Tax Incentives
Property Tax Incentives
Virginia does not tax property at the state level, however real estate and tangible personal property are taxed at the local level. Notably, Williamsburg has the lowest real property tax rate ($0.54) of all cities in Virginia. Additionally, Virginia has a long list of items that are not taxed, including intangible property, manufacturer’s inventory, manufacturer’s furniture, fixtures, or corporate aircraft. Moreover, Virginia localities have the option of fully or partially exempting a number of other property types from taxation.
The Commonwealth of Virginia also offers a recycling equipment income tax credit equal to 10 percent of the equipment purchase price. Under the program, machinery and equipment must be used to manufacture, process, compound, or produce items from recyclable materials. Please contact the City of Williamsburg Office of Economic Development for more local property tax information.
Sales and Use Tax Exemptions
Virginia’s combined state and local sales and use tax is 5 percent, placing Virginia’s rate among the lowest in the nation. A seller is subject to a sales tax on gross receipts derived from retail sales or leases of taxable tangible personal property. However, Virginia offers some of the broadest sales and use tax exemptions in the United States, including manufacturers’ purchases used directly in production, purchases used in research and development, utilities delivered through lines, pipes, or mains, and items purchased for resale by distributors just to name a few.