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Vermont Taxes Soft Drinks, July 2015


 No matter how you ask for it, you'll pay sales tax on it in Vermont.

The ideological rift between New Hampshire and Vermont is well known. In conversation, Vermonters reference geological differences between the two states, as if that explains it. New Hampshirites look at people wearing tie-die and long, flowery skirts and remark, “Must be from Vermont.” Is it all in good fun? You decide.

All else aside, a major point of contention is sales tax. New Hampshire has no retail sales tax; Vermont has a state rate of 6% and in some areas, local taxes raise the rate to 7%. Liquor stores populate the east side of the Connecticut River, which functions as a natural state border. In Vermont, liquor is taxed at $7.68 per gallon, while people travel from all over New England—including Vermont—to purchase alcohol practically tax-free in New Hampshire. Will they now make the trek for soda, too?

Effective July 1, 2015, Vermont is imposing its 6% sales and use tax on soft drinks, defined as “beverages that contain natural or artificial sweeteners.”

Soft drinks are not:

  • Beverages that contain milk or milk products, soy, rice, or similar milk substitutes
  • Beverages that contain greater than 50% of vegetable or fruit juice by volume

Beverage powders and concentrates are exempt, but both alcoholic and nonalcoholic beer are subject to Vermont sales tax.

Soft drinks purchased through the Vermont Supplemental Nutrition Assistance Program (SNAP) are exempt. Those purchased from vending machines are subject to the Vermont Meals and Room Tax, not the sales tax.

Keep your reading glasses handy

When in doubt, the Vermont Department of Taxes suggests you read the product label. The department has published general guidelines to determine whether or not a beverage is taxable. Read it here.

The best way to stay on top of sales tax changes in Vermont and other states is to automate. Learn how it works.

Full disclosure: I grew up in New Hampshire and have been know to wear long, flowery skirts.


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.