Vermont — Sales & Use Tax

Vermont imposes a sales tax on retail sales in the state at a rate of 6 percent of the sales price.

Source: 32 V.S.A. § 9771

The tax applies to retail sales of tangible personal property unless specifically exempted by statute. Tangible personal property is defined as personal property that may be seen, weighed, measured, felt, touched, or in any other manner perceived by the senses. This definition includes electricity, water, gas, steam, and prewritten computer software.

Source: 32 V.S.A. § 9701(7)

The sales tax also applies to:

• Producing, fabricating, printing, or imprinting of tangible personal property for consumers who furnish the materials (either directly or indirectly)
• Rentals of tangible personal property
• Amusement charges
• Fabrication charges
• Specified digital products transferred electronically to an end user, regardless of whether for permanent use or less than permanent use

Source: 32 V.S.A. § 9771

Source: Vermont Dept. of Taxes, Sales and Use Tax

## Local option tax

Certain municipalities in Vermont may impose an additional local option sales tax of up to 1 percent on top of the 6 percent state rate, resulting in a combined rate of up to 7 percent in those jurisdictions. Local option tax applies only to sales tax, not use tax.

Source: Vermont Dept. of Taxes, Getting Started with Sales and Use Tax

## Use tax

Vermont imposes a complementary use tax at the same 6 percent rate on the use, storage, or consumption of tangible personal property in Vermont when sales tax has not been paid. Use tax is due when a purchaser acquires taxable property from an out-of-state vendor who does not collect Vermont sales tax, or when property purchased tax-free for resale is later used by the purchaser.

Source: 32 V.S.A. § 9773

Source: Vermont Dept. of Taxes, Use Tax for Individuals

Vermont applies destination-based sourcing for sales and use tax. The applicable tax rate is determined by the location where the purchaser takes possession of the property or where the property is delivered.

Source: Vermont Dept. of Taxes, Use Tax for Individuals

Vermont requires remote sellers to register and collect sales tax if they have sales of $100,000 or more, or 200 or more separate transactions, delivered into Vermont during the preceding twelve-month period. Both taxable and nontaxable sales count toward the threshold according to Department guidance.

Threshold Measurement Period: The threshold is measured on a rolling twelve-month basis, not by calendar year or quarter. Remote sellers must continuously monitor their Vermont sales to determine when they cross the threshold. Vermont statute (32 V.S.A. § 9701(9)(F)) specifies "the preceding 12 months" as the measurement period, rather than any fixed calendar period.

Timing of Registration and Collection Obligation: Upon exceeding either threshold, Vermont law and Department guidance require remote sellers to register and immediately begin collecting and remitting sales tax—there is no grace period until the next month or quarter. The Department of Taxes FAQ directs remote sellers to register and begin collection duties as soon as they cross the threshold.

This rule took effect July 1, 2018, following the South Dakota v. Wayfair decision. Vermont's practice is reflected in both statute and Department FAQ, and there is no provision for a delayed registration or collection obligation once the threshold is exceeded.

Source: 32 V.S.A. § 9701(9)(F) Source: Vermont Department of Taxes, Sales Tax and Wayfair FAQs

Vermont exempts purchases for resale from sales tax. A "retail sale" is defined as any sale for any purpose other than for resale, sublease, or subrent; accordingly, sales for resale are not subject to tax.

To claim the exemption, the buyer must provide the seller with a completed Form S-3 (Vermont Sales Tax Exemption Certificate) at or before the time of purchase. The seller has 90 days after the sale to obtain a fully executed certificate if it was not available at the time of sale. A seller's failure to possess an exemption certificate at the time of sale is presumptive evidence that the sale is taxable. Sellers must retain exemption certificates for at least three years from the date of the last sale covered by the certificate and must produce the certificate when requested by the Department.

Form S-3 may be used for a single purchase or as a blanket certificate for multiple purchases. The buyer must hold a valid Vermont Sales and Use Tax account to claim the exemption.

Source: 32 V.S.A. § 9701(5) Source: 32 V.S.A. § 9745 Source: Vermont Department of Taxes, Form S-3 Instructions

Vermont assigns filing frequency based on sales and use tax liability in the immediately preceding calendar year. Taxpayers with $500 or less in liability file annually by January 25. Those with more than $500 but less than $2,500 file quarterly by the 25th day of the month following each calendar quarter (April 25, July 25, October 25, January 25). All others file monthly by the 25th of the following month, except February filings are due on the 23rd.

