How to Register to Collect and Pay Sales Taxes in Vermont
Generally, if you sell or rent tangible personal property in Vermont you need to apply for a Vermont Sales and Use Tax Account. To do this you need to submit Form S-1, Application for Business Tax Account. This same form is used for all types of business entities, including sole proprietorships, partnerships, limited liability companies, corporations, and others.
If you are applying for a sales tax license as a sole proprietor you can use your social security number. Other types of business entities need a federal employer identification number. You can apply for this number online on the IRS website.
Once your application is approved you will be assigned a Vermont business tax account number and will receive your sales and use tax license. You must display your sales and use tax license in a visible location in your place of business. According to the Vermont Department of Taxes, if you have more than one location you need to submit separate Forms S-1 and obtain a separate license for each location. It can take up to 10 business days to process your application.
The Vermont state sales tax rate is 6% and a 1% local option town tax applies in certain jurisdictions. In the Guide to Vermont Business Taxes you can find information on what sales are taxable and how the sales tax is calculated in different types of situations.
The Vermont Department of Taxes determines how often you have to file and pay sales and use taxes, depending on the amount of your tax liability. If you have total annual sales taxes of $500 or less you file annually by January 25th. If you have total annual sales taxes of from $501 to $2,500 you file quarterly by the 25th day of the month after the end of each quarter. And if total annual sales taxes are more than $2,500 you file monthly by the 25th of the following month. Your records are reviewed annually and your filing frequency may be changed. The Vermont Department of Taxes gives you 30 days advance notice if your frequency changes.
You can file and pay sales tax returns online using VTBizFile. If you pay by credit card and the taxes are over $200, a convenience fee is charged. For tax payments of less than $200 there is no fee.
According to the Vermont Department of Taxes, any vendor that sells items subject to sales tax in Vermont must have a Vermont Business Tax Account. This includes transient vendors who sell in Vermont for short periods of time. Promoters of flea markets or other shows or expositions that have more than 25 vendors must provide the Vermont Department of Taxes with a list of participating vendors. So if you participate in this type of event, you will need a Vermont sales tax license.
Vermont is a member of the Streamlined Sales Tax Project (SSTP). If you have sales in other states that are subject to sales tax you can voluntarily register by using the Streamlined Sales Tax Registration System.
Sources:
Apply for an Employer Identification Number (EIN) Online, IRS
Business Taxes - Local Option, Vermont Department of Taxes
Form S-1, Application for Business Tax Account
Guide to Vermont Business Taxes, Vermont Department of Taxes
Starting a Business, Vermont Department of Taxes
Streamlined Sales Tax Registration System, Streamlined Sales Tax Project
VTBizFile, Vermont Department of TaxesPublished by Kevin Hagen
Born in Minnesota, USA in 1955; studied Business Administration - Accounting, graduating in 1977 and obtaining CPA license. Worked in corporate accounting environments, eventually becoming a technical trans... View profile
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- Business – State of Vermont: www.vermont.gov/portal/business/
- Business Taxes: www.state.vt.us/tax/business.shtml
- Vermont Economic Development Authority: veda.org/