Virginia - Economy

Economy

While Virginia is an employment-at-will state, its economy has diverse sources of income, including local and federal government, military, farming and business. Virginia has 4.1 million civilian workers, and one-third of the jobs are in the service sector. The unemployment in Virginia in among the lowest in the nation, at 5.6%, as of March 2012. The second fastest job growth town in the nation is Leesburg, as of 2011. The Gross Domestic Product of Virginia was $424 billion in 2010. According to the Bureau of Economic Analysis, Virginia had the most counties in the top 100 wealthiest in the United States based upon median income in 2007. Northern Virginia is the highest-income region in Virginia, having six of the twenty highest-income counties in the United States, including the three highest as of 2011. According to CNN Money Magazine the highest-income town in the nation is Great Falls, as of 2011.

Virginia has the highest concentration of technology workers of any state. Computer chips became the state's highest-grossing export in 2006, surpassing its traditional top exports of coal and tobacco combined. Northern Virginia, once considered the state's dairy capital, now hosts software, communication technology, and consulting companies, particularly in the Dulles Technology Corridor. Northern Virginia's data centers currently carry more than 50% of the nation's internet traffic, and by 2012 Dominion Power expects that 10% of all its electricity in Northern Virginia will be used by data centers. 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 2011.

Virginia companies received the fourth-highest amount of venture capital funding in the first half of 2011 after California, Massachusetts, and New York. In 2009, Forbes Magazine named Virginia the best state in the nation for business for the fourth year in a row, while CNBC named it the top state for business in 2007, 2009, and 2011. Virginia has 20 Fortune 500 companies, ranking the state eighth nationwide.

Virginia has the highest defense spending of any state per capita, providing the Commonwealth with around 900,000 jobs, and 10% of all U.S. federal procurement money is spent in Virginia. Virginia has over 800,000 veterans, more than any other state, and is second to California in total Department of Defense employees. Many Virginians work for federal agencies in Northern Virginia, which include the Central Intelligence Agency and the Department of Defense, as well as the National Science Foundation, the United States Geological Survey and the United States Patent and Trademark Office. Many others work for government contractors, including defense and security firms, which hold more than 15,000 federal contracts. The Hampton Roads area has the largest concentration of military bases and facilities of any metropolitan area in the world. The largest of the bases is Naval Station Norfolk.

Agriculture occupies 24% of the land in Virginia. As of 2007, about 357,000 Virginian jobs were in agriculture, with over 47,000 farms, averaging 171 acres (0.27 sq mi; 0.69 km2), in a total farmland area of 8.1 million acres (12,656 sq mi; 32,780 km2). Though agriculture has declined significantly since 1960 when there were twice as many farms, it remains the largest single industry in Virginia. Tomatoes surpassed soy as the most profitable crop in Virginia in 2006, with peanuts and hay as other agricultural products. Although it is no longer the primary crop, Virginia is still the fifth-largest producer of tobacco nationwide. Eastern oyster harvests are an important part of the Chesapeake Bay economy, but declining oyster populations from disease, pollution, and overfishing have diminished catches. Wineries and vineyards in the Northern Neck and along the Blue Ridge Mountains also have begun to generate income and attract tourists.

Virginia collects personal income tax in five income brackets, ranging from 3.0% to 5.75%. The state sales and use tax rate is 4%, while the tax rate on food is 1.5%. There is an additional 1% local tax, for a total of a 5% combined sales tax on most Virginia purchases and 2.5% on most food. Virginia's property tax is set and collected at the local government level and varies throughout the Commonwealth. Real estate is also taxed at the local level based on 100% of fair market value. Tangible personal property also is taxed at the local level and is based on a percentage or percentages of original cost.