Source: 32 V.S.A. § 9775 Source: Vermont Department of Taxes, Sales and Use Tax FAQs

Vermont requires marketplace facilitators to collect and remit sales tax on retail sales made by marketplace sellers through a marketplace. This obligation took effect June 1, 2019.

## Threshold for marketplace facilitators

A marketplace facilitator who has facilitated sales by marketplace sellers to destinations within Vermont of at least $100,000, or totaling at least 200 individual sales transactions, during the twelve-month period preceding the monthly period with respect to which that person's liability for tax is determined must collect and remit sales tax. The threshold calculation includes both taxable and nontaxable sales.

Source: 32 V.S.A. § 9701(9)(J)

## Definition of marketplace facilitator

A "marketplace facilitator" is defined under 32 V.S.A. § 9701(56) as a person who contracts with marketplace sellers to facilitate, for consideration (regardless of whether deducted as fees from the transaction), the sale of the marketplace seller's products through a physical or electronic marketplace operated by that person and engages in both:

(A) Directly or indirectly through one or more affiliated persons, one or more of the following:

• Transmitting or otherwise communicating the offer or acceptance between purchasers and marketplace sellers
• Owning or operating the infrastructure, electronic or physical, or technology that brings purchasers and marketplace sellers together
• Providing a virtual currency that purchasers are allowed or required to use to purchase products from marketplace sellers
• Software development or research and development activities related to any of the subdivision (B) activities, if such activities are directly related to a physical or electronic marketplace

(B) One or more of the following with respect to the marketplace sellers' products:

• Setting the price of the product
• Providing customer service or return and exchange service
• Advertising or promoting the product
• Branding sales as those of the marketplace facilitator
• Taking orders
• Collecting payment from the purchaser and transmitting that payment to the marketplace seller, regardless of whether the marketplace facilitator receives compensation or other consideration in exchange for that service

The definition requires activities from both prongs (A) and (B).

Source: 32 V.S.A. § 9701(56)

## Collection and remittance obligation

Under 32 V.S.A. § 9713(a), marketplace facilitators shall collect and remit the sales tax on retail sales by marketplace sellers through a marketplace. Marketplace sellers shall collect and remit the sales tax on any retail sales within Vermont that are not made through a marketplace.

Marketplace facilitators are included in the definition of "persons required to collect tax" under the sales and use tax chapter with respect to retail sales made on behalf of a marketplace seller.

Source: 32 V.S.A. § 9713(a) Source: 32 V.S.A. § 9701(14)

## Certification and exclusion from seller's collection obligation

A marketplace facilitator shall certify to its marketplace sellers that it will collect and remit the sales tax on the sale of taxable items made through its marketplace. A marketplace seller that accepts a certification from a marketplace facilitator in good faith shall exclude sales made through the marketplace from its obligation as a vendor under the sales and use tax chapter.

Source: 32 V.S.A. § 9713(b)

## Threshold for marketplace sellers

A marketplace seller who has combined sales to a destination within Vermont and sales through a marketplace to a destination within Vermont of at least $100,000, or totaling at least 200 individual sales transactions, during the twelve-month period preceding the monthly period with respect to which that person's liability for tax is determined has a collection obligation. However, sales made through a marketplace may be excluded from the seller's collection obligation if the marketplace facilitator has certified that it is collecting tax on those marketplace sales.

Source: 32 V.S.A. § 9701(9)(K) Source: 32 V.S.A. § 9713(b)

## Liability relief for facilitators

A marketplace facilitator is relieved from liability under the sales and use tax chapter if it can demonstrate to the Commissioner that its failure to collect the correct amount of tax was due to incorrect information given to the facilitator by the marketplace seller.

Source: 32 V.S.A. § 9713(c)

Vermont exempts sales of food, food products, and beverages sold for human consumption off the premises where sold from sales and use tax. This exemption is codified at 32 V.S.A. § 9741(13) and applies to retail sales and use of these items.

## Statutory definition of food and food ingredients

Vermont statute defines "food and food ingredients" as "substances, whether in liquid, concentrated, solid, frozen, dried, or dehydrated form, that are sold for ingestion or chewing by humans and are consumed for their taste or nutritional value." This definition is product-based: the exemption applies regardless of who purchases the food or the purchaser's intended use. A business purchasing food for employee meals receives the same exemption as an individual purchasing groceries for home consumption, provided the food qualifies under the definition and is sold for off-premises consumption.

