Vermont imposes various requirements on sellers doing business in the state. We recommend that you go through the items below to help you with the most frequently asked questions concerning sellers and sales and use tax issues.
Procedure for accepting resale certificates. In Vermont, exemption certificates may be issued by the state. The exemption certificate for resale must include the following information:
- the name of the purchaser
- the purchaser's address
- the purchaser's signature
- a description of the articles sold
- a certification that the property will be used for an exempt purpose
- the number from the purchaser's certificate of authority
When the sale is to a nonresident who has no certificate of authority, you must obtain sufficient evidence to enable you to sustain the burden of proving the sale is actually for resale. Also, in no case can you sell tax exempt goods for resale, unless the purchase order, whether written or oral, states that the goods are purchased for resale. Invoices of goods sold for resale must be marked or stamped to indicate that they are exempt purchases. The words "Vermont Sales Tax Exempt, for Resale" will satisfy this requirement.
Procedure for accepting blanket certificates. As a seller you may accept a blanket certificate if your customer repeatedly purchases the same type of property or services for processing or resale. However, blanket certificates may not be used to purchase property or services not covered by a blanket certificate. The box must be checked on the state form for a blanket resale certificate. The purchaser must include a general description of the kind of property purchased for resale on the blanket resale certificate. The blanket certificate is valid until revoked in writing. As a seller you must periodically inquire whether the information on a blanket certificate is accurate and complete. This is important, because if you have not accepted a blanket certificate in good faith, liability for the tax does not shift from you to the purchaser.
Sales and use tax liability for out-of-state mail order and catalogue retailers. Vermont has a statute that specifically taxes out-of-state mail order and catalogue sellers. However, you will be responsible for paying this tax only if you have physical presence within Vermont. To determine if you have physical presence, ask yourself the following:
- Do I have retail facilities, a warehouse, or any office space in Vermont? Maintaining retail or warehouse facilities will give you physical presence. Also, having an office for employees, even for business activities unrelated to mail order sales, will give you physical presence.
- Do my employees or I enter Vermont for purposes of taking and transmitting orders from Vermont? If your employee or independent contractor goes into Vermont to take or transmit orders, your business may have physical presence in Vermont. However, contracting with a common carrier to deliver mail order goods does not constitute physical presence.
- Do my delivery vehicles frequently enter Vermont for purposes of delivering property? Frequent deliveries in Vermont by your trucks will give you physical presence in Vermont.
Sales tax "bracket system." Beginning July 1, 2009, Vermont law does not provide for a bracket schedule.
Absorbing the tax — using a "no sales tax" advertising strategy to drum up business. In Vermont it is against the law to refund or offer to refund all or any part of the amount collected or to absorb the amount of sales tax required to be added to the sales price and collected from the purchaser. As a seller, it is also against the law for you to advertise directly or indirectly that you will absorb the sales tax that is required to be added to the sales price.
Claiming refund for excess tax payments. When your customers return goods to you and you refund the purchase price, don't include those sales in the gross sales receipts computation. If you are unable to collect accounts receivable on accounts that the tax has already been remitted, you may apply for a refund or credit. The refund or credit must be made within two years of the date the accounts were actually charged off your books and records.