Virginia Economy

According to the 2004 U.S. Bureau of Economic Analysis report, Virginia’s gross state product was $326.6 billion. The per capita personal income was $35,477 in 2004.

In 2006 Forbes Magazine voted Virginia as having the best climate for business in the United States citing economic growth, business costs/incentives and quality of life. In 2007, Forbes.com again ranked Virginia No. 1 for business. CNBC ranked Virginia as the top state for business in 2007 as well.

Virginia's economy is well balanced with diverse sources of income. From the Hampton Roads area to Richmond and down to Lee County in the southwest includes military installations, cattle, tobacco and peanut farming in Southside Virginia. Soy recently surpassed tobacco as the most profitable crop in Virginia. Wineries and vineyards in the Northern Neck and along the Blue Ridge Mountains also have become increasingly popular. Northern Virginia (once considered the state's dairy capital) hosts software, communications, consulting, defense contracting, diplomats, and considerable components of the professional government sector. As of the 2000 census, Virginia had the highest number of counties and independent cities (15) in the top 100 wealthiest jurisdictions in the United States based upon median income, in addition, Virginia tied with Colorado as having the most counties (10) in the top 100 based on per capita income. Loudoun and Fairfax counties in Northern Virginia have the highest and second highest median household income, respectively, of all counties in the United States as of 2006.

Richmond is one of 12 cities in the country having a Federal Reserve bank. It, along with the New York and San Francisco Federal Reserve banks are the only ones that cover a non-state (Washington, D.C.).

There are seven Fortune 500 companies headquartered in Northern Virginia, and nine in the Richmond area (most of which are within the city itself.) Only five metro areas in the country have more Fortune 500 companies than the Richmond area.

Virginia, arguably the wealthiest southern state before the Civil War, recovered from the Civil War and the Great Depression much faster than the rest of the South. Today, Virginia is still one of the wealthiest states in the South.

Well-known government agencies headquartered in the state include the Central Intelligence Agency and Department of Defense, as well as the National Science Foundation, the United States Geological Survey and the United States Patent and Trademark Office. Northern Virginia is a bastion of federal spending[6], particularly with regards to defense contracting. The Hampton Roads area has the largest concentration of military bases and facilities of any metropolitan area in the world, the largest of these being Naval Station Norfolk. The Hampton Roads area also is home to Air Force and NASA facilities. In addition to the Pentagon, US military bases at Arlington, Fort Belvoir, Hampton Roads, and Quantico make Virginia the home of more active duty military personnel than any other state. Ten ships have been christened USS Virginia in honor of the state and its role in the US military.

According to the American Electronics Association, Virginia has the highest concentration of technology workers of any state.[7] Computer chips became the state's highest-grossing export in 2006, surpassing its traditional top exports of coal and cigarettes, combined.[8] The Dulles Technology Corridor centered on the border of Fairfax County and Loudoun County near Dulles International Airport has a high concentration of Internet, communication technology and software engineering firms.

Hampton Roads is currently the third-largest center of the emerging modeling and simulation industry in the U.S. behind Orlando and Huntsville, Alabama[9].

The state's biotechnology industry is not centralized, but growing[10], highlighted by the building of the Virginia BioTechnology Research Park (located in Richmond) biotech incubator and the opening of the Howard Hughes Medical Institute's Janelia Farm in Loudoun County.

Virginia collects personal income tax in five income brackets, ranging from 3.0% to 5.75%. The sales and use tax rate is 5%. The tax rate on food is 1.5%. There is an additional 1% local tax, for a total of a 6% combined sales tax on most Virginia purchases and a combined tax rate of 2.5% on food. Virginia's property tax is set and collected at the local government level and varies throughout the commonwealth. Real estate is taxed at the local level based on 100% of fair market value. Effective true tax rates on real estate vary and are set by locality. Tangible personal property also is taxed at the local level and is based on a percentage or percentages of original cost. Tangible personal property includes, but is not limited to, machinery and equipment, furniture, fixtures, and trucks and automobiles. The Virginia General Assembly exempted intangible personal property from taxation in 1984 by making the tax rate zero. Virginia does not collect inheritance taxes; however, its estate tax is decoupled from the federal estate tax laws, and therefore the Commonwealth imposes its own estate tax.

The Pentagon, headquarters of the US Department of Defense in Arlington.