The exemption covers most grocery staples—fruits, vegetables, meats, dairy products, bread, cereals, frozen foods, packaged goods, candy, and dietary supplements—when sold in a form indicating they are intended for consumption off the seller's premises.

## Four statutory exclusions from the food exemption

Under 32 V.S.A. § 9701(31), "food and food ingredients" does not include the following four categories, which remain subject to Vermont sales and use tax or other taxes:

1. Soft drinks — Effective July 1, 2015, Vermont subjects soft drinks to the 6% sales and use tax. The statute defines soft drinks by reference to 32 V.S.A. § 9701(31) and (54). The Department of Taxes describes soft drinks as nonalcoholic beverages that contain natural or artificial sweeteners. This category includes carbonated sodas, sweetened iced teas, energy drinks, sports drinks, and similar sweetened beverages. By contrast, beverages such as milk, 100% fruit juice, coffee beans, bottled water, and unsweetened beverages remain exempt as food and food ingredients.

2. Alcoholic beverages — Alcoholic beverages sold at retail in sealed containers for off-premises consumption are subject to the 6% sales and use tax and are excluded from the food exemption. This exclusion applies to bottles or cans of beer, wine, and spirits purchased at liquor stores, grocery stores, or convenience stores for consumption elsewhere. (Alcoholic beverages sold for immediate consumption at restaurants or bars are subject to a separate 10% alcoholic beverages tax under Vermont's meals and rooms tax chapter, not the sales tax.)

3. Tobacco — Tobacco products are excluded from the food exemption and are subject to separate excise taxation.

4. Cannabis and cannabis products — Cannabis and cannabis products as defined under 7 V.S.A. § 831 are excluded from the food and food ingredients exemption.

## Off-premises consumption requirement

The exemption in § 9741(13) applies only to food "sold for human consumption off the premises where sold." Food sold for immediate consumption on or near the seller's premises does not qualify for the sales tax exemption and instead may be subject to Vermont's meals and rooms tax under 32 V.S.A. Chapter 225.

Prepared meals sold by restaurants, hot food items, sandwiches from a deli (except frozen sandwiches), heated beverages, items from salad bars, and party platters are generally treated as sales for immediate consumption and fall outside the sales tax exemption. By contrast, grocery-type items sold for take-out—such as whole pies or cakes, loaves of bread, whole uncooked pizzas, pint or larger containers of ice cream, and quart or larger containers of milk or cider—are treated as food sold for off-premises consumption and remain exempt from sales tax.

The characterization depends on the form, packaging, and circumstances of sale. A grocery store selling a cold, unheated sandwich in a sealed package for the customer to take home is selling food exempt from sales tax; a deli counter preparing and serving a hot sandwich for immediate consumption is selling a meal potentially subject to meals tax. Vermont regulation and Department guidance (including Publication FS-1028) provide examples to help sellers distinguish exempt groceries from taxable meals.

## Interaction with local option tax

Vermont permits municipalities to impose a local option sales tax of up to 1% on sales subject to the state's 6% sales tax. Because food and groceries are exempt from state sales tax under § 9741(13), they are also exempt from any local option sales tax. Only items subject to state sales tax (such as soft drinks and sealed alcoholic beverages) can be subject to the local option tax.

Source: 32 V.S.A. § 9741(13) Source: 32 V.S.A. § 9701(31) Source: Vermont Department of Taxes, General Guidelines on Sales Tax: What is Taxable and Exempt (Publication FS-1028)

Vermont law establishes physical presence nexus for sales and use tax based on a comprehensive statutory definition of “vendor” in 32 V.S.A. § 9701(9). A seller is obliged to collect Vermont sales tax if it engages in certain in-state activities, regardless of economic nexus. Core statutory triggers for Vermont physical presence nexus include:

1. Maintaining a place of business in Vermont Nexus is created if the vendor owns, leases, or operates—directly or through a subsidiary—an office, place of distribution, warehouse, sales house, or other business location within the state.

2. Having in-state employees, agents, or representatives A vendor has nexus if it employs or contracts with any agent, employee, salesperson, contractor, or other representative to operate within Vermont—either permanently or temporarily—for purposes such as soliciting sales, taking orders, delivering/servicing products, or performing installation. The law covers all such representatives “whether or not such agent or representative is regularly employed.”

