Vermont considers retail delivery fee

The Vermont Legislature is considering a bill that would implement a retail delivery fee starting July 1, 2026. Whether the legislation will garner the support needed to become law remains to be seen: A similar retail delivery fee introduced in 2025 did not pass.

Key takeaways

• Vermont is looking to impose a 30-cent retail delivery fee on taxable tangible personal property delivered in the state. All retailers required to collect Vermont sales tax would be subject to the delivery fee.
• Only two other states have a retail delivery fee today: Colorado and Minnesota. About 12 states, including Vermont, considered but did not adopt retail delivery fees in 2025.
• The Vermont Department of Taxes would administer the fee, which would follow the same reporting schedule as sales tax. The department would also determine how to report the fee — on the regular sales tax return or via a different return.

Retail delivery fee proposal

House Bill 863 seeks to impose a 30-cent retail delivery fee on taxable tangible personal property sold at retail and delivered to a person in Vermont.

All vendors registered for Vermont sales tax that deliver taxable tangible personal property in the state would be subject to the delivery fee if the bill is enacted. H.863 doesn't provide an exclusion for vendors making less than a certain amount of sales in the state, as is the case with the retail delivery fees in Colorado and Minnesota.

Like in Colorado and Minnesota, however, the delivery fee would apply just once per retail transaction regardless of the number of items delivered or the number of shipments needed to deliver the goods.

Retailers would be allowed but not required to collect the fee from consumers, meaning they could absorb the cost of the fee rather than passing it on. If they opted to collect it from customers, they'd need to separately state the retail delivery fee on the invoice, statement, or similar documents, and charge it in addition to any other applicable delivery fees.

The fee would be nonrefundable if the delivery occurred and a customer later returned some or all items delivered. However, retailers would be required to refund the delivery fee for orders canceled prior to delivery.

Curbside pickup sales or other tangible personal property sold for pickup at the vendor's place of business would not be subject to the fee. The retail delivery fee also wouldn't apply to deliveries of electricity, water, gas, steam, and prewritten computer software, which Vermont considers tangible personal property.

How to report the delivery fee

Vendors would follow the same reporting schedule for the retail delivery fee as for sales tax. The Vermont Department of Taxes would administer the fee and establish the reporting requirements. Colorado uses a specific Retail Delivery Fee Return, but the Minnesota retail delivery fee is reported on the sales and use tax return.

Bottom line

Revenue generated from a Vermont retail delivery fee would be deposited into the Transportation Fund, which is suffering from declining gas tax revenues. Yet the future of this Vermont retail delivery fee is uncertain. Legislation proposing similar retail delivery fees for Vermont (H.426 and S.75) in 2025 didn't pass, and retail delivery fee initiatives in other states have faced pushback.

"If Vermont (or any state) moves forward with a retail delivery fee, the most important thing is to establish clear, practical rules," says Amanda Denniston, Government Relations Manager at Avalara. "There are lessons to take from the states that already administer these fees. Policymakers should spell out whether there's a small-seller exemption, exactly what transactions are in scope, how returns and cancellations are handled, and how the fee is reported and remitted. Those details will determine whether a retail delivery fee is a minor line item or a meaningful compliance project for retailers."

FAQ

What is Vermont's proposed retail delivery fee?

Vermont House Bill 863 would add a 30-cent retail delivery fee to taxable tangible personal property sold at retail and delivered to a person in Vermont. If enacted, the fee would apply once per retail transaction, regardless of the number of items or shipments involved.

When would the Vermont retail delivery fee take effect, and who would need to collect it?

Vermont's retail delivery fee would take effect on July 1, 2026, if the bill is enacted. There's no small-seller exemption so all retailers registered for Vermont sales tax would be responsible for reporting the fee. The legislation allows retailers to collect the fee from customers or pay the fee themselves. If the fee is passed on to customers, it must be separately stated on invoices or receipts.

How would retailers report and remit the Vermont retail delivery fee?

The Vermont Department of Taxes would administer the retail delivery fee if it's enacted. Retailers would follow the same filing frequency used for sales tax; it's not yet known whether the fee would be reported on the standard sales tax return or on a separate return. Revenue from the fee would be deposited into Vermont's Transportation Fund.

Are any other states considering a retail delivery fee for 2026?

Yes. Retail delivery fee legislation is currently under consideration in Hawaii, Nebraska, and New York.