Certificates are available on the Vermont Department of Taxes website to entities eligible for exemptions or for exempt purchases. The buyer must complete the certificate with the type of exemption, information on the buyer and the seller, and details of the purchase. The buyer then provides the seller with the completed certificate at the time of the purchase.
Accepting an Exemption Certificate in “Good Faith”
The buyer must present to the seller an accurate and properly executed exemption certificate for the exempted sale. The responsibility is on the seller to determine if the buyer is submitting the exemption certificate in “good faith.” This requires the seller to be familiar with Vermont Sales and Use Tax law and regulations, including exemptions, that apply to the seller’s business. If the buyer provides a certificate that is not valid, e.g. the item purchased does not qualify for the exemption, this is not in good faith and the seller should not accept the certificate. When the seller accepts the certificate in good faith, the seller is not liable for collecting and remitting Vermont Sales Tax.
An exemption certificate is received at the time of sale in good faith when all of the following conditions are met:
- The certificate contains no statement or entry which the seller knows, or has reason to know, is false or misleading.
- The certification is on an exemption form issued by the Vermont Department of Taxes or a form with substantially identical language.
- The certificate is signed, dated and complete (all applicable sections and fields completed).
- The property purchased is of a type ordinarily used for the stated purpose, or the exempt use is explained.
Burden of Proof
The burden of proof is on the seller to demonstrate the certificate was taken in good faith. If the seller cannot provide an exemption certificate showing that the sale was exempt, the Department will seek to collect tax from the seller. If, however, the seller can prove the buyer’s claim for the exemption was false, the Department will seek to collect the tax from the buyer.
Obtaining the Exemption Certificate
The seller must obtain an exemption certificate from the buyer either prior to or at the time of the sale. If the certificate is not available at the time of sale, the seller has 90 days after the sale to obtain a fully executed certificate, accepted in good faith.
Retaining the Exemption Certificate
Sellers must retain exemption certificates for at least three years from the date of the last sale covered by the certificate to document why the tax was not collected from the buyer.
Multiple Purchase Exemption Certificates
If the buyer presents a “Multiple Purchase” exemption certificate to the seller, it may be used only when purchasing tangible personal property for use as indicated on the exemption certificate. For each purchase covered by the exemption certificate, the sales slip or invoice must show the buyer’s name and address sufficient to link the purchase to the exemption certificate on file.
Limited Presumption for Small Quantities of Fuel Purchased for Residential Use
There is a presumption of exemption and no exemption certificate is required, for sales of small quantities of fuel commonly used for residential and domestic use, but often purchased at a vendor’s location and not delivered, including charcoal briquettes, fire logs, and fire starters. This presumption does not apply – and a vendor is required to obtain an exemption certificate – if any of the following is true: (1) the sale exceeds $250.00; or (2) the vendor knows, or has reason to know, that the purchaser is not an individual (i.e., that the purchaser is a corporation, LLC, or other business) or that the fuel will not be used for residential and domestic use. The presumption will not apply if the purchaser has an account with the vendor that indicates that the purchaser is not an individual.
Here is a list of exemption certificates with instructions. Please read instructions carefully making sure all conditions of the certificate apply to the organization or purchase before submitting or receiving an exemption certificate.
|M-3||Vermont Meals Tax Exemption Certificate for Purchases of Meals for Resale|
|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 Registerable Motor Vehicles Other than Cars and Trucks|
|S-3W||Vermont Sales Tax Exemption Certificate for Forestry and Wood Products Machinery, Equipment, and Repair Parts, and Accessories|