Taxes in Norfolk
Virginia levies a real, graduated income tax that is structurally distinct from every no-income-tax and flat-rate state covered elsewhere in this project: 2% on the first $3,000, 3% on $3,001-$5,000, 5% on $5,001-$17,000, and 5.75% on everything above $17,000 -- functioning as a near-flat 5.75% rate for most working filers since nearly all wage income clears $17,000 -- plus a new 7% top bracket on taxable income above $600,000 starting tax year 2026, alongside a modest 6% Norfolk combined sales tax and a genuinely significant, currently expanding military-retirement-pay tax subtraction.
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Learn moreVirginia's Real, Graduated (Effectively Near-Flat) Income Tax -- Verified Independently
Virginia's income tax brackets have been unchanged for decades: 2% on the first $3,000 of taxable income, 3% on $3,001-$5,000, 5% on $5,001-$17,000, and 5.75% on everything above $17,000, per the Tax Foundation and AARP's state tax guide, independently verified this session. Because nearly all working income clears $17,000, this functions as a near-flat 5.75% rate for most earners in practice -- distinct from a true single-bracket flat-rate state and very different from the no-income-tax states covered elsewhere in this project. New for tax years beginning on or after January 1, 2026: a 7% top bracket applies specifically to Virginia taxable income above $600,000 -- a real, current, and newly disclosed change for very high earners.
Norfolk's Combined Sales Tax: A Modest 6%
Norfolk's minimum combined 2026 sales tax rate is 6%, made up of Virginia's 4.3% state rate, a 1.0% Norfolk local rate, and a 0.7% regional (Hampton Roads) special tax, per Avalara and SalesTaxHandbook. This is a genuinely modest combined rate relative to many other metros covered elsewhere in this project.
Social Security Is Fully Exempt; a Real Age Deduction Also Applies
Virginia does not tax Social Security income at all. Separately, filers 65 or older (born after January 1, 1939) can deduct $12,000 from Virginia taxable income, phased out dollar-for-dollar once federal adjusted gross income exceeds $50,000 (single) or $75,000 (married joint) -- fully phased out at $62,000 single / $99,000 joint. Combined with the standard deduction, a qualifying single 65+ filer under the phaseout threshold can shield up to $20,750 from Virginia state income tax. See the retiring topic page in the companion file for the fuller retirement-income picture.
A Real, Currently Expanding Military Retirement Pay Subtraction
Virginia removed the cap on its military retirement pay subtraction starting tax year 2026 -- previously a graduated cap that reached $40,000 for the 2025-2026 season, up from $10,000 (2022-2023), $20,000 (2023-2024), and $30,000 (2024-2025). Starting in 2026, military retirees can subtract their FULL military retirement pay from Virginia taxable income, with no age requirement (TSP/similar retirement-account distributions don't qualify). Given Naval Station Norfolk's scale and the large regional population of retired Navy personnel, this is a real, current, and directly relevant tax benefit for a meaningful share of Norfolk-area residents -- not a generic footnote.
No State Estate or Inheritance Tax
Virginia does not levy a state estate tax or inheritance tax -- Virginia residents with sufficiently large estates may still owe the federal estate tax. This detail should be confirmed against current guidance for anyone making estate-planning decisions on this basis.
Key takeaways
- Virginia's income tax runs 2%/3%/5%/5.75% across brackets topping out at $17,000 -- effectively a near-flat 5.75% rate for most working filers -- plus a new 7% top bracket on taxable income above $600,000 starting tax year 2026.
- Norfolk's combined sales tax rate is a modest 6% (4.3% state + 1.0% local + 0.7% regional).
- Social Security is fully exempt from Virginia state tax; a real $12,000 age deduction (65+) also applies, phased out above $50,000 (single)/$75,000 (joint) federal AGI -- combined with the standard deduction it can shield up to $20,750.
- Virginia removed the cap on its military retirement pay subtraction starting tax year 2026 -- retirees can now subtract their FULL military retirement pay, up from a $40,000 cap -- a real, current, directly relevant benefit given Naval Station Norfolk's scale.
- Virginia levies no state estate or inheritance tax, though the federal estate tax can still apply to sufficiently large estates.
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