The Vermont Statutes Online

Title 32: Taxation and Finance

Chapter 233: Sales and Use Tax

• Subchapter 001: General Provisions

• § 9701. Definitions

  Unless the context in which they occur requires otherwise, as used in this chapter:

  (1) “Person” means an individual, partnership, society, association, joint stock company, corporation, public corporation or public authority, estate, receiver, trustee, assignee, referee, and any other person acting in a fiduciary or representative capacity, whether appointed by a court or otherwise, and any combination of the foregoing.

  (2) “Commissioner” means the State Commissioner of Taxes or any officer or employee of the Department duly authorized by the Commissioner directly or indirectly by one or more redelegations of authority to perform the functions herein mentioned or described.

  (3) “Purchaser” means a person who purchases property or who receives services taxable under this chapter.

  (4)(A) “Sales price” means the total amount of consideration, including cash, credit, property, and services, for which personal property or services are sold, leased, or rented, valued in money, whether received in money or otherwise, without deduction for the following:

  (i) the seller’s cost of the property sold;

  (ii) the cost of materials used, labor or service cost, interest, losses, all costs of transportation to the seller, all taxes imposed on the seller, and any other expenses of the seller;

  (iii) charges by the seller for any services necessary to complete the sale, other than installation charges; and

  (iv) delivery charges; and including consideration received by the seller from third parties if:

  (I) the seller actually receives consideration from a party other than the purchaser and the consideration is directly related to a price reduction or discount on the sale;

  (II) the seller has an obligation to pass the price reduction or discount through to the purchaser;

  (III) the amount of the consideration attributable to the sale is fixed and determinable by the seller at the time of the sale of the item to the purchaser; and

  (IV) one of the following criteria is met:

  (aa) the purchaser presents a coupon, certificate, or other documentation to the seller to claim a price reduction or discount where the coupon, certificate, or documentation is authorized, distributed, or granted by a third party with the understanding that the third party will reimburse any seller to whom the coupon, certificate, or documentation is presented;

  (bb) the purchaser identifies himself or herself to the seller as a member of a group or organization entitled to a price reduction or discount (a “preferred customer” card that is available to any patron does not constitute membership in such a group); or

  (cc) the price reduction or discount is identified as a third-party price reduction or discount on the invoice received by the purchaser or on a coupon, certificate, or other documentation presented by the purchaser.

  (B) “Sales price” shall not include:

  (i) discounts, including cash, term, or coupons that are not reimbursed by a third party that are allowed by a seller and taken by a purchaser on a sale;

  (ii) interest, financing, and carrying charges from credit extended on the sale of personal property or services, if the amount is separately stated on the invoice, bill of sale, or similar document given to the purchaser;

  (iii) any taxes legally imposed directly on the consumer that are separately stated on the invoice, bill of sale, or similar document given to the purchaser;

  (iv) installation charges;

  (v) credit for any trade-in; and

  (vi) telecommunications nonrecurring charges.

  (5) “Retail sale” or “sold at retail” means any sale, lease, or rental for any purpose other than for resale, sublease, or subrent, including sales to contractors, subcontractors, or repair persons of materials and supplies for use by them in erecting structures or otherwise improving, altering, or repairing real property. A manufacturer or retailer shall be treated as a contractor when purchasing material and supplies for use by them in erecting structures or otherwise improving, altering, or repairing real property unless an election is made under section 9711 of this title.

  (6) “Purchase price” means the measure subject to use tax and has the same meaning as sales price.

  (7) “Tangible personal property” means personal property that may be seen, weighed, measured, felt, touched, or in any other manner perceived by the senses. “Tangible personal property” includes electricity, water, gas, steam, and prewritten computer software.

  (8) “In this State” or “in the State” means within the exterior limits of the State of Vermont and includes all territory within these limits owned by or ceded to the United States of America.

  (9) “Vendor” means:

  (A) A person making sales of tangible personal property or services, the receipts from which are taxed by this chapter.

  (B) A person maintaining a place of business in the State and making sales, whether at that place of business or elsewhere, to persons within the State of tangible personal property or services, the use of which is taxed by this chapter.

  (C) A person who:

  (i) solicits sales of tangible personal property either by employees, independent contractors, agents, or other representatives;

  (ii) owns or controls a person engaged in the same manner or similar line of business in this State; or

  (iii) maintains or has a franchisee or licensee operating under such person’s name in this State if the franchisee or licensee is required to collect the sales tax imposed by this chapter and by reason thereof makes sales to persons within the State of tangible personal property or services, the use of which is taxed by this chapter.

  (D) Any other person making sales to persons within the State of tangible personal property or services, the use of which is taxed by this chapter, who may be authorized by the Commissioner to collect the tax imposed by this chapter.

  (E) The State of Vermont or any of its agencies, instrumentalities, public authorities, public corporations, including a public corporation created pursuant to agreement or compact with another state, or political subdivision when that entity sells services or property of a kind ordinarily sold by private persons.

  (F) A person making sales of tangible personal property from outside this State to a destination within this State and not maintaining a place of business or other physical presence in this State that:

  (i) engages in regular, systematic, or seasonal solicitation of sales of tangible personal property in this State:

  (I) by the display of advertisements in this State;

  (II) by the distribution of catalogues, periodicals, advertising flyers, or other advertising by means of print, radio, or television media; or

  (III) by mail, Internet, telephone, computer database, cable, optic, cellular, or other communication systems, for the purpose of effecting sales of tangible personal property; and

  (ii) has either made sales from outside this State to destinations within this State of at least $100,000.00, or totaling at least 200 individual sales transactions, during the 12-month period preceding the monthly period with respect to which that person’s liability for tax under this chapter is determined.

  (G) A person who has any other contact with this State that would allow this State to require the seller to collect and remit use tax under the provisions of the Constitution and laws of the United States.

  (H) A person who provides telecommunications service as defined in subdivision (19) of this section, except that “vendor” shall not include a person whose activities in this State are limited to the performance of any activities that, without more, would not constitute nexus for sales tax collection purposes, plus any or all of the following necessary to create or maintain a World Wide Web page or Internet site for the person:

  (i) ownership of data or programming code in this State, or use of that data or programming code by another person or by a person not in this State;

  (ii) ownership of, or receipt of services from, computer servers in this State; or

  (iii) receipt of computer processing or web hosting services from a computer service provider or web hosting service in this State.

  (I) For purposes of subdivision (C) of this subdivision (9), a person making sales that are taxable under this chapter shall be presumed to be soliciting business through an independent contractor, agent, or other representative if the person enters into an agreement with a resident of this State under which the resident, for a commission or other consideration, directly or indirectly refers potential customers, whether by a link on an Internet website or otherwise, to the person if the cumulative gross receipts from sales by the person to customers in the State who are referred to the person by all residents with this type of an agreement with the person are in excess of $10,000.00 during the preceding tax year. For purposes of subdivision (C) of this subdivision (9), the presumption may be rebutted by proof that the resident with whom the person has an agreement did not engage in any solicitation in the State on behalf of the person that would satisfy the nexus requirements of the U.S. Constitution during the tax year in question.

  (J) A marketplace facilitator who has facilitated sales by marketplace sellers to destinations within this State of at least $100,000.00, or totaling at least 200 individual sales transactions, during the 12-month period preceding the monthly period with respect to which that person’s liability for tax under this chapter is determined.

  (K) A marketplace seller who has combined sales to a destination within this State and sales through a marketplace to a destination within this State of at least $100,000.00, or totaling at least 200 individual sales transactions, during the 12-month period preceding the monthly period with respect to which that person’s liability for tax under this chapter is determined.

  (10) “Trade-in” means an allowance, including any core charges, made for like-kind property given to a vendor.

  (11) “Place of entertainment” means any place where any facilities for entertainment, recreation, amusement, or sports are provided.

  (12)(A) “Casual sale” means an isolated or occasional sale of an item of tangible personal property by a person who is not regularly engaged in the business of making sales of that general type of property at retail where the property was obtained by the person making the sale, through purchase or otherwise, for his or her own use.

  (B) Aircraft as defined in 5 V.S.A. § 202(6), snowmobiles as defined in 23 V.S.A. § 3201(5), motorboats as defined in 23 V.S.A. § 3302(4), and vessels as defined in 23 V.S.A. § 3302(11) that are 16 feet or more in length are hereby specifically excluded from the definition of casual sale.

  (13) “Use” means the exercise of any right or power over tangible personal property by the purchaser thereof and includes the receiving, storage or any keeping or retention for any length of time, withdrawal from storage, any installation, any affixation to real or personal property, or any consumption of that property.

  (14) “Persons required to collect tax” or “persons required to collect any tax imposed by this chapter” means every vendor of taxable tangible personal property or services and every recipient of amusement charges. These terms also include marketplace facilitators with respect to retail sales made on behalf of a marketplace seller. These terms shall also include any officer or employee of a corporation or other entity or of a dissolved entity who, as that officer or employee, is under a duty to act for the corporation or entity in complying with any requirement of this chapter.

  (15) “Property and services the use of which is subject to tax” means all property sold to a person within the State, whether or not the sale is made within the State, the use of which property is subject to tax under section 9773 of this title or will become subject to tax when such property is received by or comes into the possession or control of such person within the State.

  (16) “Advertising agency” means a business 80 percent or more of whose gross receipts in the previous taxable year were, or in the first taxable year are reasonably projected to be, from charges for advertising services. As used in this definition, the term “gross receipts” does not include charges for printing, imprinting, reproduction, publishing of tangible personal property, or photography to the extent that:

  (A) the activity was not performed by the business itself but was contracted out to another business; and

  (B) the charges therefor were passed through the business to its client.

