NSNexus by State

Virginia Digital Products Sales Tax Guide — Digital Tax 2026

Updated

Reviewed by Nexus by State research team using official state tax sources. Last reviewed .

Guide content last reviewed: 2026-07-03

Use this Virginia digital products sales tax guide to answer the “Virginia digital tax” question without treating every download, stream, SaaS subscription, or online course as the same product. The economic nexus trigger still uses the $100,000 or 200 transactions sales-tax threshold before registration and filing duties begin.

Are digital products taxable in Virginia?

Generally no. As of July 3, 2026, Virginia does not charge sales tax on digital products delivered electronically — downloaded or streamed music, movies, eBooks, digital magazines, or digital photos — or on software you download or access remotely without receiving a physical disk. Virginia sales tax reaches tangible personal property, and an electronic-only transmission with no tangible medium is treated as a nontaxable service. Watch one date: bills in the 2026 General Assembly (HB 900 and SB 730) would extend Virginia sales tax to digital products and software services effective January 1, 2027 — neither is enacted yet.

Taxable digital categories

  • Prewritten ("canned") software delivered on a tangible medium — a disk, USB drive, or software preloaded on hardware — taxable as tangible personal property
  • Digital products or software bundled with taxable tangible personal property in a single, non-itemized charge
  • Physical items sold with a digital product, such as a printed manual, a disc, or other tangible media shipped to the buyer

Not taxable / special treatment

  • Digital audio works — downloaded or streamed music and audiobooks
  • Digital audio-visual works — downloaded or streamed movies, TV, and video
  • eBooks, digital magazines and newspapers, and digital photographs delivered electronically
  • Prewritten (canned) software delivered electronically with no tangible medium — presumed exempt unless there is evidence of physical delivery
  • Custom computer programs — exempt by statute regardless of how they are delivered
  • SaaS and cloud-based software the customer accesses remotely without a download or disk
  • Separately stated internet access and related electronic communication services

Virginia’s retail sales and use tax applies to tangible personal property and a short list of enumerated taxable services — it has no broad “specified digital products” category. Under Virginia’s services regulation, the object of a transaction that transmits information or content through electronic means is deemed to be a service, so a purely electronic delivery with no disk, drive, or other tangible item generally falls outside the sales tax. That is the opposite of neighboring Kentucky, Tennessee, and North Carolina, which tax digital goods.

Software is the detail that trips sellers up. Prewritten (“canned”) software delivered on a tangible medium — a disk, USB drive, or preloaded hardware — is taxable tangible personal property. The same prewritten software delivered electronically, with no tangible medium, is presumed exempt. Custom programs written for a particular customer are exempt by statute regardless of delivery. Software the customer accesses remotely (SaaS/cloud) is not taxable either — confirm your specific product against the Virginia SaaS guide and Virginia Tax.

Streaming and downloads: because streamed or downloaded music, video, and eBooks are delivered electronically with no tangible personal property, they are generally not subject to Virginia sales tax today. If a digital product is bundled with a taxable tangible item for one price, though, the whole charge can become taxable — itemize the digital and tangible parts separately.

What may change in 2027: Virginia has repeatedly considered taxing digital goods. A 2024–2026 budget proposal to tax “digital personal property” was dropped from the final enacted budget, but the 2026 General Assembly is considering HB 900 and SB 730, which would extend the sales tax to digital products and software services with a proposed effective date of January 1, 2027. As of this review neither is enacted, so the current answer stands — but this is a rule to re-check before 2027 invoicing.

Marketplaces and nexus: since digital-only products are generally not taxable in Virginia, there is usually no Virginia sales tax for an app store or marketplace to collect on a digital-only sale. Virginia’s economic-nexus rule ($100,000 in sales or 200 transactions) and marketplace-facilitator collection still apply to your taxable tangible-goods sales into the state.

Virginia digital-tax rules last verified: 2026-07-03. Sources: Virginia Tax — Retail Sales and Use Tax; 23VAC10-210-4040 — Services (computer software; electronic transmittal deemed a service); Va. Code § 58.1-609.5 — Service exemptions (services with no exchange of tangible personal property; custom programs); Va. Code § 58.1-602 — Definitions (custom program, tangible personal property); Virginia HB 900 (2026 Session) — proposed sales tax on digital products and services (not enacted; effective Jan 1, 2027 if passed). date_retrieved: 2026-07-03. State rules change — confirm category-by-category with the Virginia state tax agency before invoicing.

Sales tax on digital products in Virginia

“Digital products” covers eBooks, audiobooks, video downloads, online courses, streaming subscriptions, digital artwork, stock photos, music, and similar non-physical delivered goods. Whether Virginia taxes them depends on how the state classifies the product — “specified digital products”, “electronic transfer of canned software”, or a service. Rules vary more than for physical goods.

If taxable in Virginia, the product is subject to the 5.30% state rate plus any applicable local rate based on the buyer’s address.

