Does Vermont charge sales tax on services?
by February 2, 2023
The majority of U.S. states require merchants to charge sales tax on tangible personal property (TPP), otherwise known as physical goods. Many states also implement sales and use tax on digital goods and SaaS. Because the economy has shifted over time from a manufacturing economy to a service economy, states are now looking to generate revenue by taxing services.
Here’s what merchants need to know about which services are taxable in the state of Vermont, which has a state sales tax rate of 6%.
Does Vermont charge sales tax on services?
Services are generally tax-exempt in Vermont, though there are exceptions:
- Services to tangible personal property
- If labor is expended in producing a new or different item, a tax applies to the labor charge
- Fabrication services such as: job printing, engraving, lettering memorials and monuments, silk screen printing, custom drapery, taxidermy, sign making, and more.
- Telecommunication services
- Amusement charges, defined as the admission charge to any place of recreation or amusement including athletic events and facilities, performances, theaters, golf courses and ski areas
Please keep in mind that this is a guideline, and you should consult with a sales tax professional to determine if the services your business provides should be subject to state sales tax. For an in-depth look at Vermont sales tax, TaxJar’s guide to sales tax in Vermont and the Vermont Department of Taxes has more details.
How to stay compliant with sales tax when you sell services
Managing all the moving parts of sales tax can be challenging. Are accounting services taxed? What about hair care or car maintenance? They may not be taxed in your state today, but sales tax laws change all the time. TaxJar makes it easier for you to stay current with it all, especially as you scale your business across states.
If you need to charge sales tax on services, TaxJar takes all of these state laws into account and makes your job simple. To learn more about TaxJar and get started automating your sales tax compliance, start a free, 30-day trial today.
