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Vermont Businesses Invited to Audit Themselves

  • Sep 3, 2013 | Gail Cole

 Vermont's self audit program: know yourself, and what you owe.

If the prospect of being audited by a state department of revenue makes you tremble, perhaps you should consider opening up shop in Department of Taxes has announced its voluntary self-audit program, "Know What You Owe." Penalties and 50% of the interest due are waived for participating businesses who self-report (and pay) any tax due.

The program was created to help businesses better understand the Vermont sales and use tax and its meals and rooms taxes. The department recognizes that "business owners may be unaware of their use tax liabilities or may be unsure how to properly apply the tax." Use tax is owed on taxable purchases when sales tax wasn't paid. For example, a business owner who drives to tax-free New Hampshire to purchase office supplies would owe Vermont use tax on those purchases. Know What You Owe began August 1, 2013, and concludes May 1, 2014.

There are benefits for participating:

  • Structured audits (the kind that keep you up at night, even when all taxes have been properly filed and paid) will not be imposed on self-reporting businesses.
  • Any business that discovers a use tax liability during a self-audit will have its audit period limited to three years rather than "the possible seven years for these businesses which are not currently registered."
  • All penalties will be waived.
  • Self-auditing businesses must pay only "50% of the interest on use tax owed for the three years."

Participating businesses must pay any taxes owed, along with the 50% interest, within thirty days of entering the program. Extended payment plans may be possible, provided the Department of Taxation agrees.

Vermont businesses are invited to attend informational workshops on "Know What You Owe" at the Aldrich Library in Barre on September 17 and 19 (not the 18th).

The use tax trend

States are increasingly taking a more aggressive stance on use tax, which has been around almost as long as sales tax. The explosion of online retailers, such as Amazon, has made it easier for people and businesses to avoid paying sales tax. Less sales tax paid means less revenue for states. As a result, state departments of revenue are taking pains to educate taxpayers on use their tax liability.  Some states, such as Tennessee and South Carolina, even require Amazon to notify customers of their use tax liability.

How does your business manage sales and use tax?

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Vermont State Rates

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.