Vermont Use Tax: What is Taxable?

Because Vermont sales tax and use tax work together, it is important to know when sales tax should be applied.

Some transactions subject to tax are:

• Purchase of tangible personal property
• Internet purchases
• Digital downloads and prewritten software
• Delivery charges, even if stated separately on invoice.

Note: Use tax is only due when sales tax would normally be due, but there is a difference between the Vermont rate and the amount actually paid. Therefore, there is no use tax due on purchases that are excluded from sales tax such as food and medical supplies.

The following white paper outlines general guidelines for the application of use tax in the state of Vermont: http://www.dh-cpa.com/client_media/files/pdf/2014_UseTax.pdf

Davis and Hodgdon Associates CPAs has been assiting nonprofits, individuals and businesses with tax and accounting services in the Burlington Vermont Metro area for more than 20 years. If you have any questions or concerns please feel free to call 802.878.1963 or email [email protected].