Most businesses starting in Vermont selling a product or offering certain services will need to register for a sales tax permit, also referred to as a seller’s permit, sales tax license, sales tax number, or sales tax registration.
The sales tax permit is obtained through the Vermont Department of Taxes when applying for a Vermont Business Tax Account. In addition to registering for a sales tax permit, you can also register for meals and rooms tax and the employer withholding tax.
Check out the rest of this guide to determine who needs a sales tax permit, what products and services are taxable, how to register for a permit, and reporting requirements.
Related: Vermont Startup Checklist
Who needs a sales tax permit in Vermont?
A business must register for a sales tax permit in the state of Vermont when:
- A business has an “economic nexus” (physical presence in the state) when it has a physical location, such as a retail store or office, or uses a warehouse or fulfillment center to store inventory.
- Selling products and taxable services in Vermont (includes occasionally selling items at craft shows, fairs, seminars, shows, etc.)
- The business has employees working in Vermont.
- An online vendor located in Vermont is selling taxable products to Vermont residents.
- A remote seller makes total annual sales of tangible personal property of $100,000 or more or ships 200 or more transactions to Vermont residents annually.
What products and services are taxable in Vermont?
Physical products
There are a few exceptions, but almost all physical products are taxable when sold at retail in Vermont. Common examples include:
- General merchandise like furniture, appliances, and clothing
- Titled or registered items like vehicles
Certain agricultural manufacturing equipment, machinery used in forestry, and some clothing are tax-exempt in Vermont.
In Vermont, labor costs are generally not taxable, but this can vary based on the situation. For example, imagine you own an auto body shop; sales tax would apply to the paint and materials used for the job but not to the labor to paint your car.
Digital Products
Digital products are taxable in Vermont.
Services
Most services aren’t taxable in Vermont; however, there are a few exceptions, some of which include:
- Short-term lodging
- Admissions to places of amusement (fitness club memberships, movie theaters, golf courses, ski areas, etc.)
- Fabrication charges are defined as any charges for producing fabricating, printing or imprinting property for customers who furnish the materials used in the product. Examples include job printing, engraving (jewelers included), taxidermy, etc.
How to register for a Vermont sales tax permit
You can obtain a sales tax permit by registering through the Online Business Service Center or mailing the BR-400 Form.
Information needed to register includes:
- Type of business entity – sole proprietorship, partnership, corporation, or Limited Liability Company (LLC)
- Federal Employer Identification Number (FEIN) from the IRS, or SSN if a sole proprietorship with no employees
- Business name
- Assumed Business Name / DBA name (if applicable)
- North American Industry Classification System (NAICS) code
- Business mailing address, physical address, phone number, and email address.
- Name, SSN, title, and address of owners/officers/members
- Expected start date
- Estimated quarterly tax liability
Sales tax reporting
How is sales tax collected?
When a business sells a taxable product or service, it charges the appropriate sales tax rate to the customer. The business collects this tax, which it then sends to the Vermont Department of Taxes.
How much is sales tax in Vermont?
If the purchase is made at a store or in a mobile location, the sales tax rate varies depending on where the sale took place in Vermont. In addition to the statewide sales tax, municipalities may add additional sales taxes. When shipping in-state, the sales tax is based on the purchaser’s address.
To find sales tax rates throughout the state, the Vermont Department of Taxes has more information about sales tax rates.
When are Vermont sales tax returns due?
The Department of Taxes will determine a filing frequency based on the expected sales volume, which will be monthly, quarterly, or annually. Generally, a business collecting over $2,500 in sales taxes annually will file monthly.
The due date for filings is the 25th day of the month following the reporting period unless the 25th falls on a weekend or federal holiday, which would move to the next business day.
A filing indicating no sales is still required even if the business had no sales during the reporting period.
Vermont Sales Tax Permit FAQs
How much does a Vermont sales tax permit cost?
There is no fee to get a sales tax permit in Vermont.
How long does it take to get a sales tax permit?
Expect 3-5 business days to receive a sales tax permit when registering online or 2-3 weeks when applying by mail.
Do you have to renew your Vermont sales tax permit?
The sales tax permit is a one-time registration, and no renewals are needed. However, if any information about the business changes, such as the mailing address, additional locations, or change in ownership, it must be updated with the Department of Taxes.
Is a business license the same thing as a sales tax license?
No – A business license and a sales tax permit are different. Here’s how they differ:
A business license gives you the right to operate your business in a specific area, while a sales tax permit allows you to collect sales tax from your customers on behalf of the state.
In many cases, a business will need both.
How to Get a Vermont Sales Tax Exemption Certificate
A business can purchase items to resell without paying state sales tax. The tax liability is passed from the wholesaler or distributor to the retailer, who will then charge sales tax to the end-user of the item.
Wholesalers and distributors will require a sales tax number and a completed Vermont Certificate of Exemption (also referred to as a resale certificate or sales tax exemption certificate) to document that the purchased items are for resale.
If you have questions about the sales tax permit, the Vermont Department of Taxes has a sales and use tax FAQ page. You can also contact them at 802-828-2551, option 3, or email tax.business@vermont.gov.