3. Owning or leasing tangible property in Vermont, including inventory in third-party warehouses Physical presence is established if the vendor owns tangible personal property—such as inventory, equipment, or assets—located in Vermont, whether on its own premises or placed with a third party to be sold at retail.

4. In-state delivery or installation activities by the seller If a vendor delivers property into Vermont using its own vehicles, employees, or contractors—as opposed to common carrier—or sends personnel to perform installation, setup, or post-sale service, such activities trigger nexus.

Vermont’s statute mirrors model provisions from the Streamlined Sales and Use Tax Agreement (SSUTA). The authority for these triggers is found at 32 V.S.A. § 9701(9)(B)-(C); the law does not enumerate safe harbors for these physical in-state activities.

Source: 32 V.S.A. § 9701(9)(B)-(C)

Direct answer: Vermont imposes click-through (affiliate) nexus for sales and use tax purposes: a remote seller is presumed to have nexus if it enters an agreement with a Vermont resident who, for commission or other consideration, refers potential customers to the seller (by a link on a website or otherwise), and the seller's cumulative gross receipts from such referrals to customers in Vermont exceed $10,000 in the preceding tax year.

Why (legal basis): This presumption is established by 32 V.S.A. § 9701(9)(I), added as part of Act 45 (2011), effective December 1, 2015. The statute covers referrals “by a link on an Internet website or otherwise,” making Vermont one of the states with a legislative click-through/affiliate nexus test. The presumption only applies once the $10,000 annual gross receipts threshold, from such Vermont-based referral activities, is met.

The statute further clarifies that the presumption may be rebutted if the seller can demonstrate that the in-state referrer did not engage in any solicitation activity in Vermont that would satisfy the U.S. constitutional nexus standard (Quill/Wayfair standard). The burden of rebutting the presumption is on the remote seller.

There is no broader affiliate nexus provision in Vermont law beyond this click-through regime. The law is specific to arrangements involving commission-based referrals by Vermont residents.

Source support:

• The rule and dollar threshold are set under 32 V.S.A. § 9701(9)(I). The statutory language sets both the referral arrangement requirement and the $10,000 receipts threshold.
• The effective date and rebuttal provisions were set in the 2011 session (Act 45, § 36a) and became operational December 1, 2015, upon the Attorney General’s certification.

Source: 32 V.S.A. § 9701(9)(I)

Caution / review status: Not yet human confirmed. Statute is clear on click-through/affiliate referral standard and threshold, but does not address any broader affiliate nexus (ownership, control, or non-referral ties).

Vermont assesses statutory penalties and interest for late filing of sales and use tax returns, late payment of taxes, and failures to register as required by law. The main penalty and interest provisions are as follows:

Late filing penalty: If a taxpayer fails to file a required return by the due date, a penalty of 5% of the tax due is imposed for each month or fraction thereof that the return is overdue, up to a maximum of 25%. If the failure to file is found to be fraudulent, the penalty increases to 50% of the tax due. (32 V.S.A. § 3202(a)).

Late payment penalty: If the taxpayer files a return but fails to pay the assessed tax by the deadline, a penalty of 0.5% of the unpaid tax is imposed for each month or fraction thereof the tax remains unpaid, up to a maximum of 25%. (32 V.S.A. § 3202(b)).

Interest: Interest accrues on any unpaid sales and use tax from the original due date until paid. The annual interest rate is set by the Commissioner of Taxes and published yearly, pursuant to 32 V.S.A. § 3108. For the current rate, see annual Department of Taxes notices or official publications. (32 V.S.A. § 3202(e); 32 V.S.A. § 3108).

Failure to register penalty: A person required to register who knowingly fails to do so is guilty of a misdemeanor and subject to a fine of not more than $500. All collected tax, penalties, and interest remain due regardless of registration status. (32 V.S.A. § 9776).

Abatement: The Commissioner has discretion to abate penalties or interest for reasonable cause under 32 V.S.A. § 3203, but such relief is not automatic.

Source: 32 V.S.A. § 3202 Source: 32 V.S.A. § 3108 Source: 32 V.S.A. § 9776

Vermont authorizes municipalities to impose a 1% Local Option Tax (LOT) atop the state sales, meals/alcohol, or rooms tax under 24 V.S.A. § 138. Municipalities must adopt a LOT by local vote and notify the Department of Taxes at least 90 days before the effective date (the next calendar quarter). The State of Vermont administers and collects the LOT on the municipality's behalf under § 138(c).

