The 2016 Vermont State Sales Tax
What is the 2016 Vermont Sales Tax Rate?
The Vermont state sales tax rate is 6%, and the average VT sales tax after local surtaxes is 6.14%.
- Groceries, clothing, prescription drugs and non-prescription drugs are exempt from the Vermont sales tax
- Counties and cities can charge an additional local sales tax of up to 1%, for a maximum possible combined sales tax of 7%
- Vermont has 19 special sales tax jurisdictions with local sales taxes in addition to the state sales tax
- Vermont has a higher state sales tax than 65.4% of states
Counties and cities in Vermont are allowed to charge an additional local sales tax on top of the Vermont state sales tax, with 10 cities charging the additional 1% local sales tax.
Restaurants are charged at a 9% sales tax rate (plus a 1% local sales tax in certain cities), and all alcoholic beverages have a 10% sales tax rate (plus a 1% local sales tax in certain cities). The purchase of any motor vehicle is subject to the standard state sales tax of 6%, and short-term car rentals are taxed at 9%. Additional excise taxes apply to purchases of gasoline, cigarettes, and other goods.
If you are a Vermont business owner, you can learn more about how to collect and file your Vermont sales tax return at the 2016 Vermont Sales Tax Handbook .
Vermont Sales Tax Exemptions
Vermont doesn't collect sales tax on purchases of most clothing, groceries, prescription drugs and non-prescription drugs. Prepared Food is subject to special sales tax rates under Vermont law. In most states, necessities such as groceries, clothes, and drugs are exempted from the sales tax or charged at a lower sales tax rate.
Some items may not be eligible for these reduced sales tax rates, such as expensive clothing, unhealthy food or drinks like soda, and certain non-essential pharmaceuticals. Unlike many states, Vermont treats both candy and soda as groceries for sales tax purposes. Other items including gasoline, alcohol, and cigarettes are subject to various Vermont excise taxes in addition to the sales tax.
In some states, items like alcohol and prepared food (including restaurant meals and some premade supermarket items) are charged at a higher sales tax rate. Prepared Food is subject to a higher state sales tax then other items. The VT sales tax applicable to the sale of cars, boats, and real estate sales may also vary by jurisdiction. Vermont's sales tax rates for commonly exempted items are as follows:
$100 Restaurant Dinner
$100 of groceries
$100 in clothes
$100 of consumer products
$9.00 sales tax
$0.00 sales tax
$0.00 sales tax
$6.00 sales tax
Vermont Sales Tax Exemption Certificate
Unlike a Value Added Tax (VAT), the Vermont sales tax only applies to end consumers of the product. Individuals and companies who are purchasing goods for resale, improvement, or as raw materials can use a Vermont Sales Tax Exemption Form to buy these goods tax-free.
Companies or individuals who wish to make a qualifying purchase tax-free must have a Vermont state sales tax exemption certificate, which can be obtained from the Vermont Department of Taxes . On making an exempt purchase, Exemption Certificate holders may submit a completed Vermont Sales Tax Exemption Form to the vendor instead of paying sales tax.
Sales tax exemption forms (as well as business sales tax id applications, sales tax returns, and the full Vermont sales tax code) can be downloaded from the Vermont Department of Taxes here .
Vermont Sales Tax Calculator
Whenever you make a purchase at a licensed Vermont retailer, your sales tax will be automatically calculated and added to your bill. To lookup the sales tax due on any purchase, use our Vermont sales tax calculator.
Vermont Use Tax
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If you buy goods and are not charged the Vermont Sales Tax by the retailer, such as with online and out-of-state purchases, you are supposed to pay the 6% sales tax (less any foreign sales tax paid) for these items yourself as the Vermont Use Tax.
Your are expected to voluntarily list your liable purchases on a Vermont Use Tax Return, which should be attached with payment to your Vermont Income Tax Return. Historically, compliance rates with with the Vermont Use Tax have been low.
Vermont Local Sales Taxes
Vermont does not allow local jurisdictions like cities or counties to collect a local sales tax. The Vermont state sales tax of 6% is applicable statewide. You can view the sales tax rates for various cities in Vermont here.
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