  (17) “Advertising materials” means tangible personal property that promotes a product, service, idea, concept, issue, or the image of a person, but not copies or reproductions of such property, or property on which printing or imprinting service has been performed.

  (18) “Advertising services” means services rendered to promote a product, service, idea, concept, issue, or the image of a person, including services rendered to design and produce advertising materials prior to the acceptance of the advertising materials for reproduction or publication, including research; design; layout; preliminary and final art preparation; creative consultation, coordination, direction, and supervision; script and copywriting; editing; and account management services. “Advertising services” do not include printing, imprinting, reproduction, publishing of tangible personal property, or photography.

  (19) “Telecommunications service” means the electronic transmission, conveyance, or routing of voice, data, audio, video, or any other information or signals to a point, or between or among points. The term “telecommunications service” includes such transmission, conveyance, or routing in which computer processing applications are used to act on the form, code, or protocol of the content for purposes of transmission, conveyance, or routing without regard to whether such service is referred to as voice-over Internet protocol services or is classified by the Federal Communications Commission as enhanced or value added. “Telecommunications service” does not include:

  (A) Data processing and information services that allow data to be generated, acquired, stored, processed, or retrieved and delivered by an electronic transmission to a purchaser where such purchaser’s primary purpose for the underlying transaction is the processed data or information.

  (B) Installation or maintenance of wiring or equipment on a customer’s premises.

  (C) Tangible personal property.

  (D) Advertising, including directory advertising.

  (E) Billing and collection services provided to third parties.

  (F) Internet access service.

  (G) Radio and television audio and video programming services, regardless of the medium, including the furnishing of transmission, conveyance, and routing of such services by the programming service provider. Radio and television audio and video programming services shall include cable service as defined in 47 U.S.C. § 522(6) and audio and video programming services delivered by commercial mobile radio service providers, as defined in 47 C.F.R. § 20.3.

  (H) Ancillary services.

  (I) Digital products delivered electronically, including software, music, video, reading materials, or ring tones.

  (20) [Repealed.]

  (21) “Mobile telecommunications service” means mobile telecommunications service as defined in 4 U.S.C. § 124.

  (22) [Repealed.]

  (23) “Alcoholic beverages” means beverages that are suitable for human consumption and contain one-half of one percent or more of alcohol by volume.

  (24) “Clothing” means all human wearing apparel suitable for general use. The following list contains examples and is not intended to be an all-inclusive list.

  (A) “Clothing” shall include:

  (i) aprons, household and shop;

  (ii) athletic supporters;

  (iii) baby receiving blankets;

  (iv) bathing suits and caps;

  (v) beach capes and coats;

  (vi) belts and suspenders;

  (vii) boots;

  (viii) coats and jackets;

  (ix) costumes;

  (x) diapers, child and adult, including disposable diapers;

  (xi) earmuffs;

  (xii) footlets;

  (xiii) formal wear;

  (xiv) garters and garter belts;

  (xv) girdles;

  (xvi) gloves and mittens for general use;

  (xvii) hats and caps;

  (xviii) hosiery;

  (xix) insoles for shoes;

  (xx) lab coats;

  (xxi) neckties;

  (xxii) overshoes;

  (xxiii) pantyhose;

  (xxiv) rainwear;

  (xxv) rubber pants;

  (xxvi) sandals;

  (xxvii) scarves;

  (xxviii) shoes and shoelaces;

  (xxix) slippers;

  (xxx) sneakers;

  (xxxi) socks and stockings;

  (xxxii) steel-toed shoes;

  (xxxiii) underwear;

  (xxxiv) uniforms, athletic and nonathletic; and

  (xxxv) wedding apparel.

  (B) “Clothing” shall not include:

  (i) belt buckles sold separately;

  (ii) costume masks sold separately;

  (iii) patches and emblems sold separately;

  (iv) sewing equipment and supplies, including knitting needles, patterns, pins, scissors, sewing machines, sewing needles, tape measures, and thimbles; and

  (v) sewing materials that become part of “clothing,” including buttons, fabric, lace, thread, yarn, and zippers.

  (25) “Clothing accessories” or “equipment” means incidental items worn on the person or in conjunction with “clothing.” “Clothing accessories or equipment” are mutually exclusive of and may be taxed differently than apparel within the definition of “clothing,” “sport or recreational equipment,” and “protective equipment.” The following list contains examples and is not intended to be an all-inclusive list. “Clothing accessories or equipment” shall include:

  (A) briefcases;

  (B) cosmetics;

  (C) hair notions, including barrettes, hair bows, and hair nets;

  (D) handbags;

  (E) handkerchiefs;

  (F) jewelry;

  (G) sunglasses, nonprescription;

  (H) umbrellas;

  (I) wallets;

  (J) watches; and

  (K) wigs and hairpieces.

  (26) “Delivery charges” means charges by the seller of personal property or services for preparations and delivery to a location designated by the purchaser of personal property, or services, including transportation, shipping, postage, handling, crating, and packing. Direct mail charges that are separately stated on an invoice or similar billing document given to the purchaser are excluded from the definition of “delivery charges.”

  (27) “Dietary supplement” means any product, other than tobacco, intended to supplement the diet that:

  (A) contains one or more of the following dietary ingredients:

  (i) a vitamin;

  (ii) a mineral;

  (iii) an herb or other botanical;

  (iv) an amino acid;

  (v) a dietary substance for use by humans to supplement the diet by increasing the total dietary intake; or

  (vi) a concentrate, metabolite, constituent, extract, or combination of any ingredients described in subdivisions (i) through (v) of this subdivision (27)(A);

  (B) is intended for ingestion in tablet, capsule, powder, softgel, gelcap, or liquid form, or if not intended for ingestion in such form, is not represented as conventional food and is not represented for use as a sole item of a meal or of the diet; and

  (C) is required to be labeled as a dietary supplement, identifiable by the “supplemental facts” box found on the label and as required pursuant to 21 C.F.R. § 101.36.

  (28) “Direct mail” means printed material delivered or distributed by U.S. mail or other delivery service to a mass audience or addresses on a mailing list provided by the purchaser or at the direction of the purchaser when the cost of the items is not billed directly to the recipients. “Direct mail” includes tangible personal property supplied directly or indirectly by the purchaser to the direct mail seller for inclusion in the package containing the printed material. “Direct mail” does not include multiple items of printed material delivered to a single address.

  (29) “Drug” means a compound, substance, or preparation and any component of a compound, substance, or preparation, but not including food and food ingredients, dietary supplements, alcoholic beverages, or grooming and hygiene products, that is:

  (A) recognized in the official U.S. Pharmacopeia, official Homeopathic Pharmacopeia of the United States, official National Formulary, or in supplements to any of them;

  (B) intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease; or

  (C) intended to affect the structure or any function of the body.

  (30) “Durable medical equipment” means equipment, including repair and replacement parts for such equipment, but does not include “mobility-enhancing equipment,” which:

  (A) can withstand repeated use;

  (B) is primarily and customarily used to serve a medical purpose;

  (C) generally is not useful to a person in the absence of illness or injury; and

  (D) is not worn on the body.

  (31) “Food and food ingredients” means substances, whether in liquid, concentrated, solid, frozen, dried, or dehydrated form, that are sold for ingestion or chewing by humans and are consumed for their taste or nutritional value. “Food and food ingredients” does not include alcoholic beverages, tobacco, cannabis and cannabis products as defined under 7 V.S.A. § 831, or soft drinks.

  (32) “Grooming and hygiene products” means soaps and cleaning solutions, shampoo, toothpaste, mouthwash, antiperspirants, and suntan lotions and screens.

  (33) “Lease or rental” means any transfer of possession or control of tangible personal property for a fixed or indeterminate term for consideration. A lease or rental may include future options to purchase or extend.

  (A) “Lease or rental” does not include:

  (i) A transfer of possession or control of property under a security agreement or deferred payment plan that requires the transfer of title upon completion of the required payments.

  (ii) A transfer of possession or control of property under an agreement that requires the transfer of title upon completion of required payments and payment of an option price does not exceed the greater of $100.00 or one percent of the total required payments.

  (iii) Providing tangible personal property along with an operator for a fixed or indeterminate period of time. A condition of this exclusion is that the operator is necessary for the equipment to perform as designed. For the purpose of this subdivision, an operator must do more than maintain, inspect, or set up the tangible personal property.

  (B) “Lease or rental” does include agreements covering motor vehicles and trailers where the amount of consideration may be increased or decreased by reference to the amount realized upon sale or disposition of the property as defined in 26 U.S.C. § 7701(h)(1).

  (34) “Mobility-enhancing equipment” means equipment, including repair and replacement parts of such equipment, but does not include “durable medical equipment,” which:

  (A) is primarily and customarily used to provide or increase the ability to move from one place to another and which is appropriate for use either in a home or a motor vehicle;

  (B) is not generally used by persons with normal mobility; and

  (C) does not include any motor vehicle or equipment on a motor vehicle normally provided by a motor vehicle manufacturer.

  (35) “Prosthetic device” means a replacement, corrective, or supportive device, including repair and replacement parts for such device worn on or in the body to:

  (A) artificially replace a missing portion of the body;

  (B) prevent or correct a physical deformity or malfunction; or

  (C) support a weak or deformed portion of the body.

