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Local Option Tax

Local option tax (LOT) is a way for municipalities in Vermont to raise additional revenue. A municipality may vote to levy the following 1% local option taxes in addition to state business taxes. Please note: Local option tax does not apply to the sale or rental of motor vehicles which are subject to the motor vehicle purchase and use tax.

Local Option Sales Tax: 6% sales tax + 1% = 7% total tax

Local Option Meals Tax: 9% meals tax + 1% = 10% total tax

Local Option Alcoholic Beverage Tax: 10% alcohol tax + 1% = 11% total tax

Local Option Rooms Tax: 9% rooms tax + 1% = 10% total tax

Requesting a Refund for Local Option Tax Charged in Error

What should I do if I was charged Local Option Tax but shouldn’t have been?

Sometimes businesses mistakenly charge customers local option tax. If this happens, the easiest way to get your money back is to contact the business where you made the purchase to request a refund for the tax paid in error.

If the business is unable to provide a refund, you can request a refund directly from the Vermont Department of Taxes by completing and submitting form REF-620, Application for Refund of Vermont Sales and Use Tax, Meals and Rooms Tax, or Local Option Tax. Please enclose a copy of your receipt(s) or invoice with the form.

Local Option Tax Finder

Search for a specific address or town to determine if a Local Option Tax is levied. Open the local option tax finder in new window.

Municipalities that have a 1% Local Option Sales Tax

Municipality Effective Date
Barre City October 2022
Brandon October 2016
Brattleboro July 2019
Burlington July 2006
City of Essex Junction October 2022
City of Rutland July 2023 (Effective beginning 7/01/2023)
Colchester October 2015
Dover July 2007
Killington October 2008 (Rescinded as of 7/1/2018)
Manchester April 1999
Middlebury October 2008
Montgomery October 2022
Rutland Town April 2009
Shelburne July 2023 (Effective beginning 7/01/2023)
St. Albans City October 2020
St. Albans Town July 2014
South Burlington October 2007
Stowe July 2023 (Effective beginning 7/01/2023)
Stratton July 2004
Williston July 2003
Wilmington July 2012
Winhall July 2010
Winooski July 2019

Municipalities that have a 1% Local Option Meals and Rooms Tax and Alcoholic Beverage Tax

Municipality Effective Date
Brandon October 2016
Brattleboro April 2007
Barre City October 2018
City of Essex Junction October 2022
Colchester October 2015
Dover July 2007
Hartford1 October 2017
Jamaica July 2023 (Effective beginning 7/1/2023)
Killington October 2008
Manchester April 2008
Middlebury October 2008
Montgomery October 2022
Montpelier October 2016
Rutland Town April 2009
Shelburne July 2023 (Effective beginning 7/01/2023)
St. Albans City October 2020
St. Albans Town July 2014
South Burlington October 2007
Stowe July 2006
Stratton July 2004
Williston July 2003
Wilmington July 2012
Winhall July 2010
Winooski July 2019
Woodstock July 2015

1The Town of Hartford includes Quechee, White River Junction, West Hartford, and Wilder

Municipalities that have a 1% Local Option Rooms Tax

Municipality Effective Date
Elmore July 2021
Londonderry July 2023 (Effective beginning 7/1/2023)
Wardsboro October 2023 (Effective beginning 10/1/2023)

Please note: The City of Burlington and the City of Rutland administer and collect their own local meals, entertainment, lodging, or alcoholic beverage taxes. If you have a business in Burlington or Rutland 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

How to Calculate and Remit Local Option Tax

As of November 2022, the Vermont Department of Taxes will only accept returns from businesses who collect and report Local Option Tax if they are filed electronically.

Local option tax is calculated as 1% of the taxable (net) sales for each town. A transaction is subject to local option tax if it is subject to the Vermont sales, meals, rooms, or alcoholic beverage tax. Local option tax is “destination-based.” In other words, the tax is collected based on the location where the buyer takes possession of the item or where it is delivered.

All vendors, including out of state vendors, authorized to collect taxes in Vermont are required to collect and remit to the Vermont Department of Taxes all applicable local option taxes for sales that occur in participating municipalities. No additional registration with the Department is necessary.

Although local option tax is levied by the municipality, the Department collects and administers the tax. Vendors who collect this tax file and remit it to the Department along with their electronically filed state taxes.

  • Form SUT-451, Sales and Use Tax Return

  • Form MRT-441, Meals and Rooms Tax Return

Be sure to charge, collect, and remit local option tax for applicable purchases in the municipality where the buyer is consuming or taking possession of the item or where the item is being delivered.

Meals and Rooms Tax Forms and Instructions

Number Instructions Title
B-2   Notice of Change
BR-400   Application for Business Tax Account
BR-401   Change In Business Principals With Fiscal Responsibility
M-3   Vermont Meals Tax Exemption Certificate for Purchases of Meals For Resale
MRT-441 Instructions Meals and Rooms Tax Return
REF-620 Instructions Application for Refund of Vermont Sales and Use Tax, Meals and Rooms Tax, or Local Option Tax

Sales and Use Tax Forms and Instructions

Number Instructions Title
B-2   Notice of Change
BR-400   Application for Business Tax Account
BR-401   Change In Business Principals With Fiscal Responsibility
F0003   Streamlined Exemption Certificate
REF-619   Application for Refund of Miscellaneous Taxes
REF-620 Instructions Application for Refund of Vermont Sales and Use Tax, Meals and Rooms Tax, or Local Option Tax
S-3   Vermont Sales Tax Exemption Certificate for Purchases For Resale, by Exempt Organizations, and by Direct Pay Permit
S-3A   Vermont Sales Tax Exemption Certificate For Agricultural Fertilizers, Pesticides, Machinery & Equipment
S-3C   Vermont Sales Tax Exemption Certificate For Contractors Completing A Qualified Exempt Project
S-3E   Vermont Sales Tax Exemption Certificate For Net Metering, Home or Business Energy Systems Or Solar Hot Water Systems
S-3F   Vermont Sales Tax Exemption Certificate For Fuel or Electricity
S-3M   Vermont Sales Tax Exemption Certificate For Manufacturing, Publishing, Research & Development, or Packaging
S-3T   Dental - Vermont Sales Tax Exemption Certificate for Purchases of Toothbrushes, Floss and Similar Items of Nominal Value to be Given to Patients for Treatment
S-3V   Vermont Sales Tax Exemption Certificate For Registrable Motor Vehicles Other Than Cars and Trucks
S-3W   Vermont Sales Tax Exemption Certificate for Forestry and Wood Products Machinery, Equipment, and Repair Parts
SUT-451 Instructions Sales and Use Tax Return
SU-452   Vermont Use Tax Return
SUT-458   Aviation Jet Fuel and Natural Gas
SUT-459   Election by Manufacturer or Retailer Occasionally Acting as a Contractor