October 17, 2018

Virginia: Who Pays? 6th Edition


VIRGINIA

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VIRGINIA STATE AND LOCAL TAXES

Taxes as Share of Family Income

Top 20%
Income Group Lowest
20%		 Second
20%		 Middle
20%		 Fourth
20%		 Next
15%		 Next
4%		 Top
1%
Income Range Less than
$22,000		 $22,000 to
$39,100		 $39,100 to
$64,600		 $64,600 to
$116,600		 $116,600 to
$244,000		 $244,000 to
$587,200		 over
$587,200
Average Income $12,900 $29,300 $50,800 $87,100 $162,600 $337,800 $1,415,500
Sales & Excise Taxes 5.4% 4.4% 3.5% 2.8% 2.0% 1.3% 0.6%
General Sales – Individuals 3.1% 2.6% 2.2% 1.8% 1.3% 0.9% 0.4%
Other Sales & Excise – Ind. 1.1% 0.8% 0.6% 0.4% 0.3% 0.2% 0.1%
Sales & Excise on Business 1.2% 1.0% 0.8% 0.6% 0.4% 0.2% 0.1%
Property Taxes 3.1% 2.5% 2.4% 2.7% 2.6% 2.3% 1.8%
Home, Rent, Car – Ind. 3.0% 2.4% 2.3% 2.6% 2.4% 1.9% 0.5%
Other Property Taxes 0.1% 0.1% 0.1% 0.1% 0.2% 0.4% 1.3%
Income Taxes 1.2% 2.5% 3.3% 3.8% 4.0% 4.4% 4.6%
Personal Income Tax 1.2% 2.4% 3.3% 3.8% 4.0% 4.3% 4.5%
Corporate Income Tax 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.1%
TOTAL TAXES 9.8% 9.3% 9.2% 9.3% 8.6% 8.0% 7.0%

Individual figures may not sum to totals due to rounding. Download the table

TAX FEATURES DRIVING THE DATA in Virginia

Progressive Features

Regressive Features
  • Graduated personal income tax structure, though the top rate starts at $17,000
  • Provides an Earned Income Tax Credit (EITC)
  • EITC is non-refundable
  • Narrow income tax brackets mean majority of taxpayers pay top income tax rate
  • Fails to provide refundable income tax credits to offset sales, excise, and property taxes or to help workers and their families
  • State sales tax base includes groceries, though taxed at a lower rate
  • Fails to use combined reporting as part of its corporate income tax
  • Does not levy a tax on estates or inheritances

ITEP Tax Inequality Index

According to ITEP’s Tax Inequality Index, which measures the impact of each state’s tax system on income inequality, Virginia has the 33rd most unfair state and local tax system in the country. Incomes are more unequal in Virginia after state and local taxes are collected than before. (See Appendix B for state-by-state rankings and the methodology section for additional detail on the index.)

Note: Figures show permanent law in Virginia enacted through September 10, 2018, at 2015 income levels. Top figure represents total state and local taxes as a share of non-elderly income. The sixth edition of Who Pays does not include the impact of the federal deduction for state and local taxes (SALT) because policy changes in the 2017 federal Tax Cuts and Jobs Act temporarily limited the extent to which the SALT deduction functions as a generalized offset of state and local taxes.