  (36) “Protective equipment” means items for human wear and designed as protection of the wearer against injury or disease or as protection against damage or injury of other persons or property but not suitable for general use. “Protective equipment” is mutually exclusive of and may be taxed differently from apparel within the definition of “clothing,” “clothing accessories or equipment,” and “sport or recreational equipment.” The following list contains examples and is not intended to be an all-inclusive list. “Protective equipment” shall include:

  (A) breathing masks;

  (B) clean room apparel and equipment;

  (C) ear and hearing protectors;

  (D) face shields;

  (E) hardhats;

  (F) helmets;

  (G) paint or dust respirators;

  (H) protective gloves;

  (I) safety belts;

  (J) safety glasses and goggles;

  (K) tool belts; and

  (L) welders’ gloves and masks.

  (37) “Sport or recreational equipment” means items designed for human use and worn in conjunction with an athletic or recreational activity that are not suitable for general use. “Sport or recreational equipment” is mutually exclusive of and may be taxed differently than apparel within the definition of “clothing,” “clothing accessories or equipment,” and “protective equipment.” The following list contains examples and is not intended to be an all-inclusive list. “Sport or recreational equipment” shall include:

  (A) ballet and tap shoes;

  (B) cleated or spiked athletic shoes;

  (C) gloves, including baseball, bowling, boxing, hockey, and golf;

  (D) goggles;

  (E) hand and elbow guards;

  (F) life preservers and vests;

  (G) mouth guards;

  (H) roller and ice skates;

  (I) shin guards;

  (J) shoulder pads;

  (K) ski boots;

  (L) waders; and

  (M) wetsuits and fins.

  (38) “Paging service” means a telecommunications service that provides transmission of coded radio signals for the purpose of activating specific pagers; such transmissions may include messages or sounds, or both.

  (39) “Private communications service” means a telecommunications service that entitles the customer to exclusive or priority use of a communications channel or group of channels between or among termination points, regardless of the manner in which such channel or channels are connected, and includes switching capacity, extension lines, stations, and any other associated services that are provided in connection with the use of such channel or channels.

  (40) “Value-added non-voice data service” means a service that otherwise meets the definition of telecommunications service in which computer processing applications are used to act on the form, content, code, or protocol of the information or data primarily for a purpose other than transmission, conveyance, or routing.

  (41) “Coin-operated telephone service” means a telecommunications service paid for by inserting money into a telephone accepting direct deposits of money to operate.

  (42) “Ancillary services” means services that are associated with or incidental to the provision of telecommunications services, including detailed telecommunications billing, directory assistance, vertical service, and voice mail services.

  (43) “Telecommunication nonrecurring charges” means an amount billed for the installation, connection, change, or initiation of telecommunications service received by the customer.

  (44) “Directory assistance” means an ancillary service of providing telephone number information or address information, or both.

  (45) “Transferred electronically” means obtained by the purchaser by means other than tangible storage media.

  (46) “Specified digital products” means digital audiovisual works, digital audio works, digital books, or ringtones that are transferred electronically.

  (A) “Digital audiovisual works” means a series of related images that, when shown in succession, impart an impression of motion, together with accompanying sounds, if any.

  (B) “Digital audio works” means works that result from the fixation of a series of musical, spoken, or other sounds, including ringtones.

  (C) “Digital books” means works that are generally recognized in the ordinary and usual sense as “books.”

  (D) “Ringtones” means digitized sound files that are downloaded onto a device and that may be used to alert the customer with respect to a communication.

  (47) “End user” means any person other than a person who received by contract a product transferred electronically for further commercial broadcast, rebroadcast, transmission, retransmission, licensing, relicensing, distribution, redistribution, or exhibition of the product, in whole or in part, to another person or persons.

  (48) “Compost” means a stable humus-like material produced by the controlled biological decomposition of organic matter through active management but does not mean sewage, septage, or materials derived from sewage or septage.

  (49) “Manipulated animal manure” means manure that is ground, pelletized, mechanically dried, or consists of separated solids.

  (50) “Perlite” means a lightweight granular material made of volcanic material expanded by heat treatment for use in growing media.

  (51) “Planting mix” means material that is:

  (A) used in the production of plants; and

  (B) made substantially from compost, peat moss, or coir and other ingredients that contribute to fertility and porosity, including perlite, vermiculite, and other similar materials.

  (52) “Vermiculite” means a lightweight mica product expanded by heat treatment for use in growing media.

  (53) “Soft drink” means nonalcoholic beverages that contain natural or artificial sweeteners. “Soft drinks” do not include beverages that contain milk or milk products; soy, rice, or similar milk substitutes; or greater than 50 percent of vegetable or fruit juice by volume.

  (54) “Noncollecting vendor” means a vendor that sells tangible personal property or services to purchasers who are not exempt from the sales tax under this chapter, but that does not collect the Vermont sales tax.

  (55) “Advanced wood boiler” means a boiler or furnace:

  (A) installed as a primary central heating system;

  (B) rated as high efficiency, meaning a higher heating value or gross calorific value of 85 percent or more;

  (C) containing at least one week fuel storage, automated startup and shutdown, and fuel feed; and

  (D) meeting other efficiency and air emissions standards established by the Department of Environmental Conservation.

  (56) “Marketplace facilitator” means a person who contracts with marketplace sellers to facilitate for consideration, regardless of whether deducted as fees from the transaction, the sale of the marketplace seller’s products through a physical or electronic marketplace operated by the person and engages:

  (A) directly or indirectly through one or more affiliated persons, in any of the following:

  (i) transmitting or otherwise communicating the offer or acceptance between purchasers and marketplace sellers;

  (ii) owning or operating the infrastructure, electronic or physical, or technology that brings purchasers and marketplace sellers together;

  (iii) providing a virtual currency that purchasers are allowed or required to use to purchase products from marketplace sellers; or

  (iv) software development or research and development activities related to any of the activities described in subdivision (B) of this subdivision (56), if such activities are directly related to a physical or electronic marketplace operated by the person or an affiliated person; and

  (B) in any of the following activities with respect to the marketplace seller’s products:

  (i) payment processing services;

  (ii) fulfillment or storage services;

  (iii) listing products for sale;

  (iv) setting prices;

  (v) branding sales as those of the marketplace facilitator;

  (vi) order taking;

  (vii) advertising or promotion; or

  (viii) providing customer service or accepting or assisting with returns or exchanges.

  (57) “Marketplace seller” means a person who has an agreement with a marketplace facilitator and makes retail sales of tangible personal property, taxable services, or digital goods through a marketplace owned, operated, or controlled by a marketplace facilitator, even if the person would not be required to collect and remit the sales tax had the sale not been made through the facilitated marketplace.

  (58) “Marketplace” means the physical or electronic processes, systems, places, and infrastructure, including a website, through which a marketplace facilitator engages in any of the activities described in subdivision (56) of this section.

  (59) “Affiliated person” means a person who, with respect to another person:

  (A) has an ownership interest of more than five percent, whether direct or indirect, in the other person; or

  (B) is related to the other person because a third person, or group of third persons who are affiliated persons with respect to each other, holds an ownership interest of more than five percent, whether direct or indirect, in the related persons. (Added 1969, No. 144, § 1, eff. June 1, 1969; amended 1975, No. 243 (Adj. Sess.), § 7, eff. May 1, 1976; 1977, No. 86, §§ 1, 6; 1979, No. 105 (Adj. Sess.), § 39, eff. date, see note below; 1983, No. 212 (Adj. Sess.), § 6; 1987, No. 251 (Adj. Sess.), § 3; 1989, No. 119, § 16, eff. June 22, 1989; 1989, No. 210 (Adj. Sess.), § 131b; 1989, No. 222 (Adj. Sess.), § 24; 1991, No. 32, § 40, eff. June 1, 1991; 1991, No. 186 (Adj. Sess.), § 28, eff. May 7, 1992; 1995, No. 86 (Adj. Sess.), §§ 1, 2, eff. March 28, 1996; 1997, No. 60, §§ 76, 77, eff. Sept. 1, 1997; 1999, No. 49, § 62, eff. June 2, 1999; 2001, No. 144 (Adj. Sess.), §§ 30, 33, 34, 38, eff. June 21, 2002; 2003, No. 68, §§ 51-56, eff. date, see note below; 2003, No. 152 (Adj. Sess.), § 16, eff. date, see note below; 2005, No. 75, §§ 21, 24, eff. July 1, 2005; 2005, No. 207 (Adj. Sess.), § 13, eff. May 31, 2006; 2009, No. 1 (Sp. Sess.), § H.40; 2009, No. 160 (Adj. Sess.), § 38, eff. April 1, 2011; 2011, No. 160 (Adj. Sess.), § 39; 2011, No. 45, § 36a, eff. date, see note below; 2013, No. 174 (Adj. Sess.), §§ 41, 44; 2015, No. 57, § 91; 2015, No. 134 (Adj. Sess.), § 22; 2015, No. 134 (Adj. Sess.), §§ 25, 27, eff. July 1, 2017; 2017, No. 194 (Adj. Sess.), § 25; 2019, No. 46, § 3, eff. June 1, 2019; 2019, No. 164 (Adj. Sess.), § 15, eff. March 1, 2022; 2019, No. 175 (Adj. Sess.), § 9, eff. Oct. 8, 2020; 2021, No. 105 (Adj. Sess.), § 592, eff. July 1, 2022; 2023, No. 6, § 390, eff. July 1, 2023.)

