We provide information, so you can determine when Vermont Sales and Use Tax applies to your business. If your business is selling tangible personal property (TPP) that is taxable in Vermont, you must charge, collect, and remit sales tax to the Vermont Department of Taxes. Be sure to post your Vermont license authorizing you to collect sales 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 license prior to collecting the tax. Registration is free.
Apply for a License to Collect
If your business will be collecting Vermont Sales and Use Tax, you are required to apply for a license. The license shows that you are authorized 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 license.
Multiple Locations
If you operate in 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 sales and use tax schedule. To obtain the additional licenses, register each separate location.
What is Taxable in Vermont
TPP sold to a customer in Vermont or delivered to a Vermont address is subject to Vermont Sales and Use Tax.
If you are selling alcoholic beverages in your grocery or convenience store, see the information on the Alcoholic Beverage Tax.
How to Calculate Sales Tax and File Sales and Use Tax
Tax Rate
The Vermont Sales and Use Tax is 6%.
To determine tax due, multiply the sales amount by 6% (or 7% 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.
Go to our Sales and Use Tax section for a list of filing methods, forms, and tools to help you get started. Whether you do your own filing using a paper return, file electronically, or use a professional tax preparer, be sure you have the information you need before you begin. The following is a basic checklist to get you started:
- Business name
- Federal ID number (FEIN)
- Mailing address
- Reporting period
- Business tax account number
- Total of all sales of taxable and nontaxable tangible personal property
- Total nontaxable sales
- Total taxable sales
- Total amount of state use tax due on purchases subject to use tax
- Total taxable sales made in a local option tax municipality
Purchases Subject to Use Tax
Vermont businesses should know what use tax is and when they need to pay it. Vermont’s 6% use tax is due if tax is not collected on a taxable purchase. This occurs when the seller is not registered with the Vermont Department of Taxes to collect tax and therefore does not charge Vermont tax. Examples of sellers who do not charge sales tax are many online vendors and vendors located in states with no sales tax—New Hampshire, for example—or states with lower sales taxes.
When is Use Tax Paid?
- When you make a purchase from a vendor not registered to collect tax with the state of Vermont
- When you use property you normally manufacture for sale
- When you use property in the operation of your business or for personal use that you originally purchased for resale with an exemption certificate
- Self-employed individuals purchasing items for use in their business must follow the rules for businesses.
- Individuals may also be responsible for personal use tax on Vermont taxable purchases where sales tax was not paid and must be claimed on the Vermont personal income tax return.
Exemptions
If you own a business that purchases items from a distributor or wholesaler and resells them to a customer at retail, you may be exempt from paying sales tax on items you’ve purchased for resale. You must then charge sales tax on items subject to tax that you resell at retail to customers.
To take the exemption, you must provide a Form S-3, Vermont Sales Tax Exemption Certificate for Purchases for Resale, by Exempt Organizations, and by Direct Pay Permit. You also must have a Vermont Sales and Use Tax account with the Department.
Learn more about sales and use tax exemptions, including the resale exemption, exemptions for certain industries, and types of exemptions. The Department also offers fact sheets on Vermont Sales and Use Tax for specific types of businesses.
Local Option Tax
If you are doing business in or delivering products to a municipality with a 1% local option tax, you must also collect and remit that tax to the Vermont Department of Taxes. Towns may have one or more of the following local option taxes: sales tax and/or meals, alcoholic beverages, and rooms tax.
Please note: Use tax is not subject to local option tax.
Other Local Taxes
The City of Burlington, City of Rutland, and City of St. Albans administer and collect their own local meals, entertainment, lodging, or alcoholic beverage taxes. If you have a business in Burlington, Rutland City, or St. Albans City, please contact the appropriate city for information on how to pay and remit the tax.
Contact the City of Burlington:
(802) 865-7000
Contact the City of Rutland:
(802) 773-1800
Contact the City of St. Albans:
(802) 524-1500