Businesses must collect Vermont Meals and Rooms Tax from their customers on the purchase price at the rates shown below and remit the tax to the Vermont Department of Taxes.
- 9% on sales of prepared food and food sold in restaurants, bars, etc.
- 9% on room rentals, including meeting rooms in hotels
- 10% on sales of alcoholic beverages served in restaurants, bars, etc.
Alcoholic beverages sold on the premise of a restaurant are subject to the alcoholic beverage tax.
How to Calculate Meals and Rooms Tax
To determine tax due, multiply the sale amount by 9% (or 10% if the sale is subject to local option tax), and round up to the nearest whole cent according to the following rules:
- Tax computation must be carried to the third decimal place, and
- The tax must be rounded to a whole cent using a method that rounds up to the next cent whenever the third decimal place is greater than four.
Sellers may elect to compute the tax due on a transaction on an item or an invoice basis. This rounding rule may be applied to the aggregated state and local taxes.
Before You Open for Business:
Vermont businesses, including nonprofits, must register for a Vermont Business Tax Account and a Meals & Rooms Tax license prior to collecting the tax. Registration is free.
Ready to register for your business tax account?
Apply for your License
If your business will be collecting Meals and Rooms Tax, you are required to obtain a license from the Department. The license authorizes you to collect taxes on behalf of the State of Vermont.
The license must be displayed at your place of business where it can be easily seen by customers. There is no charge for a Meals and Rooms Tax license.
Operating More Than One Location in Vermont
You will have just one Vermont Business Tax Account, but each location must obtain its own license and will file its own meals and rooms tax schedule. To obtain additional licenses, you must register each location separately.