Sales tax is confusing enough as it is. To make things worse, though, each state is remarkably different from the others. Every state has its own rules, regulations, and other mess to sort through. To help you out, we’re going through each state and digging up the rules and regulations you need to know. Today we’re covering Vermont!
You’re a merchant living anywhere but Vermont
Is your business located in another state entirely and you sold an item to someone living in Vermont? No worries – you do not need to collect sales tax from buyers in Vermont. Live long and prosper.
You live and/or operate your business in Vermont
If your business is physically located in Vermont or you otherwise have sales tax nexus in the state, then you must worry about collecting sales tax. Vermont is a destination-based state so your primary concern is where the customer is located.
For example, let’s say your business is located in Rutland. You get an order from a customer in Middlebury. The sales tax percentage you collect is the Middlebury rate, not the Rutland rate, because that’s where your customer is located.
The statewide rate for Vermont is 6%. However, local rates can bring it up another 1%. See this local tax rate table for counties that add the 1%.
You live out-of-state but have nexus in Vermont
In this scenario your business is out of state but you have some sort of nexus – or presence – in the state of Vermont. Perhaps you use a 3rd party fulfillment service or have a roaming salesperson in the state. Whatever the case may be, you must now worry about sales tax in Vermont.
It’s the same deal as mentioned above. Your primary concern is where the customer exists rather than your business or anything else. If they live in Middlebury, you collect that rate.
The state rate is 6%, although many counties add on a 1% additional tax.
What all constitutes sales tax nexus in Vermont? From the Vermont Statutes website:
Filing sales tax in Vermont
Vermont has specific amounts of sales tax a business must earn to pay either monthly, quarterly, or annually. They are:
$500 or less: Due annually January 25th
$501-$2,500: Due quarterly the 25th of the month following the end of the quarter
$2,501+: Due monthly the 25th of the following month
Before taking sales tax from customers you must first register your business. You do so with Form S-1.
If you need to file a sales tax return in Vermont, TaxJar has your back. You can now enroll in AutoFile for the state of Vermont and we’ll automatically file your sales tax return for you! Find out more about Autofile here.
Sales tax on shipping
In Vermont all shipping costs are taxable whether they are stated separately or not.
Summary: Vermont has specific rules but is otherwise straightforward
The main thing that stands out about Vermont is how strict it is about how often sellers remit their sales tax returns. If you make below $500, you file annually. If you’re between $501 and $2,500, you file quarterly. If you collect $2,501 and above, you file monthly.
Otherwise, Vermont is pretty straightforward as a destination based state. You only need to worry about where your customer lives rather than where your business exists. The statewide rate is 6% but many counties add a 1% sales tax on top of it. Make sure to register your business before you ever start collecting and you should be good to go.