Revenue Sharing Update (Effective October 1, 2025): As amended by Act 57 of 2024, effective October 1, 2025, the LOT revenue distribution changes: municipalities will receive 75% of revenue and the State will retain 25% for deposit into the PILOT Special Fund, superseding the previous 70/30 split. This apportionment applies to all local option tax returns filed on or after the effective date.

Destination Sourcing: LOT is destination-based. A sale is subject to the LOT if the customer takes possession or delivery in a LOT municipality—regardless of the seller's business location. If delivery occurs outside a LOT municipality, the local tax does not apply. This regime is confirmed by Technical Bulletin TB-37, which provides detailed and practical examples for both remote and in-state sales. Practitioners should consult the Department's official municipality list and lookup tools to ensure proper assignment, as municipal boundaries do not necessarily match ZIP code areas.

Tracked Vehicle Cap (June 17, 2024 revision): For sales of tracked vehicles (e.g., snowmobiles, bulldozers, construction equipment) in LOT municipalities, the 1% local tax applies only to the first $28,500 of the sales price, meaning the local option tax is capped at $285 per vehicle. The statewide sales tax on such vehicles is separately capped at $1,710 as of the June 17, 2024 revision of TB-52, so the combined state and local capped tax is $1,995. Any amount above those caps is not subject to further LOT or state sales tax, but full tax would still be due on the capped portion if the sale is otherwise taxable. Details are set out in TB-52 and the SUT-451 filing instructions (see Line 2 for "nontaxable sales").

Reporting and Filing: Sellers report and remit both state sales tax and LOT using Form SUT-451, Part II. LOT municipalities are pre-listed on the form, and additional participating municipalities can be written in manually. Vendors apply the 1% rate to taxable sales in each LOT location and remit the amount with their regular sales and use return.

Source: 24 V.S.A. § 138 Source: TB-37 Source: SUT-451 Instructions Source: TB-52, revised June 17, 2024 Source: LFO Fast Facts – Local Option Tax

Vermont has periodically adjusted its statewide sales and use tax rates since the tax was first enacted in 1969. Understanding past rates and their effective dates is critical for audit defense, refund claims, and transaction diligence concerning historic sales periods. Vermont's Department of Taxes and the Legislative Joint Fiscal Office have published rate histories in official state fiscal summaries.

Key Vermont sales and use tax statewide rate changes:

• 1969 — Sales and use tax first enacted at 3% statewide rate, effective June 1, 1969, on sales of tangible personal property and certain services. (Enabling Act 1969, No. 144, Adj. Sess.)
• 1982 — Rate increased to 4% (Act 187, 1981 Adj. Sess., effective April 1, 1982).
• 1991 — Temporary increase to 5% enacted, effective July 1, 1991, originally set to sunset June 30, 1993.
• 1993–1997 — The 5% rate was extended repeatedly by subsequent legislative acts (Acts 41 of 1993, 49 of 1995, 70 of 1996), never returning to 4%.
• 1997 — Sunset provisions repealed; the 5% rate became permanent July 1, 1997, with local option sales tax authority introduced for municipalities to add up to 1%. (Act 60, Sec. 95, 1997 Adj. Sess.)
• 2003 — Statewide rate increased to 6% effective October 1, 2003 (Act 68, Sec. 41, 2003). This remains the base state rate as of 2026.

Summary Table: | Period | State Rate | |-------------------------------|------------| | 06/01/1969 – 03/31/1982 | 3% | | 04/01/1982 – 06/30/1991 | 4% | | 07/01/1991 – 06/30/2003 | 5% | | 10/01/2003 – present | 6% |

Notes: This timeline includes only Vermont's statewide rate and major enabling acts. Local option sales taxes, authorized for municipalities starting in 1997, are not reflected in these statewide rate changes. Additional minor rate changes, base broadening, and exemptions (clothing, recycling, etc.) are found in session laws. For local option rate changes, refer to Vermont Department of Taxes resources and municipality notifications.

Source: Vermont Legislative Joint Fiscal Office, 2026 Fiscal Facts — Revenue History, p.18

Not yet human confirmed. Legislative JFO summary matches statutory history, but for transaction-period research, practitioners should always confirm precise session law dates if a specific cutoff is at issue.