• § 9702. General powers of the Commissioner

  (a) In addition to other powers granted in this chapter, the Commissioner may:

  (1) extend, for cause shown by general rule or individual authorization, the time of filing any return for a period not exceeding three months on the terms and conditions as the Commissioner may require;

  (2) prescribe methods for determining the amount of receipts, amusement charges, and for determining which of them are taxable and which are nontaxable;

  (3) require any person required to collect tax to keep detailed records of all receipts, amusement charges, received, charged, or accrued, including those claimed to be nontaxable, and also of the nature, type, value, and amount of all purchases, sales, admissions, and other facts relevant in determining the amount of tax due and to furnish that information upon request to the Commissioner; and

  (4) publish and maintain, as the Commissioner deems necessary, lists of specific items of tangible personal property that are found to be exempt from tax under section 9741 of this title.

  (b) Any examination under oath conducted by the Commissioner may, in the Commissioner’s discretion, be reduced to writing, and willful false testimony under oath shall be deemed perjury and be punishable as such.

  (c) [Repealed.] (Added 1969, No. 144, § 1, eff. June 1, 1969; amended 1973, No. 193 (Adj. Sess.), § 3, eff. April 9, 1974; 1975, No. 154 (Adj. Sess.), § 9, eff. date, see note below; 1983, No. 230 (Adj. Sess.), § 17(9); 1991, No. 186 (Adj. Sess.), § 29, eff. May 7, 1992; 2021, No. 105 (Adj. Sess.), § 593, eff. July 1, 2022.)

• § 9703. Liability for tax

  (a) Every person required to collect any tax imposed by this chapter or to pay it to the Commissioner as required by this chapter shall be personally and individually liable for the amount of such tax, together with such interest and penalty as has accrued under the provisions of section 3202 of this title; and if the person is a corporation or other entity, the personal liability shall extend and be applicable to any officer or agent of the corporation or entity who, as an officer or agent of the same, is under a duty to collect the tax and transmit it to the Commissioner as required in this chapter.

  (b) Any sum or sums collected in accordance with this chapter shall be deemed to be held by the person in trust for the State of Vermont. Such sums shall be recorded by such person in a ledger account so as to clearly indicate the amount of tax collected and that the same are the property of the State of Vermont.

  (c) Such person shall have the same rights in collecting the tax from his or her purchaser or regarding nonpayment of the tax by the purchaser as if the tax were a part of the purchase price of the property, telecommunications service, or amusement charge, as the case may be, and payable at the same time; provided, however, if the person required to collect the tax has failed to remit any portion of the tax to the Commissioner, that the Commissioner shall be notified of any action or proceeding brought by such person to collect the tax and shall have the right to intervene in such action or proceeding.

  (d) A person required to collect the tax may also refund or credit to the purchaser any tax erroneously, illegally, or unconstitutionally collected. No cause of action that may exist under State law shall accrue against the seller for the tax collected unless the purchaser has provided written notice to a seller, and the seller has had 60 days to respond. Such notice must contain such information necessary to determine the validity of the request. A seller who uses either a provider or a system, including a proprietary system, that is certified by the State and who has remitted to the State all taxes collected less any deductions, credits, or collected allowances shall be presumed to have a reasonable business practice. (Added 1969, No. 144, § 1, eff. June 1, 1969; amended 1989, No. 222 (Adj. Sess.), § 23, eff. May 31, 1990; 1997, No. 50, § 32, eff. June 26, 1997; 1997, No. 60, § 78, eff. Sept. 1, 1997; 1999, No. 49, § 63, eff. June 2, 1999; 2003, No. 152 (Adj. Sess.), § 20, eff. date, see note below.)

• § 9704. Principal and agent; joint and several liability

  When in the opinion of the Commissioner it is necessary for the efficient administration of this chapter to treat any salesman, representative, peddler, or canvasser as the agent of the vendor, distributor, supervisor, or employer under whom he or she operates, or from whom he or she obtains tangible personal property sold by him or her, or for whom he or she solicits business, the Commissioner may, in his or her discretion, treat such agent as the vendor jointly and severally responsible with the principal, distributor, supervisor, or employer for the collection and payment of the tax. (Added 1969, No. 144, § 1, eff. June 1, 1969; amended 1991, No. 186 (Adj. Sess.), § 30, eff. May 7, 1992.)

• § 9705. Payment and return by purchaser

  (a) Where any purchaser has failed to pay a tax imposed by this chapter to the person required to collect the same, then in addition to all other rights, obligations, and remedies provided, the tax shall be payable by the purchaser directly to the Commissioner, and it shall be the duty of the purchaser to file a return with the Commissioner and to pay the tax to him or her within 20 days of the date the tax was required to be paid.

  (b) The Commissioner may, whenever he or she deems it necessary for the proper enforcement of this chapter, provide by rule that purchasers shall file returns and pay directly to the Commissioner any tax herein imposed, at such times as returns are required to be filed and paid by persons required to collect the tax. (Added 1969, No. 144, § 1, eff. June 1, 1969.)

• § 9706. Statutory purposes

  (a) The statutory purpose of the exemption for medical products in subdivision 9741(2) of this title is to lower the cost of medical products in order to support the health and welfare of Vermont residents.

  (b) The statutory purpose of the exemption for agricultural inputs in subdivision 9741(3) of this title is to promote Vermont’s agricultural economy.

  (c) The statutory purpose of the exemption for prescription drugs intended for animal use, durable medical equipment and prosthetics for animal use, and veterinary supplies in subdivision 9741(53) of this title is to lessen the cost of veterinary services in order to support the health and welfare of Vermont animals.

  (d) The statutory purpose of the exemption for fuels for railroads and boats, to propel vehicles, and to power machinery used in the timber industry, in subdivision 9741(7) of this title is to avoid the taxation of fuels:

  (1) for the types of transportation for which public expenditure on infrastructure is unnecessary;

  (2) that are already subject to taxation under 23 V.S.A. chapter 27 or 28 in support of public expenditure on infrastructure or are specifically exempt from taxation under either of those chapters; and

  (3) in order to promote Vermont’s commercial timber and forest products economy.

  (e) The statutory purpose of the exemption for sales of food in subdivision 9741(13) of this title is to limit the cost of goods that are necessary for the health and welfare of all people in Vermont.

  (f) The statutory purpose of the exemption for newspapers in subdivision 9741(15) of this title is to reduce the cost of access to news and community information for people in Vermont.

  (g) The statutory purpose of the exemption for rentals of coin-operated washing facilities in subdivision 9741(19) of this title is to exclude from taxation facilities that are still operated with coins.

  (h) The statutory purpose of the exemption for admission fees to nonprofit museums in subdivision 9741(20) of this title is to support the missions of certain nonprofit facilities and encourage higher visitation.

  (i) The statutory purpose of the exemption for items sold to fire, ambulance, and rescue squads in subdivision 9741(21) of this title is to limit the tax on organizations charged with protecting the safety of the public.

  (j) The statutory purpose of the exemption for funeral charges in subdivision 9741(22) of this title is to lessen the costs accumulated by the bereaved.

  (k) The statutory purpose of the exemption for commercial, industrial, or agricultural research use of tangible personal property in subdivision 9741(24) of this title is to reduce financial barriers to research and innovation in the commercial, industrial, and agricultural industries.

  (l) The statutory purpose of the exemption for agricultural machinery and equipment in subdivision 9741(25) of this title is to promote Vermont’s agricultural economy.

  (m) The statutory purpose of the exemption for energy purchases for a residence in subdivision 9741(26) of this title is to limit the cost of goods that are necessary for the health and welfare of Vermonters.

  (n) The statutory purpose of the exemption for energy purchases for farming in subdivision 9741(27) of this title is to promote Vermont’s agricultural economy.

  (o) The statutory purpose of the exemption for sales of films to movie theaters in subdivision 9741(28) of this title is to avoid double taxation.

  (p) The statutory purpose of the exemption for aircraft and depreciable parts for commercial and private use in subdivision 9741(29) of this title is to promote the growth of the aircraft maintenance industry in Vermont by lowering the cost of parts and equipment relative to other states with private airplane maintenance facilities.

  (q) The statutory purpose of the exemption for railroad rolling stock and depreciable parts in subdivision 9741(30) of this title is to increase the use of rail for transport.

  (r) The statutory purpose of the exemption for ferryboats and depreciable parts in subdivision 9741(31) of this title is to increase the use of ferries for transport.

  (s) The statutory purpose of the exemption for sales of mobile homes and modular housing in subdivision 9741(32) of this title is to create equity between mobile and modular housing and traditional residential construction by providing an exemption for the estimated portion of the cost attributable to labor (versus materials).

  (t) The statutory purpose of the exemption for the U.S. flag sold to or by exempt veterans’ organizations in subdivision 9741(33) of this title is to support veterans’ organizations in performing their traditional functions.

  (u) The statutory purpose of the exemption for property transferred as an incidental part of a personal service transaction or transfer of intangible property rights in subdivision 9741(35) of this title is to forgo taxation when the cost of compliance exceeds the revenues.

  (v) The statutory purpose of the exemption for advertising materials in subdivision 9741(36) of this title is to exclude tangible personal property from taxation if it is incidental to a larger service.

  (w) The statutory purpose of the exemption for documents that record a professional service in subdivision 9741(37) of this title is to exclude tangible personal property from taxation if it is incidental to a service package.

  (x) The statutory purpose of the tracked vehicles cap in subdivision 9741(38) of this title is to lessen the cost of capital investments.

  (y) The statutory purpose of the exemption for sales of building materials in subdivision 9741(39) of this title is to provide incentives to restore and revitalize downtown districts.

  (z) The statutory purpose of the exemption for third-party scrap construction materials in subdivision 9741(43) of this title is to promote the reuse and recycling of scrap construction materials.

  (aa) The statutory purpose of the exemption for property incorporated in a railroad line in subdivision 9741(44) of this title is to increase the use of rail for transport by lowering the costs of materials.

