Click Through Nexus

What Is the Click Through Advertising Law?

When a remote seller has an agreement with a Vermont resident to refer customers to the seller, then the seller must collect and remit Vermont Sales Tax if the seller has made taxable sales in Vermont in excess of $10,000 in the previous year. 32 V.S.A. Sec. 9701(I).

For example, a Vermont resident is an author with her own website. On her website she sells her books through an online seller and displays a link to the company’s website, establishing click through nexus. The customer is able to “click through” to the website and purchase the book, which is subject to sales tax in Vermont. If the seller has sold more than $10,000 in taxable sales to customers in Vermont, the seller must collect the tax and remit it to the Vermont Department of Taxes.

The Vermont legislature passed the click through nexus advertising law in 2011. Because the Vermont law was contingent on 16 other states passing similar laws, it did not become effective until Oct. 13, 2015. Online retailers were required to collect and remit Vermont sales tax beginning December 1, 2015.

Who Is Affected?

Those affected are retailers who do not have a physical presence in Vermont but that contract to advertise on websites of individuals or businesses located in Vermont.

What Do I Need to Do?

If you are a remote seller affected by this law, you must register for a Vermont business tax account and license to collect and remit Vermont Sales Tax. You may register online using myVTax.