What Is Use Tax?
If you purchase an item delivered to or used in Vermont that is subject to the Vermont Sales Tax, but the seller did not charge sales tax, then you must pay use tax. This occurs when an item is purchased from an out-of-state seller not registered to collect tax in Vermont. This typically is a seller in a state that does not charge sales tax or a company that sells its merchandise over the internet.
Use tax is due at the same (6%) rate as sales tax. When you pay tax on an item purchased from a seller in a state with a lower sales tax, you then owe use tax on the difference between the Vermont sales tax and the lower tax rate of the other state.
You are required to remit your use tax annually when you file your Form IN-111, Vermont Income Tax Return. If you do not remit any use tax, you will be asked to certify that you do not owe any use tax by checking the box on Line 27 of Form IN-111.
How to Calculate Use Tax
Calculate your use tax by multiplying the 6% rate by the total of your purchase prices.
Please note: The purchase price includes any shipping/delivery charge. If you do not have accurate records, you can do the following:
- For all individual purchases that cost less than $1,000 each, use the Use Tax Reporting Table below to estimate your use tax
- For individual purchases that cost $1,000 or more each, calculate the exact use tax by multiplying the purchase price of each item by the 6% rate
- If you have a combination of both types of purchases, you can use the Use Tax Reporting Table to estimate the amount you owe on your purchases which are less than $1,000 each. Calculate the exact amount you owe on your purchases over $1,000 and add this amount to your estimated amount from the table.