  (bb) The statutory purpose of the exemption for clothing and footwear in subdivision 9741(45) of this title is to limit the tax burden on the purchase of goods that are necessary for the health and welfare of all people in Vermont.

  (cc) The statutory purpose of the exemptions for property incorporated into a net metering system, on-premise energy systems not connected to the electric distribution system, and solar hot water heating systems in subdivision 9741(46) of this title are to increase the deployment of solar technologies until the price of solar materials and installation decreases to the point it does not need State subsidization.

  (dd) The statutory purpose of the exemption for purchases by and limited purchases from 501(c)(3) organizations in subdivision 9743(3) of this title is to reduce costs for certain nonprofit organizations in order to allow them to dedicate more of their financial resources to furthering the public-service missions of the organizations.

  (ee) The statutory purpose of the exemption for building materials and supplies used in construction or repair of buildings by governmental bodies, 501(c)(3) organizations, or development corporations in subdivision 9743(4) of this title is to reduce the costs of construction for certain nonprofit organizations in order to allow them to dedicate more financial resources to their public-service missions.

  (ff) The statutory purpose of the exemption for amusement charges for four events per year for 501(c)(4)-(13) and (19) organizations and political organizations in subdivision 9743(5) of this title is to reduce the costs for and encourage participation in a limited number of events organized by certain nonprofit organizations in order to allow these organizations to dedicate more financial resources to their public-service missions.

  (gg) The statutory purpose of the exemption for amusement charges for events presented by 501(c)(3) organizations in subdivision 9743(7) of this title is to reduce the costs for and encourage participation in fundraising events organized by certain nonprofit organizations in order to allow these organizations to dedicate more financial resources to their public-service missions.

  (hh) The statutory purpose of the reallocation of receipts from tax imposed on sales of construction materials in section 9819 of this title is to provide incentives to restore and revitalize certain properties in designated downtown districts.

  (ii) The statutory purpose of the exemption for sales by licensed auctioneers in subdivision 9741(48) of this title is to extend the casual sale exemption to sales involving an auctioneer selling on behalf of a third party.

  (jj) The statutory purpose of the exemptions for composting materials, compost, animal manure, manipulated animal manure, and planting mix in subdivisions 9741(49) and (50) of this title is to support the composting industry and to further the goals of 2012 Acts and Resolves No. 148.

  (kk) The statutory purpose of the exemption for timber cutting, removal, and processing machinery in subdivision 9741(51) of this title is to promote Vermont’s commercial timber and forest products economy.

  [Subsection (ll) repealed effective July 1, 2024.]

  (ll) The statutory purpose of the exemption for advanced wood boilers in subdivision 9741(52) of this title is to promote the forest products industry in Vermont by encouraging the purchase of modern wood heating systems.

  (mm) The statutory purpose of the exemption for cannabis and cannabis products in subdivision 9741(55) of this title is to lower the cost of medical products sold by any dispensary as authorized under 7 V.S.A. chapter 37 in order to support the health and welfare of Vermont residents.

  (nn) The statutory purpose of the exemption for sales of recyclable paper carryout bags in subdivision 9741(54) of this title is to lessen the cost of recyclable paper carryout bags incidental to other retail purchases made by customers in Vermont.

  (oo) The statutory purpose of the exemption for menstrual products in subdivision 9741(56) of this title is to limit the cost of goods that are necessary for the health and welfare of Vermonters. (Added 2013, No. 200 (Adj. Sess.), § 6; amended 2013, No. 174 (Adj. Sess.), § 45; 2017, No. 75, § 18a; 2017, No. 77, § 10; 2017, No. 194 (Adj. Sess.), § 27; 2019, No. 164 (Adj. Sess.), § 17, eff. March 1, 2022; 2021, No. 20, § 270; 2021, No. 73, § 11, eff. July 1, 2020; 2021, No. 105 (Adj. Sess.), § 594, eff. July 1, 2022; 2021, No. 179 (Adj. Sess.), § 27a, eff. June 7, 2022.)

• § 9707. Registration

  (a) Before commencing business or opening new places of business, every person required to collect any tax imposed by this chapter and every person purchasing tangible personal property for resale shall apply for a license in the manner prescribed by the Commissioner. The Commissioner shall issue, without charge, to each registrant a license empowering him or her to collect the tax. Each license shall state the place of business to which it is applicable. The license shall be prominently displayed in the place of business of the registrant. A registrant who has no regular place of doing business shall attach the license to his or her cart, stand, truck, or other merchandising device or carry it on his or her person. The licenses shall be nonassignable and nontransferable and shall be surrendered to the Commissioner immediately upon the registrant’s ceasing to do business at the place named.

  (b) No later than one business day prior to an event at which taxable sales will be made by vendors who have no permanent place of business in the State, the promoter of the event shall provide to the Commissioner a list of vendors who are authorized by the promoter to sell taxable property at the event and the vendors’ current sales tax license numbers. No later than one week after the event, the promoter shall notify the Department in writing of any changes to the list of participating vendors and their sales tax license numbers. In this subsection, “event” means a specific time and location at which 25 or more vendors are authorized by the promoter to sell taxable items.

  (c) Any person who is not otherwise required to collect any tax imposed by this chapter and who makes sales to persons within the State of tangible personal property or services, the use of which is subject to tax under this chapter, may register with the Commissioner who may, in his or her discretion and subject to such conditions as he or she may impose, issue to him or her a certificate of authority to collect the compensating use tax imposed by this chapter. (Added 1969, No. 144, § 1, eff. April 23, 1969; amended 1991, No. 186 (Adj. Sess.), § 30a, eff. May 7, 1992; 2003, No. 68, § 57; 2003, No. 70 (Adj. Sess.), § 56, eff. March 1, 2004; 2005, No. 75, § 1, eff. June 23, 2005.)

• § 9708. Restrictions on advertising

  (a) No person required to collect any tax imposed by this chapter shall advertise or hold out to any person or to the public in general, in any manner, directly or indirectly, that the tax is not considered as an element in the price or amusement charge payable by customer, or that he or she will pay the tax, that the tax will not be separately charged and stated to the customer, or that the tax will be refunded to the customer.

  (b) Upon written application duly made and proof duly presented to the satisfaction of the Commissioner showing that in his or her particular business it would be impractical for the vendor to separately charge the tax to the customer, the Commissioner may waive the application of the requirement herein as to such vendor.

  (c) Whenever reference is made in placards or advertisements or in any other publications to any tax imposed by this chapter, the reference shall be in substantially the following form: “sales and use tax”; except that in any bill, receipt, statement, or other evidence or memorandum of sale or amusement charges issued or employed by a person required to collect tax, if the tax is required to be stated separately thereon as provided in section 9778 of this title, the word “tax” will suffice. (Added 1969, No. 144, § 1, eff. June 1, 1969.)

• § 9709. Records to be kept

  Every person required to collect any tax imposed by this chapter shall keep records of every sale or amusement charge and of all amounts paid, charged, or due thereon and of the tax payable thereon, in such form as the Commissioner may by regulation require. These records shall include a true copy of each sales slip, invoice, receipt, statement, or memorandum upon which section 9778 of this title requires that the tax be stated separately. The records shall be available for inspection and examination at any time upon demand by the Commissioner or his or her duly authorized agent or employee and shall be preserved for a period of three years, except that the Commissioner may consent to their destruction within that period or may require that they be kept longer. (Added 1969, No. 144, § 1, eff. June 1, 1969.)

• § 9710. Fundraising events; charitable organizations

  (a) No charitable organization shall enter into a contract with any person for the promotion of any event the proceeds of which will be shared by the charitable organization and the person promoting the event without first having obtained a letter from the Commissioner stating that the person is in good standing with the Department.

  (b) A person is in “good standing” if the person is registered to collect or pay any tax imposed under this title and:

  (1) has no taxes due and payable; or

  (2) has a pending appeal with respect to any taxes due and payable; or

  (3) is in compliance with a payment plan approved by the Commissioner.

  (c) The Commissioner may require that the person file a bond in order to be in good standing. The provisions of section 3114 of this title shall apply to any bond required under this section.

  (d) All amounts paid to the person promoting the event as compensation or reimbursement of expenses or commissions in connection with the promotion are subject to tax under subdivision 9771(4) of this title, unless specifically exempted.

  (e) If a charitable organization enters into a contract in willful violation of subsection (a) of this section, the charitable organization shall be jointly liable for any taxes due and payable on the proceeds from the event. (Added 1989, No. 232 (Adj. Sess.), § 3.)

• § 9711. Election by manufacturer or retailer

  (a) As used in this section:

  (1) “Manufacturer” is any person that is primarily engaged in the business of manufacturing tangible personal property for sale.

  (2) “Retailer” is any person that is primarily engaged in the business of making retail sales of tangible personal property.

  (b) A manufacturer or retailer that purchases material and supplies for use by them in erecting structures or otherwise improving, altering, or repairing real property shall be permitted to make an election that it will be treated as a retailer on the purchase of those materials and supplies, and such purchase will not be considered a retail sale under subdivision 9701(5) of this title.

  (c) A manufacturer or retailer making an election under subsection (b) of this section shall charge sales tax to its customer on its materials and supplies or, in the case of a manufacturer, the finished manufactured products, when it uses those materials, supplies, or finished manufactured products in erecting structures or otherwise improving, altering, or repairing real property. The sales price for the purposes of calculating sales tax on materials, supplies, or finished manufactured products shall not be less than the manufacturer’s or retailer’s best customer price. The tax charged shall be separately stated on any invoice or receipt.

