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
6.00%
Local Rate?
Yes
Website
Vermont Department of Taxes
Sales Threshold
$100,000
Tax Line
(802) 828-2551
Transactions Threshold
200
You'll need to collect sales tax in Vermont if you have nexus there. There are two main ways that sellers can be tied to a state when it comes to nexus: physical, or economic.
Physical nexus means having enough tangible presence, or activity in a state to merit paying sales tax in that state.
Economic nexus means passing a states' economic threshold, for total revenue, or the number of transactions in that state.
You have a physical nexus if your business has a real, tangible presence in Vermont. This could be:
Economic nexus kicks in when your sales in Vermont hit a certain level, even if you're not physically there. In Vermont, you've got an economic nexus if:
Affiliate nexus happens when your business is closely linked to another company in Vermont, like a parent or sister company. This link can mean you need to handle sales tax if the Vermont-based company:
Click-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 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.
Did you know In Vermont, clothing and footwear over $110 are taxable, saving fashionistas a pretty penny.
You'll need to fill out the Business Tax Application (Form BR-400) to get your Vermont Sales Tax License. This form is available online through the myVTax portal, the go-to online system of the Vermont Department of Taxes.
Good news—it's free to register for Vermont sales tax!
Yes, 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.
Besides 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.
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.
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.
Usually, Vermont doesn't tax Software-as-a-Service (SaaS), but there are exceptions. For instance:
Vermont has exemptions, including:
Exemptions apply to certain groups, like:
When a customer is tax-exempt, get a completed Vermont Exemption Certificate from them. Keep this on file to cover yourself for that tax.
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!
Did you know Maple syrup is tax-free in Vermont, because it's the state's liquid gold.
Your filing schedule for Vermont sales tax depends on how much tax you collect, as assigned by the Vermont Department of Taxes. It could be monthly, quarterly, or annually, based on your sales tax liability.
If your annual sales tax collection exceeds $2,501, file and pay monthly. Due by the 25th of the following month.
If you collect between $501 and $2,500 annually, file and pay quarterly. Deadlines are April 25, July 25, October 25, and January 25.
If you collect less than $1,000 monthly, file and pay annually. Due by January 25 of the following year.
No rush if the due date falls on a weekend or holiday. It automatically moves to the next business day.
Filing is key to staying on the right side of tax regulations. Here’s a quick guide:
Late 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 Vermont
Vermont 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.
Navigating the tax landscape of Vermont reveals a well-defined system designed to support both the state's fiscal needs and the operational requirements of businesses. Vermont's approach to sales tax, including its rates and specific administrative processes, offers insights into the state's fiscal policies and their impact on commerce and daily life.
Overview of Vermont Sales Tax The Vermont sales tax is a crucial component of the state's revenue system, levied on the sale of most goods and services. This tax is instrumental in funding public services and infrastructure projects within the state. The Vermont state sales tax rate sets the baseline for the tax applied to purchases, providing a clear guideline for both consumers and businesses on the expected tax burden.
Understanding the Sales Tax Rate in Vermont The sales tax rate in Vermont is determined by the state and serves as a uniform rate applied across various transactions. This uniformity simplifies the calculation of taxes owed on purchases, making it easier for businesses to comply with tax collection requirements and for consumers to understand the final cost of their purchases.
Businesses operating in Vermont need to be particularly mindful of the Vermont sales tax rate as it directly affects pricing strategies and the overall cost to the consumer. Staying informed about the current sales tax rate in Vermont is essential for accurate accounting and financial planning.
For businesses, managing sales tax obligations in Vermont involves several administrative tasks, including the registration for and use of the Vermont sales tax login. This online portal is designed to streamline the filing and payment of sales taxes, offering businesses an efficient and accessible means of fulfilling their tax obligations.
Additionally, the Vermont resale certificate plays a crucial role for businesses engaged in the sale of goods intended for resale. This certificate allows businesses to purchase inventory without paying sales tax at the point of purchase, preventing the cascading effect of taxation that would increase the final cost to consumers. Obtaining and managing a Vermont resale certificate is a critical step for businesses looking to optimize their tax handling processes.
Yes, Vermont does have a sales tax, and understanding its implications is vital for both residents and businesses. The presence of sales tax in Vermont influences purchasing decisions and requires businesses to adhere to specific collection and remittance protocols.
Navigating the Vermont sales tax system requires a thorough understanding of the Vermont sales tax rate, administrative processes such as the Vermont sales tax login, and the proper use of tools like the Vermont resale certificate. Whether you're a consumer trying to understand "What is sales tax in Vermont?" or a business managing "Sales tax in Vermont," staying informed and compliant with state regulations is key to ensuring smooth financial operations and supporting the state's economic infrastructure through responsible tax contribution.
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