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| Killington | October 2008 (Rescinded as of 7/1/2018) |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) |
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.
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Form SUT-451, Sales and Use Tax Return
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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.