  (d) An election made under subsection (b) of this section shall be binding on a manufacturer or retailer for a minimum of five years and shall remain in effect until the manufacturer or retailer files a withdrawal of election. No manufacturer or retailer shall be entitled to a refund on the basis of a withdrawal of an election.

  (e) The provisions of this section shall not excuse any person from the obligation to collect tax on retail sales of tangible personal property not used in erecting structures or otherwise improving, altering, or repairing real property or from the obligation to pay sales tax or remit the use tax on tools, services, and other materials that are not used in erecting structures or otherwise improving, altering, or repairing real property.

  (f) An election made under subsection (b) of this section shall be made on a form prescribed by the Commissioner and filed with the Department of Taxes at least 30 days prior to such election taking effect. (Added 2015, No. 134 (Adj. Sess.), § 23.)

• § 9712. Notice requirements for noncollecting vendors

  (a) Each noncollecting vendor making sales into Vermont shall notify Vermont purchasers that sales or use tax is due on nonexempt purchases made from the noncollecting vendor and that the State of Vermont requires the purchaser to pay the tax due on his or her tax return. Failure to provide the notice required by this subsection shall subject the noncollecting vendor to a penalty of $5.00 for each such failure, unless the noncollecting vendor shows reasonable cause for such failure.

  (b) Each noncollecting vendor shall send notification to all Vermont purchasers on or before January 31 of each year showing the total amount paid by the purchaser for Vermont purchases made from the noncollecting vendor in the previous calendar year. The notice requirement in this subsection only applies to Vermont purchasers who have made $500.00 or more of purchases from the noncollecting vendor in the previous calendar year. The notice shall include any information required by the Commissioner by rule. The notification shall state that the State of Vermont requires a sales or use tax return to be filed and sales or use tax paid on nonexempt purchases made by the purchaser from the noncollecting vendor. The notification required by this subsection shall be sent separately to all Vermont purchasers by first-class mail or electronic mail and shall not be included with any other shipments. The notification shall include the words “Important Tax Document Enclosed” on the exterior of the mailing. The notification shall include the name of the noncollecting vendor. Failure to send the notification required by this subsection shall subject the noncollecting vendor to a penalty of $10.00 for each such failure, unless the noncollecting vendor shows reasonable cause for such failure.

  (c) [Repealed.]

  (d) The Commissioner is authorized to adopt rules or procedures or to create forms necessary to implement this section. Penalties imposed under this section shall be subject to the same administrative and appeal provisions of this chapter as if imposed under section 3202 of this title. (Added 2015, No. 134 (Adj. Sess.), § 26, eff. July 1, 2017; amended 2017, No. 73, § 23; 2019, No. 175 (Adj. Sess.), § 10, eff. Oct. 8, 2020.)

• § 9713. Marketplace facilitators and marketplace sellers

  (a) Marketplace facilitators shall collect and remit the sales tax on retail sales by marketplace sellers through a marketplace. Marketplace sellers shall collect and remit the sales tax on any retail sales within this State that are not made through a marketplace.

  (b) A marketplace facilitator shall certify to its marketplace sellers that it will collect and remit the sales tax under this chapter on the sale of taxable items made through its marketplace. A marketplace seller that accepts a certification from a marketplace facilitator in good faith shall exclude sales made through the marketplace from its obligation as a vendor under this chapter.

  (c) A marketplace facilitator is relieved from liability under this chapter if it can demonstrate to the Commissioner that its failure to collect the correct amount of tax was due to incorrect information given to the marketplace facilitator by the marketplace seller. (Added 2019, No. 46, § 4, eff. June 1, 2019.)

• Subchapter 002: Exemptions

• § 9741. Sales not covered

  Retail sales and use of the following shall be exempt from the tax on retail sales imposed under section 9771 of this title and the use tax imposed under section 9773 of this title:

  (1) Sales not within the taxing power of this State under the Constitution of the United States.

  (2) Drugs intended for human use, durable medical equipment, mobility enhancing equipment, and prosthetic devices and supplies, including blood, blood plasma, insulin, and medical oxygen, used in diagnosis or treatment intended to alleviate human suffering or to correct, in whole or in part, human physical disabilities; provided, however, that toothbrushes, floss, and similar items of nominal value given by dentists and hygienists to patients during treatment are supplies used in treatment to alleviate human suffering or to correct, in whole or part, human physical disabilities and are exempt under this subdivision.

  (3) Agriculture feeds, seed, plants, baler twine, silage bags, agricultural wrap, sheets of plastic for bunker covers, liming materials, breeding and other livestock, semen breeding fees, baby chicks, turkey poults, agriculture chemicals other than pesticides, and bedding; and fertilizers and pesticides for use and consumption directly in the production for sale of tangible personal property on farms, including stock, dairy, poultry, fruit and truck farms, orchards, nurseries, or in greenhouses or other similar structures used primarily for the raising of agricultural or horticultural commodities for sale.

  (4) Casual sales.

  (5), (6) [Repealed.]

  (7)(A) Except as provided in subdivision (B) of this subdivision (7), sales of:

  (i) motor fuels taxed or exempted under 23 V.S.A. chapter 28;

  (ii) dyed diesel used to power machinery described in subdivision (51) of this section; and

  (iii) dyed diesel used to propel a vehicle off the highways of the State.

  (B) Aviation jet fuel and natural gas used to propel a motor vehicle shall be taxed under this chapter with the proceeds to be allocated to the Transportation Fund in accordance with 19 V.S.A. § 11.

  (8) [Repealed.]

  (9) Rents for rooms taxed under chapter 225 of this title and the transactions exempted therefrom.

  (10) Sales of meals or alcoholic beverages taxed or exempted under chapter 225 of this title, except alcoholic beverages under subdivision 9202(10)(D)(v) or (11)(B)(i) of this title, or any alcoholic beverages served for immediate consumption.

  (11) [Repealed.]

  (12) Motor vehicle purchases and use taxed under chapter 219 of this title and the transactions exempted therefrom that are listed in section 8911 of this title. Provided, however, that notwithstanding subdivision 8911(5) of this title, construction, earthmoving, logging, and motorized equipment that has not been registered as a motor vehicle is subject to tax under this chapter, and further provided that power take off and other auxiliary equipment on motor vehicles, whether attached prior to or subsequent to registration, is not exempt under this section. Motor vehicle parts purchased by a dealer registered under the provisions of 23 V.S.A. §§ 451-468 shall be exempt from the tax under this chapter when used to recondition a used motor vehicle owned by the dealer in its inventory for resale.

  (13) Sales of food and food ingredients sold for human consumption off the premises where sold, and sales of eligible foods that are purchased with benefits under the Supplemental Nutrition Assistance Program or any successor program, consistent with federal law.

  (14)(A) Tangible personal property that becomes an ingredient or component part of or is consumed or destroyed or loses its identity in the manufacture of tangible personal property for sale.

  (B) Machinery and equipment used in or consumed as an integral or essential part of an integrated production operation by a manufacturing or processing plant or facility engaged in the manufacture of tangible personal property for sale, or in the manufacture of other machinery or equipment, parts, or supplies for use in the manufacturing process. For the purposes of this subdivision (14), “manufacture” includes extraction of mineral deposits, the entire printing and bookmaking process, and the entire publication process.

  (C) As used in this subdivision (14):

  (i) “Integrated production operation” means an integrated series of operations at a manufacturing or processing plant or facility to process, transform, or convert tangible personal property by physical, chemical, or other means into a different form, composition, or character from that in which it originally existed. Integrated production operations begin when raw material is first changed physically, chemically, or otherwise in form, composition, or character, including being removed from storage or introduced for this manipulation, and end when the product is placed in initial packaging and shall include production line operations, including initial packaging operations, and waste, pollution, and environmental control operations.

  (ii) “Manufacturing or processing business” means a business that utilizes an integrated production operation to manufacture, process, fabricate, or finish items for wholesale and retail distribution as part of what is commonly regarded by the general public as an industrial manufacturing or processing operation or an agricultural commodity processing operation. “Manufacturing or processing business” does not include nonindustrial businesses whose operations are primarily retail and that produce or process tangible personal property as an incidental part of conducting the retail business, such as retailers who bake, cook, or prepare food products in the regular course of their retail trade; the assembling of product by retailers for sale; grocery stores, meat lockers, and meat markets that butcher or dress livestock or poultry in the regular course of their retail trade; contractors who alter, service, repair, or improve real property; and retail businesses that clean, service, or refurbish and repair tangible personal property for its owner. The examples provided in this subdivision (ii) shall not be construed as exclusive.

  (iii) “Manufacturing or processing plant or facility” means a single, fixed location owned or controlled by a manufacturing or processing business that consists of one or more structures or buildings in a contiguous area where integrated production operations are conducted to manufacture or process tangible personal property to be ultimately sold at retail. A business may operate one or more manufacturing or processing plants or facilities at different locations to manufacture or process a single product of tangible personal property to be ultimately sold at retail.

  (iv) “Primary” or “primarily” means more than 50 percent of the time.

  (v) “Production line” means the assemblage of machinery and equipment at a manufacturing or processing plant or facility where the actual transformation or processing of tangible personal property occurs.

