Vermont Sales Tax on Services, Installation, etc Vermont: Sales Tax Handbook

Vermont:

What purchases are taxable in Vermont?

The taxability of various transactions (like services and shipping) can vary from state to state, as do policies on subjects such as whether excise taxes or installation fees included in the purchase price are also subject sales tax. This reference is here to help answer your questions about what is and is not subject to the Vermont sales tax.

Section 1: Taxability of Goods and Services

What transactions are generally subject to sales tax in Vermont?

In the state of Vermont, sales tax is legally required to be collected from all tangible, physical products being sold to a consumer. An example of items that are exempt from Vermont sales tax are items specifically purchased for resale.

This means that an individual in the state of Vermont purchases school supplies and books for their children would be required to pay sales tax, but an individual who purchases school supplies for resale may not be required to charge sales tax.


Are services subject to sales tax in Vermont?

The state of Vermont does not usually collect sales taxes on the vast majority of services performed. However, there are some services which are taxed, for example telecommunication services, or public utility services involving electricity and gas.

This means that a web designer would not be required to collect sales tax, while a company which performs telecommunication services might be required to collect sales tax.

You can find a table describing the taxability of common types of services later on this page.

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Are shipping & handling subject to sales tax in Vermont?

In the state of Vermont, the laws regarding tax on shipping and handling costs are extremely simple. Every shipping cost is taxed, regardless of whether or not it is stated separately on the invoice or not.

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Are drop shipments subject to sales tax in Vermont?

"Drop shipping" refers to the common business practice in which a vendor, often in a different state, makes a sale of a product which is shipped to the end-user by a third party supplier hired by the initial vendor. In Vermont, drop shipments are generally subject to state sales taxes.

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Section 2: Taxability of Various Items in Vermont

This table shows the taxability of various goods and services in Vermont. If you are interested in the sales tax on vehicle sales, see the car sales tax page instead. Scroll to view the full table, and click any category for more details.

Category Exemption Status
Amazon Purchases
Products on Amazon.com EXEMPT
Clothing
General Clothing EXEMPT *
Food and Meals
Catering TAXABLE *
Grocery Food EXEMPT
Leases and Rentals
Motor Vehicles EXEMPT *
Tangible Media Property TAXABLE *
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
Periodicals TAXABLE
Occasional Sales
General Occasional Sales EXEMPT
Motor Vehicles EXEMPT *
Optional Maintenance Contracts
General Optional Maintenance Contracts EXEMPT *
Parts Purchased for Use in Performing Service Under Optional Maintenance Contracts TAXABLE
Pollution Control Equipment
General Pollution Control Equipment EXEMPT
Services
Janitorial Services EXEMPT
Transportation Services EXEMPT
Software and Digital Products
Canned Software - Delivered on Tangible Media TAXABLE
Canned Software - Downloaded TAXABLE
Custom Software - Delivered on Tangible Media EXEMPT *
Custom Software - Downloaded EXEMPT
Customization of Canned Software EXEMPT
Digital Products TAXABLE
Trade-Ins
General Trade-Ins EXEMPT
Vending Machine Sales
Food TAXABLE *
Merchandise TAXABLE

* See notes in category taxability page for details



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Source: http://www.salestaxhandbook.com/vermont/sales-tax-taxability