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Master Vermont's 2023 sales tax landscape with our guide, covering compliance, rates, and business regulations
Sales tax at a glance
Vermont sales tax rates & calculations in 2023
The Vermont statewide sales tax rate in 2023 is 6%. This base rate applies to all taxable sales of tangible personal property and some services.
On top of the 6% statewide rate, over 190 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 the ship-to/delivery location of the purchase.
List of local sales tax rates in Vermont
You can look up the full table of sales tax rates for every city and county in Vermont. Here are a few examples of combine 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 at 6-7% depending on the jurisdiction since 2018.
However, Vermont law does stipulate that the sales tax rate shall be adjusted annually by a calculation based on the prior year’s revenue numbers. So while no significant rate changes have occurred lately, minor fractional adjustments are possible each year.
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 any additional local option tax for the delivery jurisdiction.
For example, for a $100 sale delivered to Burlington (with its 1% local tax), the math would be:
Tax = (Sales Price x Total Tax Rate) = ($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 non-compliance. But in general:
- A penalty of 5% per month may apply, up to a maximum of 25%
- Interest is also charged on unpaid tax
- Criminal fines up to $10,000 may apply for tax evasion
What's the difference between destination-based and origin-based sales tax states?
Destination-based sales tax states determine the tax rate to collect based on the destination/delivery location of the purchase. Origin-based sales tax states determine the tax rate based on the origin/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 ship-to/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 registering to collect sales tax across multiple member states.
Sales tax nexus table in Vermont
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 collect and remit tax or obtain exemption certificates properly.
Do I need a Vermont seller's permit if I only sell temporarily in the state?
Yes, even temporary selling activities like trade shows, conventions, flea markets, etc, generally still require a Vermont seller's permit. The tax obligations apply whether selling is a one-time event or a recurring temporary activity.
Exemptions from sales tax in Vermont
Some exemptions from Vermont sales tax include:
- Prescription drugs & medical devices
- Most groceries
- Some clothes & shoes
- Manufacturing equipment
- Farm equipment
FAQs
Are groceries taxable in Vermont?
No, most grocery food purchases are exempt from Vermont sales tax. However, prepared meals, candy, dietary supplements, and soft drinks are taxable.
Are digital products taxable in Vermont?
Yes, digital products like music, movies, ebooks, and software downloads are generally taxable in Vermont.
Is software-as-a-service (SaaS) taxable in Vermont?
Yes, as of new legislation passed in 2024, SaaS is taxable in Vermont.
Are services taxable in Vermont?
Some services are taxable in Vermont, including lodging rentals, amusement/recreation services, fabrication labor, and telecommunications services. Professional services are generally not taxable.
Excise taxes in Vermont (alcohol, tobacco, gasoline, fuel, marijuana)
Vermont has excise taxes on:
- Alcoholic beverages
- Tobacco products
- Marijuana
- Gasoline & diesel fuel.
The alcohol excise tax varies by beverage product, ranging from $0.55 per gallon (beer) up to $11.80 per gallon (spirits).
Tobacco taxes also vary starting at around $3.08 per pack of cigarettes, $4.96 per oz of loose tobacco, 50% of the wholesale price for vapor products.
The marijuana excise tax is fixed at 16% of the retail price. Fuel taxes are currently $0.3 per gallon of gasoline and $0.331 per gallon of diesel.
Food and beverage tax in Vermont
Vermont does not have any general statewide food and beverage tax. However, prepared meals sold in restaurants are subject to the regular 6% statewide sales tax plus any applicable local option taxes.
Remote sellers in Vermont
Remote sellers with no physical presence can still be required to collect Vermont sales tax once certain economic thresholds are met. Remote sellers with over $100,000 in annual Vermont sales or over 200 transactions must collect and remit state sales tax.
Prepaid sales tax rates for fuel products in Vermont
Vermont does not appear to have any variation in fuel tax rates for prepaid sales. The taxes per gallon noted above apply uniformly whether paying at the pump or prepaying.
