Virginia Sales Tax Exemption: The Complete Guide for Businesses (Form ST-10, Manufacturing & Agriculture)
If your business buys inventory, machinery, or production materials in Virginia, you may be paying sales tax — a combined 5.3% to 7% depending on the region — on purchases that legally qualify for a Virginia sales tax exemption. Across a year of purchasing, that overpayment adds up, and in most cases the exemption is available the moment you hand your vendor the right certificate.
Virginia is distinctive in one way: instead of a single all-purpose form, it uses a family of exemption certificates — a different form for resale, manufacturing, government, and nonprofits. This guide breaks down exactly how the Virginia sales tax exemption works for businesses in 2026: who qualifies, which certificate to use, the “used directly” manufacturing test, and how to recover tax you’ve already overpaid.
What Is a Virginia Sales Tax Exemption?
Virginia imposes a 4.3% state sales and use tax, plus a mandatory 1% local tax that applies in every locality — a baseline combined rate of 5.3%. Certain regions add more: Northern Virginia and Hampton Roads reach 6%, and the Historic Triangle (Williamsburg, James City County, and York County) hits 7%, the highest in the Commonwealth. Virginia is destination-based, so the rate depends on where the goods are delivered.
A Virginia sales tax exemption lets a qualified buyer purchase goods without paying that tax at the point of sale. Items become exempt two ways:
- Product-based exemptions apply automatically to certain goods for every buyer — for example, prescription drugs. (Groceries and essential personal hygiene products are taxed at a reduced rate rather than exempt.) No certificate is required.
- Buyer- or use-based exemptions depend on who you are or how you’ll use the item — resale inventory, manufacturing machinery, agricultural production, and more. These require the correct exemption certificate.
For buyer- and use-based exemptions, you don’t file anything with the state for advance approval (nonprofits are the exception). You complete the right certificate and give it to your vendor, who keeps it on file and stops charging tax. Virginia requires sellers to retain properly completed certificates — a missing or invalid certificate can shift liability, penalties, and interest onto the seller, which is why vendors are strict.
Who Qualifies for a Sales Tax Exemption in Virginia?
For businesses, Virginia recognizes several use- and buyer-based exemption categories, each with its own certificate:
- Resellers / retailers — Registered Virginia dealers buying inventory for resale, lease, or rental, or packaging materials (Form ST-10).
- Manufacturers / processors — Machinery, tools, materials, fuel, and supplies used directly in manufacturing, processing, refining, mining, or converting products for sale or resale (Form ST-11).
- Agricultural producers — Items used directly in agricultural production for market (Form ST-18).
- Government units — The Commonwealth, its political subdivisions, and the United States (Form ST-12).
- Semiconductor and specialized manufacturers — Targeted exemptions (Form ST-11A / ST-11B).
- Out-of-state buyers — Limited; Virginia is not a Streamlined member and accepts multijurisdiction forms only if they mirror Virginia’s content and include a Virginia registration number.
Important exception — nonprofits: A Virginia nonprofit is not automatically exempt. It must apply through Nonprofit Online and receive an exemption certificate before it can buy tax-free. See the Virginia Nonprofit section below.
Virginia’s Exemption Certificates: One Form Per Purpose
Unlike states with a single all-purpose certificate, Virginia assigns a specific form to each exemption. Using the wrong one is a common reason exemptions get rejected. The core business forms:
| Exemption | Form | Notes |
|---|---|---|
| Resale, lease/rental, packaging | ST-10 | Registered Virginia dealers |
| Manufacturing / processing / mining | ST-11 | Items used directly in production |
| Semiconductor manufacturing | ST-11A / ST-11B | Specialized manufacturing categories |
| Government (state, local, federal) | ST-12 | Commonwealth, subdivisions, U.S. |
| Agricultural production | ST-18 | Items used directly in ag production |
| Nonprofit | Nonprofit Online | Apply first; certificate issued on approval |
The Resale Exemption (Form ST-10)
For most retailers and wholesalers, the workhorse is Form ST-10. It lets a registered Virginia dealer buy inventory tax-free because tax will be collected when the goods are resold — and it also covers property bought for taxable lease or rental, and packaging materials marketed with the product.
What You Need
- Registration as a Virginia dealer with a Virginia sales tax account (registration number).
