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Vermont’s sales and use tax is 6 percent on retail sales of taxable tangible personal property and some services. The use tax is the same as the sales tax. The consumer pays one or the other taxes. Vermont also has some taxes in local jurisdictions and some specialty taxes.
Types of taxes
Vermont has several excise taxes and local taxes in addition to the sales and use taxes.
Sales and use tax for sales of goods
In addition to the sales tax rate of 6 percent, consumers must pay a 6 percent use tax if they purchase taxable tangible personal property without paying the sales tax. For example, if a business purchases a pallet of a product for resale and uses a case of the product, it must pay use tax on the case it used.
Alcoholic beverage taxes
Retailers of alcoholic beverages must obtain a tax account and a liquor license. The business must post the license where customers can see it. Retailers can obtain licenses from the Vermont Department of Liquor Control.
If a restaurant sells alcohol for takeout, it must charge a tax of 10 percent on the alcohol. “Restaurant” includes:
- Dining rooms
- Lunch counters
- Clubs, private and social
- Salad bars
- Street vendors
- Theater concessions
- Street carts
- Catering businesses
- Food carts
The 10-percent tax also applies to alcohol served for immediate consumption. If the alcohol is being delivered, the delivery fee is part of the meal price and is also taxable. If a receipt is not itemized, delivery charges are taxed at the highest rate of the alcohol tax instead of the meal tax.
Grocery and convenience stores must collect an alcohol tax of 6 percent when selling alcohol, whether for pickup or delivery. The tax applies to alcohol that is suitable for human consumption and contains one-half of 1 percent or more of alcohol by volume.
Malt beverages and spirituous liquors are subject to a 10 percent alcoholic beverage tax.
Wholesale beer, wine, and liquor tax
Vermont also has a tax on beer and wine sold by wholesale dealers to retailers. If a manufacturer sells beer and wine directly to the public, the manufacturer pays the tax on those products. The beer and wine tax is as follows:
- Beer up to 6 percent alcohol by volume: $0.265 per gallon.
- Beer over 6 percent alcohol by volume: $0.55 per gallon.
- Wine: $0.55 per gallon.
Additionally, wholesalers must pay a tax on spirits and fortified wines as follows:
- Sales up to $500,000: 5 percent.
- Sales from $500,001 through $749,999: $25,000 plus 10 percent of any amount over $500,000.
- Sales from $750,000 and over: 25 percent.
Liquor sales tax
Grocery stores and convenience stores that sell liquor and beer, not for immediate consumption must also charge a 6-percent sales tax. If a municipality has the 1-percent local option tax, the businesses must also add the local option tax to the 6 percent state sales tax.
Cigarette and tobacco tax
- Pack of 20 cigarettes: $3.08 per pack.
- Pack of 25 cigarettes: $3.85 per pack.
- Little cigars: 1,000 sticks weighing 4.5 or fewer pounds: $0.154 each.
- Cigars: 1,000 sticks weighing 4.5 pounds or more with a wholesale cost of $2.17 or less: 92 percent of the wholesale price.
- 1,000 sticks weighing more than 4.5 pounds with a wholesale cost of $2.18 through $9.99 per cigar: $2.00 per cigar.
- 1,000 sticks weighing 4.5 pounds or more with a wholesale cost of $10.00 or more per cigar: $4.00 per cigar.
- Roll your own: $4.74 per ounce.
- Snuff sold by the ounce: $2.57 per ounce.
- Smokeless tobacco sold by the ounce: $2.57 per ounce.
- Smokeless tobacco sold in a package weighing less than 1.2 ounces: $3.08 per package.
- Chewing tobacco and pipe tobacco: 92 percent of the wholesale price.
- Electronic cigarettes: 92 percent of the wholesale price.
Motor fuel taxes
Retail sellers of coal, natural gas, electricity, propane, heating oil, dyed diesel fuel, and kerosene pay a fuel tax as follows:
- Heating oil, kerosene, propane, dyed diesel delivered in Vermont: $0.02 per gallon.
- Natural gas and coal: 0.75 percent.
- Electricity: 0.5 percent.
Compute the tax on the retail price of coal, natural gas, and electricity.
Local sales tax
Local jurisdictions that have the 1-percent local tax must collect the taxes and remit them to the Vermont Department of Taxes. The local options taxes are levied on rooms, alcoholic beverages, meals, and sales tax. Use tax is not part of the local option tax.
Currently, Burlington, Rutland, and St. Albans collect their own local option taxes. Instead of remitting them to the Vermont Department of Taxes, contact the business location city to pay the tax and remit tax returns.
- Burlington: (802) 865-7000
- Rutland: (802) 773-1800
- St. Albans: (802) 524-1500
Registering for and filing Vermont’s taxes
While some businesses may be able to remit tax returns and payments by paper filing, businesses must file online if:
- A business has multiple locations.
- The tax exceeds $100,000.
Computing Vermont’s retail sales tax of 6 percent
When making tax computations, carry the decimal to the third place. Round the tax to a whole cent. If the third decimal is greater than four, round up. If not, round down to the nearest cent. For example, if the tax you owe is $24,443.544, the tax is $24,443.55. If the tax you owe is $24,443.443, the tax is $24,443.44.
Sales tax due dates
If a business filer pays its tax liability quarterly, the due dates are the 25th day of the month following the collection period. For example, taxes collected from January through March – the first quarter – are due on or before April 25.
If a business taxpayer pays its tax liability monthly, the due dates are the 25th day of the month following the collection period. For example, taxes collected in April are due May 25.
Vermont sales tax exemptions
Vermont has several tax exemptions on sales of tangible personal property, including:
- Agricultural machinery and equipment used 75 percent of the time or more for the production of horticultural or agricultural commodities for sale.
- Forestry and wood products machinery, equipment, and repair parts.
- Advanced wood boilers installed as a primary heating system and has a higher heating value of 85 percent or more, contains a fuel feed system for at least a week and has an automated startup and shutdown, and meet the Vermont Department of Environmental Conservation’s efficiency and air emissions standards.
- Sales to the federal government.
- Sales to the State of Vermont.
- Sales to certain nonprofit organizations.
- Sales to certain volunteer fire departments, rescue squads, and ambulance companies.
Vermont sales tax holiday
Vermont does not have a sales tax holiday.
Remote and marketplace sellers
Remote sellers and marketplace facilitators must collect Vermont’s sales tax on retail sales into the state if their gross receipts for the previous year were $100,000 or more or if they made 200 or more individual sales into Vermont.
While those business taxpayers who do not meet those thresholds do not have to pay the tax, most do as a convenience to their customers. If the business does not collect and remit the tax, the consumer must file a use tax return.
Vermont’s sales and use tax rate is 6 percent. Several local jurisdictions have a 1 percent tax added to the state sales tax.
The purchaser can download a copy of the appropriate exemption certificate. The seller must keep the certificate on file for at least three years. The purchaser should also keep a copy of the resale certificate or exemption certificate on file.
If the business had a tax liability of at least $1,000 for the previous year, it must file monthly. If the tax liability is $500 or less per year, the business can file quarterly. The Vermont Department of Taxes assigns each business’s filing frequency at the time a business registers for an account.
Yes. Vermont is a member of the streamlined sales tax project.
If the item being delivered is taxable, then the delivery and freight charges are taxable.
Yes. Ice, including pre-packaged ice and ice purchased to keep beverages cold is taxable.