From the Vermont Department of Taxes: Beginning July 1, 2017, specific types of machinery, equipment, and repair parts traditionally used in forestry are now exempt from sales tax at the time of purchase. Secs. 17-18 of Act 75 and Secs. 9-10 of Act 77.
The exemption for machinery and equipment is a product-based exemption. That means the purchase of those specific types of machinery and equipment do not require an exemption certificate at the time of purchase. Retailers might find it useful to have an exemption certificate filled out for their records, so we have included a spot for that on the S-3W. The following items are specifically listed in statute and are exempt from sales and use tax beginning July 1, 2017:
• Skidders with grapple and cable
• Feller bunchers
• Cut-to-length processors
• Loader slashers
• Log loaders
• Whole-tree chippers
• Stationary screening systems
• Firewood processors, elevators, and screens
Additionally, repair parts used in these pieces of machinery and equipment are exempt from sales tax as well. Since many of the parts can be used on both taxable and exempt purchases, sellers will need to require a completed S-3W: Vermont Sales Tax Exemption Certificate for Forestry and Wood Products Machinery, Equipment, and Repair Parts. This is a new form we have created for administering this exemption.
The Department of Taxes has created a webpage with FAQs for help in implementing this new exemption. We will update this as we hear additional questions. Additionally, here is a link to the fact sheet and the S-3W.
For more information please click here.