Vermont Sales Tax
Vermont Sales Tax At a Glance
State rate: 6%
Maximum combined rate: 7%
Sourcing: Destination
Tax Holidays: None
Governing Body: Vermont Department of Taxation
Whether your small business is based in Vermont or you simply make sales of tangible personal property to customers in the state regularly, it’s important for you to know what the state’s sales tax laws are and how they apply to you. This includes understanding the applicable tax rates at various locations throughout the state, knowing which rate applies to any given sale, and understanding the requirements for triggering a nexus condition in Vermont.
Vermont Sales Tax Rates
Vermont charges a flat statewide sales tax rate of 6.00% on retail sales of taxable physical goods, prewritten software, and select services.
Local municipalities have the authority to add a 1.00% Local Option Tax.
- Cities such as Burlington, South Burlington, Montpelier, Rutland, and Middlebury collect this local tax.
- Depending on where your buyer receives the item, the total combined tax rate is either 6.00% or 7.00%.
Tax Sourcing
Vermont uses destination-based sourcing for all shipped or delivered orders. That means if you ship a taxable product to a customer in Vermont, you charge the tax rate enforced at the customer’s delivery address, not your business location.
Vermont Nexus
Physical Nexus
You have a physical presence in Vermont—and must register to collect sales tax—if your business has any of the following in the state:
- A physical storefront, office, building, or warehouse.
- Employees, sales representatives, independent contractors, or agents working on your behalf.
- Owned inventory stored in a local storage facility or third-party fulfillment center.
Economic Nexus
Out-of-state remote sellers with no physical presence in Vermont trigger economic nexus if, during any preceding 12-month period, they reach either of the following thresholds:
- $100,000 in total gross sales delivered into Vermont, OR
- 200 separate individual transactions delivered into Vermont.
Once you pass either marker, you are required to register for a Vermont Business Tax Account and start collecting tax on taxable sales.
Marketplace Facilitators
Marketplace providers (like Amazon or eBay) that meet Vermont’s economic nexus threshold are required to collect and remit sales tax on all sales made through their platform on behalf of third-party sellers. If you sell through a marketplace, those sales still count toward your $100,000 or 200-transaction threshold to determine whether you need to register as a seller yourself.
What is Taxable in Vermont
Tangible Goods
Physical goods sold to customers in Vermont are subject to sales tax unless a specific state exemption applies.
Services
Most general services are not taxed in Vermont. However, specific categories—such as prepared meals, room rentals, admissions to entertainment events, and personal property repairs—are subject to tax.
Shipping and Handling
Delivery and shipping charges added by the seller are taxable if they are connected to a taxable item. If the product being shipped is exempt from tax, the shipping fee for that product is also exempt.
Digital Goods and Services
- Software as a Service (SaaS): Taxable. Software accessed remotely over the cloud (including SaaS) is subject to Vermont’s state sales tax (and local option tax where applicable).
- Digital Media: Downloadable digital books, digital audio (music and podcasts), and digital video/streaming purchases are taxable.
- Custom Software: Software created specifically for a single client remains exempt as long as it isn’t bundled with prewritten software.
Exemptions
- Clothing and Footwear: General everyday clothing, shoes, boots, jackets, and diapers are completely exempt from Vermont sales tax. (Specialized athletic safety gear and accessories like jewelry or handbags remain taxable).
- Groceries: Unprepared food items and grocery staples are exempt. Prepared restaurant food and hot meals are subject to Vermont’s separate Meals and Rooms Tax.
- Prescription Medicine & Medical Equipment: Prescription drugs, over-the-counter medicines, and qualifying medical supplies or equipment are exempt.
Vermont Sales Tax Holidays
Vermont does not hold an annual statewide sales tax holiday.
Registration and Filing
Before you begin making taxable sales in Vermont, you’ll have to register with the state for a permit to collect and remit sales tax. Registration is free, and it can be done online or by downloading a form from the state website and mailing it in.
Vermont is a full member of the Streamlined Sales and Use Tax Agreement (SSUTA), so you can register through that website as well. Registering with the SSUTA requires that you register with all member states simultaneously, and so this option may or may not make sense for you depending on your situation.
You are encouraged to file and pay online, although it’s still possible to complete this process through the mail. If your tax liability for the year is more than $100,000, though, you must file and pay online.
Filing Frequencies and Deadlines
The state will assign you a filing frequency based on your estimated annual tax liability. Typically, if your annual liability is less than $500, you will file quarterly, and if your liability is anticipated to be greater than that, you will file monthly. For those with very small annual tax liability, there is also an annual filing option.
Returns and payments are due on the 25th of the month following the close of the period in question. The one exception is that monthly returns for January sales filed in February are due on the 23rd. Returns for annual filers are due on January 25th of the following year. If the due date falls on a weekend or a holiday, returns and payments are due by the next business day.
Monthly Due Dates
| Period | Due Date |
|---|---|
| January | February 23 |
| February | March 25 |
| March | April 25 |
| April | May 25 |
| May | June 25 |
| June | July 25 |
| July | August 25 |
| August | September 25 |
| September | October 25 |
| October | November 25 |
| November | December 25 |
| December | January 25 |
Quarterly Due Dates
| Period | Due Date |
|---|---|
| January – March (Q1) | April 25 |
| April – June (Q2) | July 25 |
| July – September (Q3) | October 25 |
| October – December (Q4) | January 25 |
Penalties and Interest
A penalty of 5% of the total tax due will be assessed per month for any late payments. A 5% per month penalty will also be charged for a failure to file a tax return, with a maximum possible penalty of 25% of the total tax due.
Resources
Vermont Sales Tax Software
Although the regulations surrounding what’s taxable in Vermont are relatively straightforward, it can still be difficult to stay on top of all aspects of recording, collecting, filing and remitting taxes on your qualifying sales to Vermont customers. That’s especially true if you’re selling in multiple states at once. Fortunately, the tax calculator and tools provided by TaxTools software can make this entire process much easier and more efficient for you.
TaxTools will monitor the regulations in each state for you, making sure you’re up to date on any changes that may impact your small business. It can also produce various reports, file your tax returns for you, and ensure you’re collecting at the right rate on each sale. It will integrate smoothly with whatever eCommerce platform you use, and best of all, it gives you peace of mind that you’re in tax compliance with all state sales tax regulations, so you’re free to focus on building your business.
So if you’re ready to learn more about how TaxTools can help streamline your business operations, click here to sign up for a free trial today.
Last updated July 2026