How often do you file in Vermont?
Monthly or quarterly, and you don't pick. The Vermont Department of Taxes sales and use tax FAQ says the tax period depends on your sales and use tax liability in the previous calendar year, and that the department assigns your filing frequency when you register. Above a small annual threshold you file monthly. At or below it, quarterly.
That last part matters for a new business. Your first frequency is assigned at registration, so find out which one you were given before you put a reminder in the calendar. The test looks at the previous calendar year's liability, so if your sales grow a lot, ask the department whether you should now be filing monthly.
When is each return due?
The 25th, in almost every case. The same FAQ page sets the due dates by filing period.
| Filing frequency | Period covered | Return and payment due |
|---|---|---|
| Quarterly | January to March | April 25 |
| Quarterly | April to June | July 25 |
| Quarterly | July to September | October 25 |
| Quarterly | October to December | January 25 |
| Monthly | Any month except January | 25th of the following month |
| Monthly | January | February 23 |
The department wants returns filed and paid through myVTax, its free online filing site. Its sales and use tax page says you must file and pay electronically if you file for multiple locations, if last year's sales and use tax remitted passed a large threshold, or if you collect a local option tax. A single-location shop with none of those that can't file and pay through myVTax may use the paper forms.
What rate do you charge, and does the town change it?
The state rate is 6% on retail sales of tangible personal property, unless the law exempts the item. Clothing is one exemption the department mentions by name on its FAQ page. Some towns add 1% on top. The department's local option tax page lists more than 30 municipalities, the four below among them, with a 1% local option sales tax, which makes the total 7% on a taxable sale there.
| Municipality | Local option sales tax (%) | Total sales tax (%) | In effect since |
|---|---|---|---|
| Burlington | 1 | 7 | July 2006 |
| South Burlington | 1 | 7 | October 2007 |
| Winooski | 1 | 7 | July 2019 |
| Montpelier | 1 | 7 | July 2025 |
Montpelier is the newest of the four, with its local option sales tax in effect since July 2025. If you sell into Montpelier and your setup predates that, check it. The local option tax goes on the same electronically filed return, and the department says no separate registration is needed for it.
Location is decided by the buyer, not by you. The FAQ says Vermont sales tax is destination-based, applied where the buyer takes possession of the item or where it's delivered, and the local option tax follows the same rule. So a shop in Burlington that ships an order to a customer in a town without a local option tax charges 6%, not 7%.
Not sure your sales tax setup is right?
Book a free consultation or call (603) 805-2308 and go through how your sales are being recorded.
What about online purchases where nobody charged tax?
Your business owes use tax on them. The department's getting started page says Vermont's 6% use tax is due when tax isn't collected on a taxable purchase, because the seller isn't registered to collect Vermont tax. Its examples of sellers who don't charge it include many online vendors, and vendors in states with no sales tax, New Hampshire for example.
So the printer ink, shelving or display stand bought from a website that didn't add Vermont tax isn't tax-free. The FAQ says a business reports that tax on Line 4b of Form SUT-451, the sales and use tax return. A business that has no Vermont sales and use tax account yet should ask the department how to report it. The getting started page adds two less obvious cases: using items you normally make for sale, and using something in the business that you bought for resale on an exemption certificate.
The practical fix is in the books, not on the return. If untaxed purchases are coded to their own account as they come in, the Line 4b figure is a report you run. If they're mixed in with everything else, it's an afternoon of digging through card statements each period. That's the kind of thing monthly bookkeeping should be catching as it goes.
Does a New Hampshire business selling into Vermont have to collect?
It can. The Vermont sales and use tax page says out-of-state vendors making sales in Vermont must register and collect once they made at least 200 individual transactions, or passed a sales threshold set out on the same page, in any preceding twelve-month period. Say you run a shop in Keene with a steady run of web orders shipping to Burlington and Montpelier. Count both measures, because hitting either one is enough.
Once registered, everything above applies to you as well: the assigned frequency, the 25th due dates, and the local option tax on orders delivered into those towns. Keeping the Vermont sales separate in your records from the start makes each return easier, and makes your tax filing at year end cleaner too.
Which exemption paperwork do you keep?
Only for sales that are exempt in specific circumstances. The FAQ says that in those cases the buyer gives you an exemption certificate at the time of sale, and you keep it for three years to show why you didn't collect tax. A business buying stock to resell uses Form S-3, according to the getting started page, and needs its own Vermont sales and use tax account to do it.
If you want someone to look at how your sales and purchases are being recorded before the next return, get in touch. The first consultation is free and commits you to nothing.
