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Vermont sales tax at a glance
Vermont sales tax rates and calculations
The Vermont statewide sales tax rate is 6%. This base rate applies to all taxable sales of tangible personal property and some services.
On top of the 6% statewide rate, many cities and towns in Vermont have enacted a local option tax of 1%. This brings the total tax rate in those jurisdictions up to 7%.
Depending on where a sale occurs in Vermont, the total tax rate the customer pays can be either 6% or 7%. Vermont is a destination-based sales tax state, meaning the total tax rate is determined based on where the purchase is delivered to.
List of local sales tax rates in Vermont
You can look up the full table of sales tax rates for every municipality in Vermont. Here are a few examples of combined state and local rates in Vermont:
Recent tax rate changes in Vermont
There have not been any recent changes to the Vermont statewide or local option sales tax rates. The rates have remained steady since 2018 at 1% and 6%, respectively, for a total of either 6% or 7%, depending on the jurisdiction.
Vermont’s statewide sales tax rate is established by statute. Rate changes require legislative action.
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Vermont sales tax FAQs
How do you calculate Vermont sales tax?
To calculate Vermont sales tax, you multiply the total tax rate by the sales price. The total tax rate includes the 6% statewide rate plus the local option tax (if applicable) for the delivery jurisdiction.
For example, for a $100 sale delivered to Burlington (with its 1% local tax), the tax would be 7%. The math would be: $100 x 7% = $7.
What are the penalties for not paying Vermont sales tax?
The penalties for failing to pay Vermont sales tax depend on the specifics of the noncompliance. But in general:
- A penalty of 5% per month may apply, up to a maximum of 25%
- Interest is charged on unpaid tax
- Criminal fines up to $10,000 may apply for tax evasion
What's the difference between destination-based sales tax states and origin-based sales tax states?
Destination-based sales tax states determine the tax rate to collect based on the destination or delivery location of the purchase. Origin-based sales tax states determine the tax rate based on the origin or source location of the sale.
Is the Vermont sales tax destination-based or origin-based?
Vermont is a destination-based sales tax state. Sellers collect tax based on the delivery address.
Is Vermont a Streamlined Sales Tax state?
Yes, Vermont is a full Streamlined Sales and Use Tax Agreement (SSUTA) member. Registration via the central Streamlined Sales Tax Registration System simplifies the process of registering to collect sales tax across multiple member states.
Vermont sales tax nexus
Here's a look at Vermont's nexus rules:
Vermont sales tax seller permits FAQs
Do I need a Vermont seller's permit if I’m only a wholesaler?
Yes, you likely still need a Vermont seller's permit, even if you only sell wholesale. Wholesale sales in Vermont are generally taxable unless the buyer provides a valid resale certificate. Registering for a seller's permit enables you to properly collect and remit tax or obtain exemption certificates.
Do I need a Vermont seller's permit if I sell in the state only temporarily?
Yes, temporary sales activities, such as trade shows, conventions, and flea markets, generally require a Vermont seller's permit. The tax obligations apply whether the sale is a one-time event or a recurring, temporary activity.
Vermont sales tax exemptions
Some exemptions from Vermont sales tax include:
- Prescription drugs and medical devices
- Most groceries
- Some clothing and shoes in specific circumstances
- Manufacturing equipment
- Farm equipment
VT sales tax exemptions FAQs
Are groceries taxable in Vermont?
No, most grocery food purchases are exempt from Vermont sales tax. However, prepared meals, dietary supplements, and soft drinks are taxable.
Are digital products taxable in Vermont?
Yes, digital products like music, movies, e-books, and SaaS are generally taxable in Vermont.
Are services taxable in Vermont?
Some services are taxable in Vermont, including lodging rentals, amusement and/or recreation services, fabrication labor, and telecommunications services. Professional services are generally not taxable.
Food and beverage tax in Vermont
Vermont has a statewide food and beverage tax (also known as a meals tax). Prepared meals sold in restaurants are subject to a 9% tax. Alcoholic beverages may be subject to Vermont tax depending on the product type and seller.
Remote sellers in Vermont
Remote sellers with no physical presence can still be required to collect sales tax once they establish economic nexus in Vermont. Remote sellers who have at least $100,000 in Vermont sales or at least 200 transactions in a year must collect and remit state sales tax.
Discretionary taxes in Vermont (local sales taxes)
Many cities and towns in Vermont have enacted a local option tax, which functions as an add-on to the statewide 6% sales tax. Local jurisdictions can adopt an additional 1% tax, bringing the total rate to 7% in those areas.
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How to register for sales tax in Vermont
To register for a Vermont seller's permit, visit the Vermont Department of Taxes website and file online via myVTax, or complete form BR-400. You'll need to provide:
- Business identity information
- Ownership and/or officer details
- NAICS industry codes
- Products sold
- Anticipated monthly taxable sales
Once registered, you can charge, collect, report, and remit Vermont sales tax.
