Economy of Virginia facts for kids

Quick facts for kids
Economy of Virginia

Seal of Virginia
Statistics
GDP	$712.9 billion
GDP rank	13th
GDP per capita	$81,794
Population below poverty line	▼ 9.49%
Gini coefficient	0.456
Human Development Index	0.930
Labor force	4,518,998
Unemployment	3.2%
Public finances
Revenues	$47.7 billion
Expenses	▼ $50.3 billion

The economy of Virginia is very strong and has many different ways of making money. It's like a well-balanced team! From the Hampton Roads area to Richmond and down to Lee County in the southwest, you'll find military bases, farms, and big businesses.

Virginia grows lots of crops like tomatoes, tobacco, peanuts, and hay. Tomatoes are now the most profitable crop! In the Northern Neck and along the Blue Ridge Mountains, there are even popular wineries and vineyards.

Northern Virginia is a major hub for technology. It has many companies that work with software, communications, and defense. This area is also home to many government jobs. Virginia is one of the wealthiest states in the U.S. In fact, Loudoun and Fairfax counties have some of the highest household incomes in the entire country!

With a total value of $712.9 billion, Virginia's economy is the 13th largest among all 50 U.S. states. This means Virginia's economy is bigger than some whole countries, like Belgium or Sweden! Virginia is also one of the richest states, with a high income per person.

Virginia's Economic Strengths

Virginia's economy has grown a lot over the years. In 2007, the state's total economic output was $383 billion. This shows how much the state produces in goods and services.

Many groups have recognized Virginia for its strong economy. For example, Forbes magazine and CNBC have called Virginia one of the best states for business. They look at things like economic growth, business costs, and quality of life.

Richmond, Virginia, is special because it has one of the 12 Federal Reserve banks in the U.S. These banks help manage the country's money supply.

Virginia is also home to many big companies. There are 17 Fortune 500 companies in Virginia. These are some of the largest companies in the United States. This makes Virginia rank tenth nationwide for having so many major businesses.

Virginia counties and cities by median family income (2010)

Virginia counties and cities by per capita income (2010)

Arms and Aerospace: A Key Industry

Virginia has a very strong industry that makes weapons and defense equipment. It has a long history of creating advanced military technology. The state is in a great spot on the East Coast. It also has good transportation and a skilled workforce. All these things make it a perfect place for defense companies.

One big reason for this industry is Virginia's closeness to Washington, D.C. This is where the U.S. military and defense operations are based. Many defense companies have their main offices in Northern Virginia. This helps them be near important decision-makers and the Pentagon.

Virginia also has several military bases. One of the most famous is Naval Station Norfolk. It is the largest naval base in the world! The state also has research centers like the Naval Surface Warfare Center Dahlgren Division.

These military bases and research centers have helped Virginia become a hub for defense companies. These companies work closely with the military to develop new technologies. Some of the top defense companies here include Boeing, Northrop Grumman, General Dynamics, and RTX Corporation.

The James Webb Space Telescope is made by Northrop Grumman.

M1 Abrams Tanks are made by General Dynamics.

Virginia's arms and defense industry helps the state's economy a lot. It creates thousands of high-paying jobs. It also brings billions of dollars into the state each year. In fact, this industry adds over $36 billion to Virginia's economy annually. It supports more than 300,000 jobs!

Virginia's strong connection to the military, its skilled workers, and its helpful business environment make it a top place for defense companies. As the world changes, Virginia will likely stay a leader in military innovation for many years.

Technology: A Growing Sector

Virginia is a big player in the technology world. It has the highest number of technology workers compared to other states. In 2006, computer chips became Virginia's top export. This was a big change, as they surpassed traditional exports like coal and tobacco.

The Dulles Technology Corridor is a major tech area. It's located near Dulles International Airport. This area has many companies focused on the Internet, communication, and software.

Virginia's biotechnology industry is also growing. This field uses living systems and organisms to create new products. An example is the Virginia BioTechnology Research Park in Richmond.

Nanotechnology is another exciting area in Virginia. This involves working with tiny materials at the atomic level. Researchers in Hampton Roads are doing a lot of work in this field. They believe the region has an advantage in making nanotechnology products. Much of this research is led by NASA's Langley Research Center.

Arlington County skyline

In 2017, Amazon announced it would build a second headquarters in North America. Many cities wanted it! In 2018, Amazon chose two locations, and one was in Arlington, Virginia. Amazon opened its second headquarters in Arlington in 2023.

This was a big deal for Virginia. Arlington was a top choice because it's close to Washington, D.C. It also has good transportation. Amazon plans to invest $2.5 billion and create over 25,000 high-paying jobs. They want to hire local talent and work with local universities.

Finance and Banking: Managing Money

Virginia is home to one of the largest banking and finance industries in the U.S. Its location on the East Coast and near the nation's capital makes it a great place for financial companies. Also, Virginia has a business-friendly environment and many educated workers. This attracts many financial companies to the state.

Two very important financial companies in Virginia are Freddie Mac and Capital One. Freddie Mac helps make sure there's enough money for people to get home loans. It's headquartered in McLean, Virginia.

Capital One is a huge company that offers credit cards, loans, and banking services. It was started in 1988 and is also based in McLean, Virginia. It has become one of the biggest credit card companies in the U.S.

Capital One World Headquarters in Tysons, Virginia

Many other financial institutions are in Virginia too. Some of them include:

• Virginia National Bank: This bank in Charlottesville helps people and businesses with their banking needs.
• TowneBank: Based in Virginia Beach, this community bank offers many financial services.
• Genworth Financial: This company in Richmond provides mortgage insurance and other financial products.

Virginia's banking and finance industry is a big part of the state's economy. With major companies like Freddie Mac and Capital One, Virginia continues to be a leader in this important field.

Virginia's Biggest Companies

Here are the 20 largest companies based in Virginia as of 2022. These companies bring in a lot of money and create many jobs for people in the state.

How Virginia Collects Taxes

Virginia collects different types of taxes to help pay for public services like schools and roads.

• Income Tax: People pay a tax on the money they earn. The rate ranges from 3.0% to 5.75%.
• Sales Tax: When you buy most things in Virginia, there's a 4% sales tax. There's also an extra 1% local tax. So, most purchases have a total of 5% sales tax. For food, the state tax is 1.5%, making the total food tax 2.5%.
• Property Tax: This tax is collected by local governments, like counties and cities. It's based on the value of homes and other real estate. The tax rate can be different depending on where you live. Local governments also tax personal items like cars and machinery.

Virginia does not collect inheritance taxes. This means that when someone passes away, their heirs don't pay a state tax on what they inherit.