Sales and Use Taxes in Vermont

April 13, 2006

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In Vermont a tax is imposed on receipts from:

retail sales of tangible personal property (including leases and rentals)
sales at retail of public utility services, including gas and electricity, but excluding water, telephone, and transportation
charges for producing, fabricating, printing, or imprinting tangible personal property for a consideration for consumers who furnish, directly or indirectly, the materials used
amusement charges
bottle deposits
telecommunications services

Sales and use tax rate. The Vermont sales and use tax rates is generally 6 percent. The tax rate is 9 percent of the gross receipts from meals and occupancies and 10 percent of the gross receipts from alcoholic beverages.

Tax-exempt items. Vermont has many specific items that are exempt from sales tax — for example, certain prescription medications are exempt from Vermont sales tax. You'll want to check and see if you are exempt from the sales tax.

Responsibility for paying sales tax. In Vermont the sales tax is imposed on the receipts from taxable sales. The sales tax is imposed on the purchaser, and the seller is required to collect the sales tax.

Use tax. In Vermont, unless the property is subject to the sales tax, the use tax is imposed on the use, storage, or consumption of taxable property or services in Vermont.

Responsibility for collecting use tax. The use tax is imposed on persons using tangible personal property or taxable services in Vermont that were not subject to the sales tax.

Obtaining tax permits in Vermont. In Vermont persons required to collect the tax and persons purchasing tangible personal property for resale must register with the Vermont Commissioner of Taxes. No permit fee is required.

Leases. In Vermont the taxable sale of tangible personal property includes any transfer of title or possession (or both), including rentals or leases.

The following discussions address additional sales and use tax issues that many small business owners face: