Vending Machine Sales Tax

What is it?

A tax on the sale of merchandise through vending machines. Dealers who place vending machines in locations throughout Virginia are responsible for the paying the tax. 

Non-vending machine dealers who sell some of their merchandise through vending machines (for example, gas station operators) are subject to the retail sales and use tax, not vending machine sales tax.

Tax Rate

  • Hampton Roads:  7%
    Includes the cities of Chesapeake, Franklin, Hampton, Newport News, Norfolk, Poquoson, Portsmouth, Suffolk, Virginia Beach, and Williamsburg, and the counties of Isle of Wight, James City, Southampton, and York.
  • Northern Virginia:  7%
    Includes the cities of Alexandria, Fairfax, Falls Church, Manassas, and Manassas Park, and the counties of Arlington, Fairfax, Loudoun, and Prince William.
  • Everywhere Else:  6.3%

The tax is based on the “cost price” (or manufactured price) of the merchandise sold in the vending machine.

What do you mean by “cost price?”

The price you pay for the merchandise you put into the vending machine to sell.

What do you mean by “manufactured price?”

If you make the merchandise you sell in the vending machine, it’s the costs of making the merchandise: raw materials, labor, overhead, etc.

Which should I use, cost price or manufactured price?

If you make or process the merchandise that goes into the vending machines, use manufactured price.  If not, use cost price.

How to register:

How to file and pay:

File the Vending Machine Dealers Return, Form VM-2 (with VM-2B). Based on your tax liability, we'll determine your filing frequency - either monthly or quarterly. Returns are due on the 20th of the month following the close of the filing period, even if there are no sales to report. 

You are required to file Form VM-2 electronically. If you are unable to file and pay electronically, please submit an Electronic Filing Waiver Request. 

For additional information refer to Va. Code § 58.1-614.

Prepaid Wireless E-911 Fee

What is it?

50ȼ per sale of prepaid wireless calling services. If you purchase more than 1 prepaid wireless calling service at a time, the fee applies to each service purchased.

Dealers who sell prepaid wireless services collect the fee at the time of the sale. Funds raised through this fee support 911 emergency operations throughout Virginia.

How to file and pay:

Complete the Prepaid Wireless Fee entries on your retail sales and use tax return, and file it with your sales and use tax. Use the appropriate form for your situation:

Tire Recycling Fee

What is it?

50ȼ per tire on the sale of new tires. You may pass this fee on to your customer if it’s separately stated. The fee does not apply to new tires for:

  • Any device moved exclusively by human power; 
  • Any device used exclusively upon stationary rails or tracks; or
  • Any device used exclusively for farming purposes, except a farm truck.

The fee supports the Virginia Department of Environmental Quality’s (DEQ) waste tire recycling efforts. Visit the DEQ website for more information.

How to register:

If you sell new tires at retail in Virginia, you need to register for the tire recycling fee. 

How to file and pay:

File the Tire Recycling Fee return, Form T-1, quarterly. Returns are due on the 20th of the month following the end of the quarter. Quarterly periods end March 31, June 30, Sept. 30, and Dec. 31.

For additional information please refer to Va. Code §58.1-640-644.

Digital Media Fee

What is it?

A fee on the in-room purchase or rental of any movie, video game, or other digital media. The fee is 10% of the sale or rental price, and applies to media offered in guest rooms rented out for continuous occupancy for fewer than 90 days, such as hotels and motels.

Exemptions

The following are exempt from the digital media fee if they present a valid exemption certificate:

  • Federal government agencies, when the reservation is made and paid for by the agency; and
  • Nonprofit entities with a valid exemption certificate issued by Virginia Tax, which specifically states that it is valid for the purchase of "taxable services."

Since the digital media fee applies to the purchase of a service, and not tangible personal property, retail sales and use tax exemption certificates do not apply. 

How to register:

How to file and pay:

File the Digital Media Fee Return, Form DM-1, monthly. Returns and payments are due on or before the 20th day of the month following the month in which the fee is billed. 

For additional information please refer to Virginia Tax Bulletin 09-5. 

Public Facilities

The Public Facilities Act provides a mechanism that allows a portion of the state sales tax revenues attributable to sales in new, renovated, or expanded public facilities in certain localities to be returned to the locality in which the facility is located. The locality is only entitled to the sales tax revenue generated by transactions taking place in the facility.

All businesses or persons making sales at the facility must register with Virginia Tax and report their sales and use tax on Form ST-9, Retail Sales and Use Tax Return.