Welcome to our handy guide on Vermont sales tax. We'll walk you through everything you need to know, from the specific sales tax rates in different counties and cities across Vermont to answering some of the most common questions. Plus, we'll guide you on how to efficiently collect and file your sales tax in Vermont.
Sales Tax Rate
Vermont Department of Taxes
Click-Through NexusClick-through nexus is about online referrals. If a Vermont-based partner (like a blogger) sends customers to your website through a unique link, and you make over $10,000 from those referrals in a year, you've got click-through nexus.
Marketplace NexusMarketplace nexus involves third-party sales through platforms like Amazon. In Vermont, these marketplace facilitators are in charge of collecting and paying sales tax for their sellers, as long as they meet the state’s economic nexus criteria.
In Vermont, clothing and footwear over $110 are taxable, saving fashionistas a pretty penny.
How to Get Your Vermont Sales Tax Permit
Cost of Registering for a Vermont Sales Tax LicenseGood news—it's free to register for Vermont sales tax!
Federal Tax ID for Vermont Sales Tax LicenseYes, you'll need a Federal Tax ID Number or EIN for your Vermont Sales Tax License. It's used by the IRS to identify your business. If you don't have one, you can get it free from the IRS website and receive your number right away.
Other Vermont Registrations to ConsiderBesides the Department of Taxes, you may need to register with the Vermont Secretary of State, especially for corporations, LLCs, partnerships, or non-profits. This establishes your legal presence in Vermont. And if you have employees, check with the Vermont Department of Labor for unemployment insurance tax and workers' compensation requirements. A business advisor or tax pro can help make sure you're all set with registrations.
Is Vermont an Origin or Destination Sales Tax State?States fall into two categories for sales tax: origin-based or destination-based. Vermont is a destination-based state. This means you charge sales tax based on your customer's location in Vermont, not where you're selling from.
What Sales are Subject to Sales Tax in Vermont?In Vermont, most physical items and some services are taxable. Think furniture, electronics, non-prescription drugs, and prewritten software. Plus, certain services like telecommunications and security services are on the taxable list too.
Is Software as a Service (SaaS) Taxed in Vermont?
What is Exempt from Vermontne Sales Tax?
Who is Eligible for Vermont Sales Tax Exemptions?
What To Do If Your Customer is Exempt from Sales Tax in Vermont?When a customer is tax-exempt, get a completed Vermont Exemption Certificate from them. Keep this on file to cover yourself for that tax.
What if You Lose a Vermont Sales Tax Exemption Certificate?If you misplace a Vermont Sales Tax Exemption Certificate, get a new one from your customer pronto. Without it, you might be on the hook for any sales tax not collected. Better safe than sorry in the sales tax world!
Maple syrup is tax-free in Vermont, because it's the state's liquid gold.
What If a Filing Date Falls on a Weekend or Holiday?No rush if the due date falls on a weekend or holiday. It automatically moves to the next business day.
How to File a Vermont Sales Tax Return
Penalties for Late Filing in VermontLate filing or payment can lead to a 5% monthly penalty (max 25%). Underpayment incurs a 1% monthly penalty. Interest accrues on unpaid tax from the due date until payment.
Sales Tax Incentives in VermontVermont offers incentives like the Sales Tax Reallocation program for infrastructure financing and the VEPC TIF program for municipal infrastructure financing. For up-to-date info, visit the Vermont Department of Taxes or consult a tax professional.
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