Vermont: Sales Tax Handbook
What constitutes sales tax nexus in Vermont?
One of the more complicated aspects of Vermont sales tax law is sales tax nexus, the determination of whether a particular sale took place within the taxation jurisdiction of Vermont, and is thus subject to state (and possibly local) sales taxes.
If a vendor's transactions are determined to have nexus in Vermont, the vendor must register for a Vermont sales tax license and collect appropriate sales taxes from the buyer for all transactions with nexus in the state. On this page, we have compiled some of the most commonly needed facts about what constitutes sales tax nexus in Vermont.
Sales Tax Nexus in Vermont
According to the law of Vermont, all retailers who have tax nexus, or "vendors" can be defined in several ways. A vendor is considered to have tax nexus if they have any of the following within the state's boundaries:
Soliciting sales of tangible, physical, property through the use of any sort of advertisement, employee, independent contractor, or any other representative, or maintains a place of business like an office, warehouse, distribution center or any other type of place like this.
For additional details on sales tax nexus law in Vermont, see the nexus information page from the Department of Taxes at http://www.salestaxsupport.com/sales-tax-information/sales-tax-by-state/overview-and-nexus/vermont/
Taxation of Internet-Based Sales in Vermont
NOTE: 2018 Supreme Court Ruling Regarding Online Sales Taxes
In the 2018 Supreme Court case South Dakota vs. Wayfair Inc, Et Al., the court overturned a previous ruling that required a merchant to have physical nexus in order for a state to collect sales tax. This means that any state is now free to enforce collection of sales taxes on out-of-state online merchants. The information provided here may be subject to change, and many states are expected to begin collecting online sales taxes following this ruling.
Depending on the situation, Vermont may or may not charge sales tax on Internet-based transactions. Vermont's statute does indicate that it is possible for tax nexus to exist. However, in the case Quill Corp. v. North Dakota, the U.S. Supreme Court declared that due to the Commerce Clause, a seller must have a physical presence in the state for the state to legally require the seller to collect sales tax. In addition, Vermont has indeed enabled a click-through nexus provision, although it is not in affect at this point in time.
The nexus status and taxability of Internet-based sales, by vendors and/or consumers within Vermont, have been the subject of hot debate in recent years. You can learn more on our introduction to Internet-based sales taxes.
Does my business have tax nexus in Vermont?
The folks at the sales tax compliance company Avalara are an approved Vermont sales tax partner, and you can use their free Vermont nexus wizard tool to determine whether or not your business has nexus, and is therefore required to pay Vermont sales taxes. If you're interested in automating your sales tax collection and filing process, click here to get more information.
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