Vermont Sales Tax Guide
SALES TAX RATE:
6.00%
MAXIMUM LOCAL & COUNTY RATES:
1.00%
Read this Guide
This guide simplifies compliance with Vermont's sales tax code by breaking down the process into four easy steps:
Use a Professional Sales Tax Service:
One such reliable service:
TaxJarhelps entrepreneurs with ecommerce sites calculate sales tax at checkout ($17/month)
Which Goods and Services are Taxable?
Determining whether or not the products or services your company sells are taxable in Vermont is the first step in sales tax compliance.
Traditional Goods or Services
Goods that are subject to sales tax in Vermont include physical property, like furniture, home appliances, and motor vehicles.
The purchase of both prescription and non-prescription medicine, groceries, gasoline and clothing aretax-exempt.
Digital Goods or Services
A digital good or service is anything electronically delivered, such as an album downloaded from iTunes or a film purchased from Amazon.
Vermontdoes notrequire businesses to collect sales tax on the sale of digital goods or services.
However, Vermont has one exception to this policy. Businesses must collect sales tax on pre-written computer software that is sold online.
How to Register for Vermont Sales Tax
If you determined that you need to charge sales tax on some or all of the goods and services your business sells, your next step is to register for aseller's permit.This allows your business to collect sales tax on behalf of your local and state governments.
In order to register, you will need the following information:
- Federal EIN Number
- North American Industrial Classification System (NAICS) code required for all businesses. You can do aNAICS Code Lookupand find theNAICS Code for LLCthat matches your industry.
- Business Details
- Owner Details
- Estimated Tax Liabilities
Register for a Seller’s Permit
Register for a Sellers Permit online through the Vermont Department of Taxes website
Fee:None
Expiration:None
Save Money with a Resale Certificate
With aresale certificate, also known as a reseller's permit, your business does not have to pay sales tax when purchasing goods for resale.
Download Resale Certificate
Download the Resale Certificate through the Vermont Department of Taxes
Instruction:Present the certificate to the seller at the time of purchase.
Collecting Sales Tax
After getting your seller's permit and launching your business, you will need to determine how much sales tax you need to charge different customers. To avoid fines and the risk of costly audits, it's important for business owners to collect the correct rate of sales tax.
When calculating sales tax, you'll need to consider the following kinds of sales:
- Store Sales
- Shipping In-State
- Out-of-State Sales
Recommended:Use ourSales Tax Calculatorto look up the sales tax rate for any Zip Code in the US.
Store Sales
For traditional business owners selling goods or services on site, calculating sales tax is easy: all sales are taxed at the rate based on the location of the store.
Here's an example of what this scenario looks like:
Mary owns and manages a bookstore in South Burlington, Vermont. Since books are taxable in the state of Vermont, Mary charges her customers a flat-rate sales tax of 7.000% on all sales. This includes Vermont’s state sales tax rate of 6.000%, and South Burlington’s sales tax rate of 1.000%.
In-State Sales
The state of Vermont follows what is known as adestination-basedsales tax policy. This means that long-distance sales within Vermont are taxed according to the address of the buyer. This policy applies to state, county, and city sales taxes.
Consider the following example:
Steve runs his own business selling electronics on eBay out of his home in Montpelier, Vermont. A customer living in Brattleboro finds Steve’s eBay page and purchases a $350 pair of headphones. When calculating the sales tax for this purchase, Steve applies only the 6.000% state tax rate for Vermont. The total cost is $371.00 ($21.00 sales tax).
Out-of-State Sales
Vermont businesses only need to pay sales tax on out-of-state sales if they havenexusin other states.Nexusmeans that the business has a physical presence in another state.
Common types ofnexusinclude:
- Aphysical location,如办公室、商店或warehouse
- Anemployee远程工作或旅行销售代表是谁resentative
- Amarketing affiliate
- Drop-shippingfrom a third party seller.
- Atemporary physical location,including festival and fair booths.
File Your Sales Tax Return
Now that you’ve registered for your Vermont seller's permit and know how to charge the right amount of sales tax to all of your customers, you are all set to file your sales tax return. Just be sure to keep up with all filing deadlines to avoid penalties and fines.
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How to File
Vermont requires businesses to file sales tax returns and submit sales tax payments online.
File the Vermont Tax Return
How Often Should You File?
How often you need to file depends upon the total amount of sales tax your business collects.
- Quarterly filing:If your business collects $500.00 or less in sales tax per year then your business should elect to file returns on a quarterly basis.
- Monthly filing:If your business collects more than $500.00 in sales tax per year then your business should file returns on a monthly basis.
Note:Vermontrequiresyou to file a sales tax return even if you have no sales tax to report.
Filing Deadlines
All Vermont sales tax return deadlines fall on the25th day of the month, unless it is a weekend or federal holiday, in which case the deadline is moved back to the next business day.
For a complete list of deadlines, check out the2023 Tax Filing Calendarthrough the Vermont Department of Taxes.
Quarterly filing:
- Q1 (Jan. - Mar.):Due April 25
- Q2 (April - June):DueJuly 25
- Q3 (July - Sept.):DueOctober 25
- Q4 (Oct. - Dec.):DueJanuary 25
Monthly filing:The25thof the following month, or the next business day, e.g.April 25for the month of March, orMay 25for the month of April.
Penalties for Late Filing
Vermont charges alate filing penaltyof 5.000% per month up to a maximum of 25% of the tax that is reported on the tax return. Returns that are filed more than 60 days after the original due date face an additional $50.00 late filing penalty.
Vermont Helpful Resources
Vermont Department of Taxes Sales and Use Tax
Business Customer Service Number:
1 - 804 - 367 - 8037
Next Steps
Look up sales tax rates using ourSales Tax Calculator.
Check out our guide,Accounting for Small Businesses, or jump toaccounting software reviews.
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