Which digital products does Virginia tax?

Most states sort digital goods using the Streamlined Sales Tax definition of “specified digital products”, which splits them into three subcategories a state can tax or exempt independently:

  • Digital audio-visual works — downloaded or streamed movies, shows, and recorded events. Streaming video subscriptions fall here.
  • Digital audio works — downloaded or streamed music, podcasts, audiobooks, and ringtones. Streaming music subscriptions fall here.
  • Digital books — eBooks. Newspapers, periodicals, blogs, and databases are excluded from the “book” definition and follow their own rules.

Because a state may tax one subcategory and exempt another, “are digital products taxable” rarely has a single yes/no answer. Where Virginia taxes a subcategory, the charge is subject to the 5.30% state rate plus any local rate at the buyer’s address. Software subscriptions (SaaS and electronically delivered “canned” software) sit outside this framework and follow Virginia’s separate software-taxability rule — see the SaaS guide for that determination.

Framework source: Streamlined Sales Tax Governing Board — “Specified Digital Products” definition (SSUTA §332). date_retrieved: 2026-06-04. State-by-state taxability still varies; verify each subcategory with the Virginia Department of Revenue before invoicing.

Key distinctions

  • Specified digital products. Many states (adopting Streamlined Sales Tax definitions) tax SDPs — digital audio/video/books.
  • Online courses and education. Most states treat live-instruction courses as non-taxable services but treat pre-recorded course access as taxable digital products. Watch for this split if you sell both.
  • Subscriptions. Bundled subscription boxes with mixed digital + physical content are often taxed as a single taxable bundle — you can't allocate across taxable and non-taxable components unless the invoice separately states them.
  • B2B vs B2C. Some states exempt B2B digital products when bought for resale or when the buyer has a direct-pay permit. Keep certificates on file.

Common digital-product mistakes in Virginia

  • Treating all digital products the same across states — eBook tax treatment differs from SaaS, which differs from streaming.
  • Bundling digital + physical goods without a line-item breakdown. Most states tax the full bundle at the physical rate if not itemized.
  • Applying origin-based sourcing (your state's rate) when most states source digital products to the buyer's billing or shipping address.

Virginia nexus note

Economic nexus in Virginia triggers when remote sellers exceed $100,000 in gross sales OR 200 or more separate transactions into Virginia in the current or preceding calendar year — whichever is met first.

What to do next

Read the full Virginia overview for thresholds, filing frequency, marketplace facilitator rules, and registration links. Use the nexus calculator to check whether you have crossed the threshold. For background on the post-Wayfair economic nexus framework, see the pillar guide.

Digital Products sales tax in other states

Compare Virginia's digital products rules with nearby and similar states' digital products sales tax guides:

Frequently asked questions

Are digital products taxable in Virginia in 2026?
Generally no. Virginia does not charge sales tax on digital products delivered electronically — downloaded or streamed music, movies, eBooks, digital magazines, and digital photographs — because its sales tax reaches tangible personal property and an electronic-only transmission is treated as a nontaxable service. Watch one date: 2026 General Assembly bills (HB 900 and SB 730) would extend the tax to digital products and software services effective January 1, 2027, but neither is enacted yet.
Does Virginia tax digital downloads (eBooks, music, video)?
No. Downloaded or streamed music, movies, video, and eBooks delivered electronically with no tangible personal property are generally not subject to Virginia sales tax. The answer changes only if the digital product is bundled with a taxable tangible item for one price — then itemize the digital and tangible portions separately.
Is SaaS taxable in Virginia?
Generally no. Software the customer accesses remotely (SaaS/cloud) with no download or disk is not subject to Virginia sales tax, because no tangible personal property is transferred. Check the Virginia SaaS guide and confirm your product with Virginia Tax before invoicing.
Is downloaded software taxable in Virginia?
It depends on how it is delivered. Prewritten ("canned") software delivered on a tangible medium — a disk, USB drive, or preloaded hardware — is taxable tangible personal property. The same prewritten software delivered electronically with no tangible medium is presumed exempt, and custom programs are exempt by statute regardless of delivery.
What Virginia sales tax rate applies to digital products?
Because digital products delivered electronically are generally not taxable in Virginia, no sales tax rate applies to a digital-only sale today. If you sell prewritten software on a physical disk or another taxable tangible item, Virginia's minimum combined rate of 5.30% (4.3% state plus 1% local, higher in some regions) applies to that tangible sale.
Will Virginia start taxing digital products and SaaS?
Possibly in 2027. A 2024–2026 budget proposal to tax "digital personal property" was dropped from the final enacted budget, but the 2026 General Assembly is considering HB 900 and SB 730, which would extend Virginia sales tax to digital products and software services with a proposed effective date of January 1, 2027. As of this review neither bill is enacted, so digital products remain untaxed — re-check before 2027 invoicing.

Sources

date_retrieved: 2026-05-27