Vermont Consumer Tax Laws
Taxes are a part of life. Governments impose taxes to raise revenue, regulate businesses or activities, and provide incentives for doing (or not doing) certain things. The federal tax system is a labyrinth all to itself, relying mostly on income taxes. Most states rely on consumer taxes to generate revenue.
Taxes can also encourage or discourage certain activities or purchases by affecting the wider market – for example, high taxes on cigarettes are meant to discourage smoking. Consumer taxes include sales taxes, use taxes, so-called “sin taxes” on alcohol and cigarettes, and gasoline taxes.
Wherever you are, paying taxes is usually just a part of life. But knowing more can help you save money. Here’s a quick summary of Vermont’s consumer tax laws.
Consumer Tax Laws in Vermont
Vermont currently imposes a six per cent rate of tax on sales. Numerous exceptions to the sales tax exist, however. Food, clothing, household fuels like electricity and gas, medical and dental items, and agricultural supplies are among the prominent items not taxed. There’s also a use tax of six per cent as well. Use taxes most often apply to items purchased out-of-state for use in-state. When New Hampshire (a state with no sales tax) is your neighbor, a use tax helps Vermont keep up its tax revenue.
Vermont’s “sin taxes” cover alcohol and cigarettes. The tax on alcohol depends on the type and alcohol content of the beverage. Beer containing more than 6% alcohol is taxed at 55 cents per gallon while beer containing less than 6% alcohol is taxed at 26.5 cents per gallon. Wine is taxed at 55 cents per gallon and taxes on spirits depend on the gross revenue of the seller (the more they make, the higher the rate). Cigarette packs are required to carry a stamp and stamps must be purchased by sellers. Other tobacco products are taxed as well.
The Green Mountain State recently raised its gas tax. The precise rate depends on market factors, but is currently around 26 cents per gallon.
|Sales Tax||6% (tit. 32, § 9771).|
|Cigarette Tax||137.5 mills per cigarette or little cigar and for each 0.0325 ounces of rolly-your-own tobacco (tit. 32, § 7771).|
|Gasoline Tax||26¢ (tit. 23, § 3106).|
|Use Tax||6% (tit. 32, § 9773).|
Beer: 55¢ per gallon when containing more than 6% alcohol; 26.5¢ per gallon when containing 6% or less alcohol.
Wine: 55¢ per gallon.
Spirits and fortified wines: 5% if seller’s gross revenue is $500,000 or less; 10% if seller’s gross revenue is $500,001-$750,000; 25% if seller’s gross revenue is more than $750,000.
|Gambling Tax||None. Vermont doesn’t permit gambling.|
Related Resources for Consumer Tax Laws
You can find more general information about tax laws on these pages. Tax rates and items that are taxed frequently change due to state budget needs. Updated information and announcements can be found at Vermont’s Department of Taxes. Finally, if you have further questions about Vermont consumer taxes, we recommend contacting a local tax attorney.