Vermont Tax Nexus
Businesses with nexus in Vermont are required to register with the Vermont Department of Taxation and to charge, collect, and remit the appropriate tax.
Generally, a business has nexus in Vermont when it has a physical presence there, such as a retail store, warehouse, inventory, or the regular presence of traveling salespeople or representatives. However, out-of-state sellers can also establish nexus in the ways described below.
Vermont nexus for out-of-state sellers
Referrals, including online referrals, from in-state entities may establish nexus for out-of-state sellers. A remote vendor is presumed to have Vermont nexus if it has agreements with residents to refer customers that led to sales of more than $10,000 in the previous year.
An out-of-state business is also considered to be a vendor if it “engages in regular, systematic, or seasonal solicitation of sales of tangible personal property” in Vermont and has either:
- Made at least $100,000 in sales in Vermont during any preceding 12-month period
- Made at least 200 individual sales transactions during any preceding 12-month period
Although enacted in May 2016, the effective date for economic nexus is delayed. For the most recent information, see the Vermont Department of Taxes.
Use tax notification requirement
Noncollecting remote vendors are required to notify all Vermont customers that sales or use tax is owed on nonexempt purchases made by the purchaser from the noncollecting vendor, and that the state requires purchasers to pay the tax due.
In addition, by January 31 of each year, each noncollecting vendor is required to provide to Vermont purchasers who made at least $500 in taxable purchases from the vendor in the previous calendar year the total amount paid by the purchaser for Vermont purchases made from the vendor. This notification must also state that the state requires a sales or use tax return to be filed and sales or use tax paid on nonexempt purchases made by the purchaser from the vendor.
Vendors who don’t collect and remit Vermont tax and who fail to provide the required notices will be fined.
Although enacted in May 2016, the effective date for the use tax notification requirement is delayed. For the most recent information, see the Vermont Department of Taxes.