Discretionary taxes in Vermont (local sales taxes)
Over 190 cities and towns in Vermont have enacted a local option tax, which functions as a local sales tax add-on to the statewide 6% rate. Local jurisdictions can adopt an additional tax of up to 1%, bringing the total rate up to 7% in those areas..
Collecting sales tax in Vermont
Let’s look at the steps for out-of-state sellers to collect Vermont sales tax now.
How to collect sales tax in Vermont if you are not based in Vermont (Out-of-State)
Even if you do not have employees, offices, or property located in Vermont, you may still be required to register with the Vermont Department of Taxes and collect sales tax if you meet certain economic thresholds.
You are considered "engaged in business" in Vermont if:
- You have over $100,000 in gross annual sales delivered to Vermont, OR
- You have over 200 separate sales transactions delivered to Vermont customers
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 Department of Taxes
The Department offers an online registration system to easily 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 more 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/shipping charges part of the total taxable sales price. So if tax is being collected on a product sale, tax should also be collected on the shipping fees associated with that sale.
The only exception would be if the product 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 in Vermont must file periodic sales tax returns, reporting taxable sales and the amount of sales tax due. Even sellers with no tax due must file $0 returns at the completion of each assigned reporting period.
Returns can be submitted manually on paper or electronically through Vermont's myVTax online portal. Filing in myVTax also enables online payment of taxes due. Most sellers must file returns electronically.
Sales tax return filing schedule and due dates in Vermont
The Vermont Department of Taxes assigns each seller a filing frequency - monthly, quarterly, or annual. This schedule is set based on your anticipated sales volume. Higher sales equals more frequent filing.
Here are the 2023 Vermont sales tax due dates by filing period:
Monthly:
Monthly sales tax filers must submit returns and payments by the 25th of the following month (23rd for February due to it being shorter). For example, January sales tax is due February 23.
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.
Annual:
Annual returns and payments are due January 25th following the completed calendar tax year ending December 31st.
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 but varies
- A 5% late payment penalty may apply
- Up to a 25% late filing penalty on remaining tax due
- $50 minimum penalty for filing returns more than 60 days late
When are returns due in Vermont?
Returns and payment are due on the 25th of the following month after the close of the assigned reporting period, or the next business day if the 25th falls on a weekend or holiday.
So for a monthly return spanning March 1 - March 31, the due date would be April 25. And for a 2022 annual tax return the due date is January 25, 2023.
FAQs
What are the Vermont sales tax due dates?
The Vermont sales tax due dates vary based on assigned filing frequency. See monthly, quarterly, and annual due date tables above.
I didn’t collect any Vermont sales tax this period. Do I still need to file a return?
Yes, every registered seller must file a $0 return at the end of each assigned reporting period in Vermont, even if no tax was collected.
Audit & appeals process
The Vermont sales tax audit & appeals process involves several steps if a business is selected for audit and disputes the audit findings. It 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 still 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:
- Receiving an audit notice from the Department of Taxes
- Scheduling the on-site or virtual audit
- The auditor reviews all sales records, receipts, and tax returns from the business
- Auditor analyzing documentation and determining any discrepancies
- An audit report issued to the business with assessments if applicable
- Businesses can dispute the audit findings
What to expect during the 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, 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
After the audit – Appealing the results
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 through the appeals process.
How to register for sales tax in Vermont?
To register for a Vermont seller's permit, visit the Department of Taxes website and file online via myVTax, or complete form BR-400. You'll need to provide:
- Business identity information
- Ownership/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:
- Exceed $100,000 in annual Vermont sales
- Conduct over 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.
More Information & Contacts
For help with Vermont sales tax questions, filing returns, registration, audits, appeals, etc. contact:
- Authority Name: Vermont Department of Taxes
- Phone number: 802-828-2551
- Website: https://tax.vermont.gov
There you have it—a comprehensive guide on Vermont's sales tax regime. Need help filing taxes for your ecommerce store? Get a demo with Numeral now.