Registration requirements for online sellers in Vermont
Online and remote sellers must collect Vermont sales tax if they:
- Earn at least $100,000 in annual Vermont sales
- Conduct at least 200 Vermont sales transactions annually
- Use an online marketplace facilitator that exceeds VT thresholds
Cost of registration for a Vermont sales tax license
It is currently free to obtain a Vermont seller's permit for charging sales tax. No fee is assessed.
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Collecting sales tax in Vermont
If you have employees, offices, or property in Vermont (physical nexus) and are making taxable sales there, you are required to register with the Vermont Department of Taxes and collect sales tax. The same holds true if you meet economic nexus thresholds ($100,000 in annual sales or 200 separate transactions).
Once either of these thresholds is reached, you must:
- Register for a Vermont seller's permit
- Begin collecting Vermont sales tax on taxable sales to buyers in Vermont
- Remit the collected sales tax to the Vermont Department of Taxes
The Department of Taxes offers an online registration system that makes it easy to obtain your seller's permit and begin legally collecting Vermont sales tax.
There are also special rules for attending conventions and trade shows in Vermont, voluntary disclosure agreements, and other scenarios. However, meeting either economic threshold results in a sales tax collection obligation.
Should you collect sales tax on shipping charges in Vermont?
Yes, Vermont considers delivery and shipping charges to be part of the total taxable sales price. So if tax is being collected on the sale of a product, tax should also be collected on the shipping fees associated with that sale.
The only exception would be if the sale itself was exempt from tax, in which case a reasonable shipping charge would also be exempt from Vermont sales tax.
Filing and paying sales taxes in Vermont
All registered sellers making taxable sales must file periodic sales tax returns in Vermont, reporting taxable sales and the amount of sales tax due. Even sellers with no tax due must file $0 returns at the end of each assigned reporting period.
Returns can be submitted on paper or electronically through Vermont's myVTax online portal. Most sellers must file returns electronically. If you file via myVTax, you can also remit tax amounts online.
Sales tax return filing schedule and due dates in Vermont
The Vermont Department of Taxes assigns each seller a filing frequency: monthly, quarterly, or annually, depending on the seller’s anticipated sales volume. Businesses with higher sales volumes typically file more frequently.
Vermont sales tax due dates are generally as follows:
Monthly
Monthly sales tax filers must submit returns and payments by the 25th of the following month unless the 25th falls on a weekend, in which case payment is due on the next business day.
Quarterly
Quarterly filers in Vermont must submit returns and payments by the 25th of the month after the quarter closes. Due dates are April 25, July 25, October 25, and January 25 (unless the 25th falls on a weekend, in which case payment is due on the next business day).
Annually
Annual returns and payments are due January 25th following the completed calendar tax year ending December 31st (unless the 25th falls on a weekend, in which case payment is due on the next business day).
Filing penalties in Vermont
If a Vermont sales tax return is not filed or full payment is not made by the due date, penalties may apply:
- Interest accrues immediately on unpaid tax, typically 6% annually, though amounts vary
- A 5% late payment penalty may apply
- Up to a 25% late filing penalty on the remaining tax due
- $50 minimum penalty for filing returns more than 60 days late
Note that every registered seller must file a $0 return at the end of each assigned reporting period in Vermont, even if no tax was collected.
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VT sales tax audit and appeals process
The Vermont sales tax audit and appeals process involves several steps if a business disputes an audit’s findings.
The process begins with an auditor scheduling and conducting an audit of the business's records and tax returns.
If the audit identifies issues like unremitted taxes, the auditor prepares a report with their findings and assessments. The business then has 60 days to appeal the audit results.
Appeals initially go to the Commissioner of Taxes. If their ruling is disputed, further appeals can be made to the judiciary arm of the state government.
Vermont sales tax audit process
The typical process for a Vermont sales and use tax audit consists of:
- You receive an audit notice from the Department of Taxes
- You schedule the on-site or virtual audit
- The auditor reviews all of the business’s sales records, receipts, and tax returns
- The auditor analyzes documentation and determines any discrepancies
- An audit report is issued to the business with assessments, if applicable
The business then has the option of appealing the audit’s results.
What to expect during an audit?
If your business is selected for a Vermont sales tax audit, prepare for the auditor to request access to:
- Sales and financial records
- Invoices, receipts, and bills of lading
- Resale and exemption certificates
- Tax returns from audited periods
- Accounting system data
- Bank statements and deposit info
- Info on assets bought out-of-state
Appealing the results of an audit
If you disagree with the auditor's findings, Vermont gives you 60 days to file a written appeal with the Commissioner of Taxes. Filing an appeal enables you to present additional documentation, get clarification on ambiguities, and potentially reduce or eliminate assessments.
Getting help with Vermont sales tax
For help with Vermont sales tax questions, filing returns, registration, audits, and appeals, contact:
- Authority Name: Vermont Department of Taxes
- Phone number: 802-828-2551
- Website: https://tax.vermont.gov
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