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Vermont Soda Tax: Puzzlement Persists

  • Sep 15, 2015 | Gail Cole

 There are so many products to tax (or not) in the soda aisle.

Sales tax laws are notoriously complex. Food sales tax laws are even more so. Yet Vermont’s new tax on sweetened beverages might just take the cake.

Retailers and consumers in Vermont have been struggling for months to make sense of the new policy, which applies sales tax to many unexpected beverages and exempts many beverages one would think taxable. For example, while regular V-8 is exempt, V-8 Splash and V-8 Fusion are taxable. Most iced teas are taxable, but Starbucks Bottled Frappuccino ® is exempt. And so forth.

Small businesses (of which there are many in Vermont) are having a harder time implementing the new tax than large competitors with sophisticated point of sale systems. So in many cases, consumers are educating retailers on the taxability of their favored drinks. Sam Frank of Orange, who drinks a lot of seltzer, has had to tell at least one retailer that black cherry Schweppes seltzer is exempt.

The Vermont Department of Taxes is working hard to help retailers make sense of the new law. Whenever consumers notify the department of a misapplied tax, the department follows up with the business. Read more about this soda tax snafu.

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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.