- A completed ST-10 given to your vendor; Virginia permits blanket certificates for ongoing purchases.
What It Can’t Be Used For
The resale certificate covers goods you’ll resell — not items you consume in running the business. Virginia’s regulations are explicit: a garage or service station can’t use ST-10 to buy jacks or hand tools; a hotel or restaurant can’t use it for furniture, fixtures, linens, or heating fuel. Those purchases are taxable, and no exemption certificate offered for them is acceptable. Misusing ST-10 this way is a frequent audit adjustment.
The Manufacturing Exemption (Form ST-11)
Virginia offers a broad manufacturing exemption — and the key word is “used directly.” Form ST-11 covers:
- Industrial materials that enter into production or become a component part of the finished product, or that are coated on or impregnated into the product.
- Machinery, tools, and repair/replacement parts, equipment, fuel, power, energy, or supplies used directly in manufacturing, processing, refining, mining, or converting products for sale or resale.
- Items used directly in drilling or extraction of natural gas or oil for sale.
The “used directly” standard is where businesses go wrong in both directions. Production-line machinery and consumables typically qualify. But Virginia’s regulations make clear that tires and batteries for delivery equipment, tools for repairing machinery, and office furniture, machines, or supplies do not qualify under ST-11 — they’re used around production, not directly in it. Getting this line right is exactly where a review finds both exposure and refunds.
The Agricultural Exemption (Form ST-18)
Virginia exempts items used directly in agricultural production for market — and related categories such as agricultural products purchased to acquire raw products for use or consumption, and materials used directly to make feed for sale or resale. Farmers and qualifying producers use Form ST-18. As with manufacturing, the test is direct use in production, not general farm or business use.
How to Get a Virginia Sales Tax Exemption (Step-by-Step for Businesses)
Step 1 — Identify the Right Certificate
Match your situation to the correct form: resale (ST-10), manufacturing (ST-11), agriculture (ST-18), or government (ST-12). In Virginia, choosing the right form is half the battle.
Step 2 — Register as a Virginia Dealer (Resellers)
Resellers register for a Virginia sales tax account with Virginia Tax to obtain a registration number, which goes on Form ST-10. Manufacturers and farmers use their respective certificates with the required identifying information.
Step 3 — Gather Your Documentation
- Your Virginia sales tax registration number (resale)
- Your FEIN and business details
- A clear description of the items and their qualifying, direct use
Step 4 — Complete the Correct Certificate
Complete every field and check the applicable exemption category on the form. An incomplete certificate isn’t valid and won’t protect the transaction at audit. Use a blanket certificate for a recurring vendor relationship.
Step 5 — Give the Certificate to the Vendor (Not the State)
Hand the completed certificate to your seller. They keep it on file and stop charging tax on qualifying purchases. Virginia does not require you to submit these certificates to the state; the seller accepts them in good faith.
Step 6 — Keep Records for Audits
Retain copies of every certificate you issue and the matching invoices. Virginia mandates that sellers retain properly completed certificates, and clean documentation on both sides is your defense in an audit.
Which Virginia Certificate Do You Need? (Quick Guide)
- Buying inventory to resell? → Form ST-10 (registered Virginia dealer).
- Buying items used directly in manufacturing? → Form ST-11.
- Buying items used directly in ag production? → Form ST-18.
- A government entity? → Form ST-12.
- A nonprofit? → Apply through Nonprofit Online first, then use your certificate.
- Already paid tax you shouldn’t have? → File a refund claim (see below).
Do Virginia Nonprofits Pay Sales Tax? (Not Once They’re Approved)
Virginia’s nonprofit rule catches organizations off guard: federal 501(c)(3) status does not automatically make you exempt from Virginia sales tax. Qualifying nonprofits can be exempt — but only after they apply and receive a Virginia exemption certificate.
The process runs through Nonprofit Online, Virginia Tax’s system for applying for, printing, and renewing sales and use tax exemption certificates. A few points that matter:
- The exemption is effective as of the date on the certificate. You can’t claim a refund for items purchased outside the dates listed on the certificate — so applying promptly matters.
- It covers tangible personal property and taxable services used or consumed by the organization — office supplies, computers, furniture, fundraising items, and items used to pursue the mission.
