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Tax-Exempt Nonprofit Organizations

Nonprofit organizations must file returns and pay—or collect and remit taxes—for some tax types in Vermont. Nonprofits should not assume that just because they have obtained “tax-exempt” status at the federal level through the IRS, they do not need to pay or remit any taxes in Vermont. If you operate or manage a nonprofit, you should learn which Vermont taxes apply to you.

Eligible Tax-Exempt Nonprofits

Vermont follows the federal IRS designations for tax-exempt nonprofit organizations found in federal law at 26 U.S.C. Subchapter F.  Some of these exempt nonprofits must pay Vermont taxes or collect and remit Vermont taxes under certain circumstances, which are described below.

Many federally exempt nonprofits are 501(c)(3), organized for exempt purposes that include charitable, religious, educational, scientific, literary, etc. There are other types of exempt nonprofits, such as 501(c)(4), social welfare organizations; 501(c)(5), labor and agricultural organizations; 501(c)(8) and 501(c)(10), review fraternal societies; 501(c)(19) or Vermont Business Taxes and Your 501(c)(19) Organization, Veterans organizations; and more. Please review your IRS determination letter to be certain of the designation assigned to your nonprofit.

When the IRS revokes the federally designated tax-exempt status of an organization, the organization can no longer claim tax-exempt status under Vermont law. The day following the date of revocation, the organization is subject to Vermont taxes as any for-profit, commercial business operating in Vermont.

Exemptions by Tax Type

Below you will find helpful tools and a list of tax types to help you understand your tax responsibilities:

myVTax Instructions

Title Number Revised

Tax Forms and Instructions

Form Number Instructions Title Revised

Fact Sheets and Guidance

Title Number Revised
Vermont Business Taxes and Your 501(c)(19) Organization FS-1145 2023

Statutes, Rules, and Regulations

Title Section
Defined 26 U.S.A. §527(e)
Entertainment Charges by Section 501(c)(3) Organizations and Political Organizations Technical Bulletin 61
Nonprofit Organizations Exemption Technical Bulletin 02
Purchaser- Based Treatment of the Meals and Use Tax and Sales and Use Tax Technical Bulletin 13
Sale by Tax Exempt Organizations Technical Bulletin 19