Quick Highlights on Vermont Sales Tax
| Detail | Value |
|---|---|
| State Sales Tax Rate Range | 6–7% |
| Base State Sales Tax Rate | 6% |
| Local Rate Range | 0–1% |
| Economic Nexus Sales Threshold | $100,000 |
| Transactional Threshold | 200 transactions (OR with sales threshold) |
| Reference Period | Preceding 4 calendar Quarters |
| Registration Deadline | Next transaction after threshold is crossed |
| Revenue Authority | Vermont Department of Taxes |
| Online Filing Portal | myVTax |
As a business, do I need to collect sales tax in Vermont?
Businesses are required to collect sales tax in Vermont if they have a sales tax nexus in the state. This includes having a physical presence or reaching a specific sales level, which establishes an economic nexus. This is why understanding Vermont state sales tax obligations is crucial for compliance.
Do I have a physical nexus in Vermont?
A physical nexus in the state of Vermont is established if your business has a physical presence in the state, like an office, warehouse, or store. Even temporary physical presence, like participating in trade shows or craft fairs, can create a nexus.
In Vermont, physical nexus is triggered by employees or contractors in any role — including back-office, administrative, and support functions, not just customer-facing roles.
How do I know if I have an economic nexus in Vermont?
An economic nexus in Vermont is determined by your sales volume. If your enterprise meets the threshold, you must register for a Vermont sales tax permit, collect tax on sales shipped to Vermont, and remit that tax to Vermont Department of Taxes.
In Vermont, economic nexus is established if your sales in the state exceed $100,000 OR the number of transactions exceeds 200, based on Preceding 4 calendar Quarters.
Marketplace sales (e.g., Amazon, eBay) are included when calculating whether you've exceeded the Vermont economic nexus threshold.
Sales made for resale are included in the nexus threshold calculation for Vermont.
Non-taxable sales are included in the nexus threshold calculation for Vermont.
Once you cross the threshold, you must register by Next transaction after threshold is crossed.
Which goods are taxable in Vermont?
In Vermont, sales tax applies to:
- Retail sales of tangible personal property
- Prewritten computer software (including SaaS, since July 2024)
- Specified digital products
- Certain enumerated services including telecommunications, amusement, and fabrication
- Prepared food and restaurant meals
- Lodging and hotel accommodations (9% meals and rooms tax)
Most services are not taxable in Vermont unless specifically enumerated.
What items are exempt from sales tax in Vermont?
Vermont exempts the following from sales tax:
- Clothing (Vermont does not tax clothing)
- Food and food ingredients for home consumption (unprepared groceries)
- Prescription drugs and medical supplies
- Agricultural inputs and equipment
- Manufacturing equipment and fuel
- Sales to government entities and qualifying nonprofits
Is SaaS taxable in Vermont?
SaaS is fully taxable in Vermont. All cloud software subscriptions delivered to customers in Vermont are subject to sales tax.
How can a business get a sales tax permit in Vermont?
To obtain a sales tax permit in Vermont, businesses need to register with the Vermont Department of Taxes. Registration can be completed online through the myVTax.
You will need to provide detailed information about your business, including business type, ownership details, and the nature of your business activities.
When should a business file sales tax in Vermont?
Sales tax returns in Vermont are generally due on the 23rd day of the following month for the previous period. Based on your annual tax liability, you may qualify for a less frequent filing schedule:
- Quarterly filing: Available if your annual tax liability is below $2,500 (returns due 23rd day of the month following the end of the quarter)
- Annual filing: Available if your annual tax liability is below $500 (returns due January 23rd of the following year)
Note: Vermont requires filing even if no sales were made or no tax is due (zero-dollar returns). SaaS became taxable in Vermont effective July 1, 2024. Certain municipalities may impose a 1% local option sales tax.
You can file your Vermont sales tax return through the myVTax at https://myvtax.vermont.gov/.
Does Vermont offer a timely filing discount?
Vermont does not offer a timely filing discount or vendor compensation credit.
What are the penalties for late filing in Vermont?
Vermont imposes the following penalties for non-compliance:
- Late filing penalty: 5% of the tax due per month (or part of a month), up to a maximum of 25%
- Late payment penalty: 5% of the unpaid tax per month, up to 25%
- Minimum penalty: $50 for each late return
- Interest: Accrues on unpaid tax from the due date at the statutory rate
Penalties may be waived for reasonable cause.
Is shipping taxable in Vermont?
In Vermont, the taxability of shipping and handling depends on how the charge is presented. Generally: • Taxable: If the shipping charges are mandatory or included in the price of a taxable item. • Non-Taxable: If shipping is separately stated on the invoice and provided as an optional service to the customer. Note: If you ship a mix of taxable and non-taxable goods in Vermont, the shipping charge must usually be prorated to determine the taxable portion. Confirm current rules with Vermont Department of Taxes at https://tax.vermont.gov/.
Does Vermont have a Remote Seller program?
Vermont requires remote sellers who exceed the economic nexus threshold to register, collect, and remit sales tax using standard state rates.