- Nonprofit exemption certificates carry expiration dates and must be renewed periodically through Nonprofit Online.
- It does not extend to property furnished to a contractor for construction or real-property work, and vehicle purchases are handled separately by the DMV.
If your Virginia nonprofit has been paying sales tax without a certificate on file, you’ve likely been overpaying — though note the date limitation on refunds above.
Where Virginia Businesses Overpay — and How to Recover It
Because Virginia uses a form-per-purpose system and a strict “used directly” manufacturing test, overpayments are common: resale inventory taxed because an ST-10 wasn’t on file, manufacturing consumables taxed because the exemption was never claimed, a regional rate applied incorrectly, or a nonprofit that paid tax before its certificate took effect.
The good news: overpaid Virginia sales or use tax is generally recoverable. A purchaser who paid tax in error can file a refund claim with Virginia Tax, generally within three years of the due date of the return on which the tax was reported. Because the “used directly” standard and the regional rates are technical, a focused review often surfaces overpayments in-house teams miss. For how these refund windows compare across states, see our multi-state sales tax refund guide.
Common Virginia Sales Tax Exemption Mistakes to Avoid
- Using the wrong form. Virginia has a certificate for each exemption — ST-10 won’t work for a manufacturing or agricultural purchase.
- Using ST-10 for business supplies. Items you consume — tools, fixtures, office supplies — are taxable, and no certificate covers them.
- Misjudging “used directly.” Repair tools, delivery-vehicle parts, and office equipment don’t qualify under ST-11.
- Assuming 501(c)(3) = automatic exemption. Virginia nonprofits must apply through Nonprofit Online first.
- Applying late as a nonprofit. You can’t recover tax on purchases made before your certificate’s effective date.
- Ignoring regional rates. Northern Virginia, Hampton Roads, and the Historic Triangle carry higher combined rates.
- Never reviewing past purchases. The three-year refund window doesn’t stay open forever.
Virginia Sales Tax Exemption FAQ
Do I have to apply to the state for a Virginia sales tax exemption?
For most business exemptions, no. You complete the correct certificate (such as Form ST-10 for resale) and give it to your vendor. Nonprofits are the exception — they must apply through Nonprofit Online and receive a certificate first.
What is the Virginia sales tax rate?
The baseline combined rate is 5.3% (4.3% state plus 1% local). Some regions are higher — 6% in Northern Virginia and Hampton Roads, and 7% in the Historic Triangle. The rate depends on the delivery location.
Which form is the Virginia resale certificate?
Form ST-10. It’s used by registered Virginia dealers to buy inventory, property for lease or rental, or packaging materials tax-free. It can’t be used for items your business consumes.
What does “used directly” mean for the manufacturing exemption?
Form ST-11 covers machinery, materials, and supplies used directly in production. Items used around production — repair tools, delivery-vehicle parts, office furniture and supplies — do not qualify.
Does a 501(c)(3) automatically qualify for Virginia sales tax exemption?
No. A Virginia nonprofit must apply through Nonprofit Online and receive an exemption certificate. Federal income-tax exemption alone is not enough, and the exemption is effective only from the certificate’s date.
Can I recover Virginia sales tax I already paid by mistake?
Often, yes. You can file a refund claim with Virginia Tax, generally within three years of the return’s due date. The technical “used directly” and regional-rate rules are common sources of recoverable overpayments.
Conclusion: Claim Every Virginia Exemption You’re Entitled To
A Virginia sales tax exemption comes down to three things: identifying your category, using the correct certificate, and — for manufacturers — applying the “used directly” test correctly. With regional rates reaching 7% and a form-per-purpose system, the difference between claiming and missing an exemption adds up quickly.
The bigger opportunity is usually behind you: purchases where you paid tax you never owed — manufacturing consumables, resale inventory taxed without a certificate on file, or purchases hit with the wrong regional rate. A focused review frequently uncovers overpayments still recoverable within Virginia’s three-year window.
Not sure which purchases qualify — or whether you’ve been overpaying? We offer a free Virginia sales tax exemption and refund review. We’ll confirm your exemption categories, make sure your ST-10 and ST-11 certificates are correct, apply the “used directly” test to your purchases, and flag any overpaid tax you may be able to recover.
👉 Book your free exemption audit today.