing for exemption, deferral (or a combination of both) for property taxes on realty and manufactured homes owned and occupied as the sole dwelling of a person 65 years of age or older. Annual family income is generally limited to $50,000, but may be higher in certain Northern Virginia communities. Net worth limits may apply. Local tax officials should be contacted. There are no adjustments at the state level.

Estate Tax

There is no inheritance and the estate tax is limited and related to federal estate tax collection.
For further information, visit the Virginia Department of Taxation site or call 804-367-367-8031.