  (D) For the purposes of this subdivision (14), machinery and equipment shall be deemed to be used as an integral or essential part of an integrated production operation when used during the integrated production operation:

  (i) to transport, convey, handle, or store the property undergoing manufacturing or processing at any point from the beginning of the production line until it is placed into initial packaging;

  (ii) to act upon, effect, promote, or otherwise facilitate a physical change to the property undergoing manufacturing or processing;

  (iii) to guide, control, or direct the movement of property undergoing manufacturing or processing;

  (iv) to test or measure materials, the property undergoing manufacturing or processing, or the finished product during the manufacturer’s integrated production operations;

  (v) to plan, manage, control, or record the receipt and flow of property while undergoing manufacturing or processing;

  (vi) to lubricate, control the operating of, or otherwise enable the functioning of other production machinery and equipment and the continuation of production operations;

  (vii) to transmit or transport electricity, gas, water, steam, or similar substances used in production operations from the point of generation, if produced by the manufacturer or processor at the plant site, to that manufacturer’s production operation or, if purchased or delivered from off-site, from the point where the substance enters the site of the plant or facility to that manufacturer’s production operations;

  (viii) to package the property being manufactured or processed in any container or wrapping in which such property is normally sold or transported, even if the machinery operates after the point of initial packaging;

  (ix) to cool, heat, filter, refine, or otherwise treat water, steam, acid, oil, solvents, or other substances that are used in production operations;

  (x) to provide and control an environment required to maintain certain levels of air quality, humidity, or temperature in special and limited areas of the plant or facility where such regulation of temperature or humidity is part of and essential to the production process;

  (xi) to treat, transport, or store waste or other byproducts of production operations at the plant or facility and to clean manufacturing machinery and equipment;

  (xii) to control pollution at the plant or facility where the pollution is produced by the manufacturing or processing operation; or

  (xiii) to inspect or conduct quality control on the product, even if the inspection or quality control machinery operates after the point of initial packaging.

  (E) “Machinery and equipment used as an integral or essential part of an integrated production operation” does not mean:

  (i) machinery and equipment used for nonproduction purposes, including machinery and equipment used for plant security, fire prevention, first aid, accounting, administration, record keeping, advertising, marketing, sales or other related activities, plant cleaning, plant communications, and employee work scheduling;

  (ii) machinery, equipment, and tools used primarily in maintaining and repairing any type of machinery and equipment or the building and plant;

  (iii) transportation, transmission, and distribution equipment not primarily used in a production, warehousing, or material handling operation at the plant or facility, including the means of conveyance of natural gas, electricity, oil, or water, and related equipment, located outside the plant or facility;

  (iv) office machines and equipment, including computers and related peripheral equipment, not used directly and primarily to control or measure the manufacturing process;

  (v) furniture and other furnishings;

  (vi) buildings, other than exempt machinery and equipment that is permanently affixed to or becomes a physical part of the building, and any other part of real estate that is not otherwise exempt;

  (vii) building fixtures that are not integral to the manufacturing operation, such as utility systems for heating, ventilation, air conditioning, communications, plumbing, or electrical;

  (viii) machinery and equipment used for general plant heating, cooling, and lighting; or

  (ix) motor vehicles that are registered for operation on public highways.

  (F) Subdivisions (D) and (E) of this subdivision (14) shall not be construed as exclusive lists of the machinery and equipment that qualify or do not qualify as an integral or essential part of an integrated production operation. When machinery or equipment is used as an integral or essential part of production operations part of the time and for nonproduction purposes at other times, the primary use of the machinery or equipment shall determine the qualification of the machinery or equipment for the exemption.

  (15) Sales of newspapers and sales of tangible personal property that becomes an ingredient or component part of, or is consumed or destroyed or loses its identity in the manufacture of newspapers, whether sold or distributed without charge. A publication shall not be considered a newspaper unless, on an average for the taxable year, at least 10 percent of its printed material consists of news of general or community interest, community notices, editorial comment, or articles by different authors.

  (16) Materials, containers, labels, sacks, cans, boxes, drums, or bags and other packing, packaging, or shipping materials for use in packing, packaging, or shipping tangible personal property by a manufacturer or distributor.

  (17) Rentals of furniture in furnished apartments or houses for residential use.

  (18) Fees and charges paid for admission to or use of federal, State, or municipal recreation areas and facilities, including swimming pools.

  (19) Rentals of coin-operated washing facilities for individual or personal use, including car washes and laundries.

  (20) Fees and charges for admission to nonprofit museums.

  (21) Sales of equipment, supplies, and building materials made directly to volunteer fire departments, volunteer ambulance companies, or volunteer rescue squads for official use by the volunteer organizations.

  (22) Funeral charges, including sales of tangible personal property such as caskets, vaults, boxes, clothing, crematory urns, and other such funeral furnishings as are necessary incidents of the funeral, but excluding the sale of flowers and other items sold as an accommodation rather than as an integral part of the funeral service or preparation therefor.

  (23) [Repealed.]

  (24) Tangible personal property purchased for use or consumption directly and exclusively, except for isolated or occasional uses, in commercial, industrial, or agricultural research or development in the experimental or laboratory sense. It shall be rebuttably presumed that uses are not isolated or occasional if they total more than four percent of the time the machinery or equipment is operated. Such research or development shall not be deemed to include the ordinary testing or inspection of materials or products for quality control, efficiency surveys, management studies, consumer surveys, advertising, promotions, or research in connection with literary, historical, or similar projects.

  (25) Sales of agricultural machinery and equipment for use and consumption predominately in the production for sale of tangible personal property on farms, including stock, dairy, poultry, fruit, and truck farms, orchards, nurseries, or in greenhouses or other similar structures used primarily for the raising of agricultural or horticultural commodities for sale. As used in this subdivision, the term “predominately” means 75 percent or more of the time the machinery or equipment is in use.

  (26) Sales of electricity, oil, gas, and other fuels used in a residence for all domestic use, including heating, but not including fuel sold at retail in free-standing containers, or sold as part of a transaction where a free-standing container is exchanged without a separate charge. Wood pellets sold to an individual on the vendor’s premises or delivered to an individual’s residence shall be presumed to be purchased for residential use and shall be exempt sales under this subdivision unless the vendor knew or ought reasonably to have known that the wood pellets were not purchased for residential use. A certificate of exemption shall not be required for exempt retail sales of wood pellets to an individual. The Commissioner shall by rule determine that portion of the sales attributable to domestic use where fuels are used for purposes in addition to domestic use.

  (27) Sales of electricity, oil, gas, and other fuels used directly and exclusively for farming purposes.

  (28) Sales of films where the films are acquired exclusively for the purpose of charging admission to see such films and where such admission is subject to the tax imposed by subdivision 9771(4) of this title.

  (29) Aircraft, but not drones, sold to a person that holds itself out to the general public as engaging in air commerce, for use primarily in the carriage of persons or property for compensation or hire; and parts, machinery, and equipment to be installed in any aircraft, other than drones.

  (30) Railroad rolling stock, including depreciable parts, machinery, and equipment to be installed as a capital asset in such rolling stock, sold for use primarily in the carriage of persons or property. As used in this section, “railroad rolling stock” shall include locomotives, cabooses, boxcars, tank cars, flatbed cars, maintenance of way equipment, and all other wheeled vehicles used on rails or tracks.

  (31) Ferryboats, including depreciable parts, machinery, and equipment to be installed as a capital asset in such ferryboat, sold to a person who holds himself or herself out to the general public as engaging in water commerce, for use primarily in the carriage of persons or property for compensation or hire.

  (32) Forty percent of the receipts from sales of mobile homes, as defined in 9 V.S.A. § 2601, and modular housing, when they are sold as tangible personal property.

  (33) Sales of the flag of the United States to and by veterans’ organizations exempt under 26 U.S.C. § 501(c)(19).

  (34) Sales of electricity, oil, gas, and other fuels used directly or indirectly in manufacturing tangible personal property for sale.

  (35) Charges made when tangible property is transferred as part of a personal services transaction or a transfer of intangible property rights, as long as the focus of the transaction is the provision of services or the transfer of intangible property rights and not the transfer of tangible personal property; no separate charge is made for the transfer of tangible personal property; and the value of the tangible personal property transferred, including the value of services added to the tangible personal property transferred, is less than 10 percent of the total charge for the transaction. When the focus of the transaction is the transfer of tangible personal property, all receipts from the sale are taxable, including receipts from separately stated charges for services to produce the property, unless the receipts are otherwise exempt under this chapter.

  (36) Charges by an advertising agency for the transfer of title or possession of or right to use advertising materials when the transfer is made in conjunction with the delivery of advertising services. This exemption does not extend to charges by any business other than an advertising agency or to charges by any person for printing, imprinting, copying, or reproducing advertising materials.

  (37) Charges for documents, the sole purpose of which is to record or memorialize professional services rendered, such as charges for briefs, memoranda, agreements, and wills prepared by lawyers; charges for tax returns and reports produced by accountants; charges for drawings produced by architects; or charges for insurance policies.

  (38) Tax on the sale or use of a tracked vehicle shall not exceed $1,100.00 adjusted as follows: as of July 1 of each even-numbered year, the Commissioner shall adjust the most recent unrounded cap amount by the cumulative inflation index for the prior two calendar years under the consumer price index for urban consumer all items, and round that amount to the nearest $10.00, and shall publish this rounded amount as the new cap.

  (39) Sales of building materials within any three consecutive years in excess of $1,000,000.00 in purchase value used in the construction, renovation, or expansion of facilities that are used exclusively, except for isolated or occasional uses, for the manufacture of tangible personal property for sale.

  (40) [Repealed.]

  (41) Charges for wholesale transactions between telecommunications service providers where the service is a component part of a service provided to an end user. This exemption includes network access charges and interconnection charges paid to a local exchange carrier.

  (42) [Repealed.]

