If your business is selling meals or renting rooms, you must charge, collect, and remit Vermont Meals and Rooms Tax to the Vermont Department of Taxes. Be sure to post your Vermont license authorizing you to collect meals and rooms tax in a place where customers can see it.
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.
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.
What is taxable in Vermont?
Any meal offered for sale by a “restaurant” or room offered for sale by a “hotel.” It is important to know what is included in the definition of a “restaurant” or a “hotel.” Please read the Vermont Meals and Rooms Tax regulations and fact sheets for more detail.
Please note: If you offer a room in your home (or any kind of privately owned lodging) for rent and your rental falls within the guidelines for a “hotel,” you must collect and remit rooms tax.
The Vermont Meals and Rooms Tax is 9%
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.
Filing Your Return
Go to our Meals & Rooms Tax section for a list of filing methods, forms, and tools to help you get started.
Local Option Tax
If you are doing business in or delivering products to a municipality with a 1% local option meals and/or rooms tax, you must also collect and remit that tax to the Vermont Department of Taxes. Learn more about Local Option Tax, including a list of local option towns.
Other Local Taxes
The City of Burlington and the City of Rutland administer and collect their own local entertainment, meals, and lodging taxes. If you have a business or do business in Burlington City or Rutland City, please contact the city for information on how to collect and remit the tax. The Vermont Department of Taxes does not collect these taxes.