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Cannabis Excise Tax

Please note (As of April 2022): The Vermont Legislature is considering changes to the laws underlying the materials discussed here. The Department of Taxes will update this webpage to reflect any changes to Vermont law.

Vermont imposes a fourteen percent (14%) excise tax on the retail sale of cannabis and cannabis products. This includes food or beverages that contain any cannabis or cannabis product. Cannabis retailers and integrated licensees are required to collect the excise tax from purchasers at the time of a taxable sales transaction. These are the only two types of businesses allowed to make retail sales of cannabis. 

Note that buying or selling cannabis for resale (such as a sale from a cultivator to a retailer) is not subject to cannabis excise tax because the transaction is not a retail sale. 

See the Vermont Cannabis Tax Guide for more in-depth information about the topics covered here:

Download the Vermont Cannabis Tax Guide (pdf)

Registering Your Cannabis Business 

Before you begin operations, a business will need to perform these tasks in this order:

  1.  Request good standing certification from the Department of Taxes by sending an email with the following information to tax.ComplianceSupport@vermont.gov:
    • Your business name
    • ID (SSN or FEIN)
    • include "Good standing request for Cannabis license” in the subject line. 
  2. Obtain a license from the Cannabis Control Board.
  3. Register for or update your business tax account with the Department of Taxes to ensure the necessary tax accounts are set up. Registration is free.   

Please note: A business can register for multiple tax accounts at the same time. Cannabis retailers and integrated licensees need to register for both cannabis excise tax and sales and use tax. If a business already has a sales and use tax account, it does not need to register for a second sales and use tax account when registering for the cannabis excise tax.

After registration, the Department of Taxes will provide licenses for cannabis excise tax and sales and use tax which must be prominently displayed at the place of business. Please note that a cannabis excise tax license can be revoked by the Cannabis Control Board for failure to comply with Vermont laws and regulations.

Other Taxes Owed

In addition to cannabis excise tax, businesses making retail sales of cannabis and cannabis products must collect the following taxes from customers at the time of sale:

When filing a sales tax return, a business will need to report sales of cannabis and cannabis products separately from other taxable items, such as merchandise. The myVTax filing process will direct retailers to break out sales of cannabis products on a separate schedule accompanying the main sales and use tax return.

Collecting the Tax

The retail business making the sale is responsible for collecting the cannabis excise tax and remitting it to the Department of Taxes. This means the individuals responsible for the business are personally and individually responsible for the tax if it is not correctly paid or collected. In the case of corporations and similar entities, personal liability extends to any officer or agent of the entity. A business will also incur penalties and interest when tax is not correctly collected or remitted. 

Cannabis Excise Tax (14%) must be separately stated from Sales and Use Tax (6%) on the customer’s receipt.

Example without local option tax:

If $100.00 worth of cannabis or cannabis products is purchased from a retailer, the retailer must include an itemized receipt that separately lists $14.00 (14%) of cannabis excise tax and $6.00 (6%) sales and use tax.

 

Total = $120.00 (100 + 14 + 6)

 

Example with local option tax:

If $100.00 worth of cannabis or cannabis products is purchased from a retailer in a place that has a local option tax, the retailer must include an itemized receipt that separately lists $14.00 (14%) of cannabis excise tax, sales and use tax $6.00 (6%), and local option tax $1.00 (1%). The retailer has the option of showing sales and use tax and local option tax separately $6.00 (6%) and $1.00 (1%) or combined $7.00 (7%).

 

Total = $121.00 (100 + 14 + 6 + 1) or $121.00 (100 + 14 + 7)

 

How to Report and Pay

Retailers and integrated licensees must report and pay the cannabis excise tax electronically through the Cannabis Excise Tax portal at myVTax.vermont.gov using the instructions provided when the business first registered with the Department of Taxes.

If a business needs additional support with this process, it should contact the Department at 802-828-2551 or tax.business@vermont.gov before filing. 

Record Keeping

A retailer or integrated licensee is required to keep accurate records showing all transactions subject to cannabis excise tax for at least three years. The records are subject to inspection by the Department of Taxes at all reasonable times during normal business hours. 

Exemptions

Vermont allows some limited exemptions to the cannabis excise tax.  

A sale is exempt from cannabis excise tax if it is: 

  1. made by a licensed medical cannabis dispensary, and  
  2. made only to a registered qualifying patient or through a registered caregiver.

A sale is also exempt if Vermont lacks the authority to impose tax on a purchaser. This could occur if the State or federal government makes a purchase and in some other rare occasions.

A business must keep detailed records of any exemptions allowed for at least three years. 

Current Use Considerations

Licensed cannabis cultivators may legally grow and cultivate cannabis without enrolling the land in Current Use. Using land and buildings enrolled in Current Use for cannabis cultivation entails some special rules.

Vermont law requires that agricultural land and buildings first be enrolled for some other qualifying use or uses, such as growing hay, cultivating non-cannabis crops, pasturing livestock, or some other allowable agricultural purpose. The exact requirements vary according to other factors, such as the amount of land to be enrolled and how it will be used.

Refer to the Vermont Cannabis Tax Guide to see special rules about Current Use enrollment for cannabis cultivation and processing operators.

Contact Us

For additional information or assistance, please contact us at tax.business@vermont.gov or call (802) 828-2551.

Laws, Regulations, and Guidance

Number Title
GB-1313 Vermont Cannabis Tax Guide
18 V.S.A. § 4230a Vermont Laws Related to Civil Penalties for Illegal Consumption
External Links
Vermont Cannabis Control Board
Vermont Laws Relating to the Duty and Authority of the Cannabis Control Board
Vermont Laws Related to the Production and Sale of Cannabis
Vermont Regulations Related to the Production and Sale of Cannabis

Filing Deadlines

You must pay cannabis excise tax for the month by the 25th day of the following month. For example, a return for sales in June must be filed by the 25th of July.

Tax Period Ending Due Date
3/31/2022 4/25/2022
4/30/2022 5/25/2022
5/31/2022 6/27/2022
6/30/2022 7/25/2022
7/31/2022 8/25/2022
8/31/2022 9/26/2022
9/30/2022 10/25/2022
10/31/2022 11/25/2022
11/30/2022 12/26/2022
12/31/2022 1/25/2023
1/31/2023 2/23/2023
2/28/2023 3/27/2023
3/31/2023 4/25/2023