Vermont Sales Tax Exemptions / Tax Free Items Vermont: Sales Tax Handbook

Vermont:

What purchases are exempt from the Vermont sales tax?

While the Vermont sales tax of 6.00% applies to most transactions, there are certain items that may be exempt from taxation. This page discusses various sales tax exemptions in Vermont.

Sales Tax Exemptions in Vermont

In Vermont, certain items may be exempt from the sales tax to all consumers, not just tax-exempt purchasers.

An example of an item that is exempt from Vermont sales tax are items which were specifically purchased for resale.

Many states have special, lowered sales tax rates for certain types of staple goods - such as groceries, clothing and medicines. Restaurant meals may also have a special sales tax rate. Here are the special category rates for Vermont:


Clothing

  EXEMPT

Groceries

  EXEMPT

Prepared Food

  9%

Prescription Drugs

  EXEMPT

OTC Drugs

  EXEMPT

These categories may have some further qualifications before the special rate applies, such as a price cap on clothing items. Groceries are generally defined as "unprepared food", while pre-prepared food may be subject to the restaurant food tax rate.

Candy and soda may be included or excluded from any preferential tax rate depending on whether or not the state considers them to be a "grocery":


Is candy taxable in Vermont? Candy IS considered a grocery in Vermont
Is soda taxable in Vermont? Soda IS considered a grocery in Vermont

Are services, shipping, installation, etc taxable in Vermont?

The taxability of transactions involving services, shipping, and installation of tangible goods can be slightly complicated with various laws applying to slightly different situations. To learn more about how these transactions, and other more complicated situations, are subject to the Vermont sales tax see the Vermont sales taxability FAQ page.


Other tax-exempt items in Vermont

This table lists a number of additional categories of goods and services that are exempt from Vermont's sales tax. For a list that also shows taxable items, see the list of taxable and nontaxable items in Vermont.

Category Exemption Status
Amazon Purchases
Products on Amazon.com EXEMPT
Clothing
General Clothing EXEMPT *
Food and Meals
Grocery Food EXEMPT
Leases and Rentals
Motor Vehicles EXEMPT *
Manufacturing and Machinery
Machinery EXEMPT
Raw Materials EXEMPT
Utilities & Fuel EXEMPT
Medical Goods and Services
Medical Devices EXEMPT
Medical Services EXEMPT
Medicines EXEMPT
Newspapers and Magazines
Newspapers EXEMPT
Occasional Sales
General Occasional Sales EXEMPT
Motor Vehicles EXEMPT *
Optional Maintenance Contracts
General Optional Maintenance Contracts EXEMPT *
Pollution Control Equipment
General Pollution Control Equipment EXEMPT
Services
Janitorial Services EXEMPT
Transportation Services EXEMPT
Software and Digital Products
Custom Software - Delivered on Tangible Media EXEMPT *
Custom Software - Downloaded EXEMPT
Customization of Canned Software EXEMPT
Trade-Ins
General Trade-Ins EXEMPT

* See notes in category taxability page for details



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** This Document Provided By SalesTaxHandbook **
Source: http://www.salestaxhandbook.com/vermont/sales-tax-exemptions