  (43) Sales of scrap materials generated in the course of construction or demolition and diverted from waste disposal at the construction or demolition job site, provided that the sale is not by the generator and is by a person who received the materials from the generator with no payment.

  (44) Tangible personal property to be incorporated in a rail line in connection with the construction, maintenance, repair, improvement, or reconstruction of the rail line.

  (45) Clothing, but clothing shall not include clothing accessories or equipment, protective equipment, or sport or recreational equipment.

  (46) Tangible personal property to be incorporated into:

  (A) a net metering system as defined in 30 V.S.A. § 8002;

  (B) a home or business energy system on a premises not connected to the electric distribution system of a utility regulated under Title 30 and that otherwise meets the requirements of 30 V.S.A. § 8002(16)(A), (C), and (D); or

  (C) a hot water heating system that converts solar energy into thermal energy used to heat water, but limited to that property directly necessary for and used to capture, convert, or store solar energy for this purpose.

  (47) [Repealed.]

  (48) Sales of tangible personal property sold by an auctioneer licensed under 26 V.S.A. chapter 89, including any buyer’s premium charged by the auctioneer, that are conducted on the premises of the owner of the property, provided that no other person’s property is sold on the auction premises and provided that the property was obtained by the owner, through purchase or otherwise, for his or her own use.

  (49) Clean high carbon bulking agents, as that term is used in the Agency of Natural Resources’ Solid Waste Management Rules, used for commercial or on-farm composting, and food residuals used for commercial or on-farm composting or on-farm energy production.

  (50) Compost, animal manure, manipulated animal manure, and planting mix when any of these items are sold in bulk. As used in this section, the term “sold in bulk” shall mean sold in a form that is not prepackaged, or sold in a packaged form in volumes greater than one cubic yard.

  (51) The following machinery, including repair parts, used for timber cutting, timber removal, and processing of timber or other solid wood forest products intended to be sold ultimately at retail: skidders with grapple and cable; feller bunchers; cut-to-length processors; forwarders; delimbers; loader slashers; log loaders; whole-tree chippers; stationary screening systems; firewood processors, elevators, and screens; and when sold for use on any machinery listed under this subdivision, traction enhancement accessories, tire chains, track systems, and winch cables. The Department of Taxes shall publish guidance relating to the application of this exemption.

  [Subdivision (52) repealed effective July 1, 2024.]

  (52) Advanced wood boilers, as defined in section 9701 of this title.

  (53) Prescription drugs intended for animal use, and durable medical equipment and prosthetics intended for animal use, and veterinary supplies intended for animal use. As used in this subdivision, “prescription drugs intended for animal use” means a drug dispensed only by or upon the lawful written order of a licensed veterinarian, and “veterinary supplies” means tangible personal property therapeutic in nature, not normally used absent illness or injury, and not intended for repeated usage.

  (54) Sales of recyclable paper carryout bags to customers pursuant to 10 V.S.A. § 6693, provided that sales of recyclable paper carryout bags to stores and food service establishments as defined under 10 V.S.A. § 6691 shall not be exempt under this subdivision and shall not be considered sales for resale under subdivision 9701(5) of this title.

  (55) Cannabis and cannabis products, as defined under 7 V.S.A. § 831, sold by any dispensary as authorized under 7 V.S.A. chapter 37, provided that the cannabis or cannabis product is sold only to registered qualifying patients directly or through their registered caregivers.

  (56) Menstrual products. As used in this subdivision, “menstrual products” means tampons, panty liners, menstrual cups, menstrual napkins, and other similar tangible personal property designed for use in connection with the human menstrual cycle but does not include “grooming and hygiene products” as defined in this chapter. (Added 1969, No. 144, § 1, eff. June 1, 1969; amended 1969, No. 263 (Adj. Sess.), § 2, eff. April 6, 1970; 1973, No. 270 (Adj. Sess.), §§ 3-5; 1975, No. 156 (Adj. Sess.), § 2; 1975, No. 243 (Adj. Sess.), § 10(c), eff. May 1, 1976; 1977, No. 62, §§ 1, 2; 1977, No. 86, §§ 2-5; 1977, No. 135 (Adj. Sess.); 1979, No. 105 (Adj. Sess.) § 40; 1981, No. 13, eff. date, see note below; 1981, No. 87, § 21; 1981, No. 172 (Adj. Sess.), § 11d, eff. April 20, 1982; 1985, No. 88, § 1, eff. June 1, 1985; 1985, No. 135 (Adj. Sess.), §§ 1, 2, eff. April 24, 1986; 1985, No. 168 (Adj. Sess.), eff. May 7, 1986; 1985, No. 207 (Adj. Sess.), § 2; 1987, No. 82, § 10, eff. June 9, 1987; 1987, No. 113, § 2, eff. June 26, 1987; 1987, No. 184 (Adj. Sess.), eff. April 1, 1988; 1989, No. 32; 1989, No. 133 (Adj. Sess.), § 1, eff. April 5, 1990; 1989, No. 174 (Adj. Sess.); 1991, No. 32, §§ 13, 27, eff. June 1, 1991; 1991, No. 148 (Adj. Sess.), § 1, eff. May 4, 1992; 1993, No. 89, §§ 14c, 14d, eff. July 1, 1996; 1995, No. 29, § 27, eff. July 1, 1996; 1995, No. 86 (Adj. Sess.), § 3, eff. March 28, 1996; 1997, No. 50, § 45, eff. June 26, 1997; 1997, No. 60, § 72a, eff. June 26, 1997; 1997, No. 60, § 79; 1997, No. 71 (Adj. Sess.), §§ 50-52; 1997, No. 76 (Adj. Sess.), § 1, eff. March 30, 1998; 1997, No. 156 (Adj. Sess.), § 21, eff. April 29, 1998; 1999, No. 49, §§ 34, 34a, 64, 74, 92-94, eff. June 2, 1999; 2001, No. 54, § 1; 2001, No. 138 (Adj. Sess.), § 5, eff. June 21, 2002; 2001, No. 140 (Adj. Sess.), § 35, eff. June 21, 2002; 2001, No. 144 (Adj. Sess.), § 12, eff. January 1, 2003; 2001, No. 145 (Adj. Sess.), § 6, eff. June 21, 2002; 2003, No. 68, § 58, eff. date, see note below; 2003, No. 121 (Adj. Sess.), § 88, eff. June 8, 2004; 2003, No. 152 (Adj. Sess.), § 17, eff. date, see note below; 2005, No. 75, §§ 2, 2b, 22; 2005, No. 184 (Adj. Sess.), § 4; 2007, No. 81, § 7, eff. June 11, 2007, § 7a, eff. July 1, 2011; 2007, No. 164 (Adj. Sess.), § 34; 2011, No. 45, § 36g; 2011, No. 143 (Adj. Sess.), § 49, eff. May 24, 2011; 2011, No. 143 (Adj. Sess.), § 54, eff. Jan. 1, 2012; 2011, No. 143 (Adj. Sess.), § 54a; 2011, No. 153 (Adj. Sess.), § 42, eff. July 1, 2013; 2013, No. 73, § 45, eff. June 5, 2013; 2013, No. 99 (Adj. Sess.), § 9, eff. Jan. 1, 2017; 2013, No. 174 (Adj. Sess.), §§ 36, 46, 49; 2013, No. 200 (Adj. Sess.), § 22; 2015, No. 57, § 92; 2015, No. 100 (Adj. Sess.), § 1; 2015, No. 144 (Adj. Sess.), § 12; 2015, No. 157 (Adj. Sess.), § H.9, eff. Jan. 1, 2017; 2017, No. 73, § 19, eff. Sept. 1, 2017; 2017, No. 75, § 17; 2017, No. 77, § 9; 2017, No. 194 (Adj. Sess.), § 26; 2019, No. 29, § 1, eff. May 23, 2019; 2019, No. 46, § 5; 2019, No. 51, § 39, eff. June 10, 2019; 2019, No. 150 (Adj. Sess.), § 6, eff. July 13, 2020; 2019, No. 164 (Adj. Sess.), § 16, eff. March 1, 2022; 2021, No. 54, § 21, eff. June 3, 2021; 2021, No. 73, § 11a; 2021, No. 179 (Adj. Sess.), § 27, eff. July 1, 2022; 2021, No. 179 (Adj. Sess.), § 27b, eff. June 7, 2022; 2023, No. 72, § 3, eff. June 19, 2023.)

• § 9742. Transactions not covered

  This chapter shall not cover the following transactions:

  (1) [Repealed.]

  (2) the transfer of tangible personal property to a corporation solely in consideration for the issuance of its stock, pursuant to a merger or consolidation effected under the laws of Vermont or any other jurisdiction;

  (3) the distribution of property by a corporation to its stockholders as a liquidating dividend;

  (4) the distribution of property by a partnership to its partners in whole or partial liquidation;

  (5) the transfer of property to a corporation upon its organization in consideration for the issuance of its stock;

  (6) the contribution of property to a partnership in consideration for a partnership interest therein;

  (7) the sale of tangible personal property where the purpose of the vendee is to hold the thing transferred as security for the performance of an obligation of the vendor;

  (8) the sawing of lumber owned by the person requesting the sawing or his agent is not a “fabrication” within the meaning of subdivision 9771(3) of this title;

  (9) the use of waste wood for fuel by a manufacturer in its business, where the waste wood resulted from the manufacturing operations of the manufacturer, and where such wood was purchased by the manufacturer under a claim of the manufacturing exemption provided by subdivision 9741(14) of this title or was grown by such manufacturer; and the giving away without charge of such waste wood by such manufacturer; and

  (10) the sale of telecommunications service to an affiliate of the telecommunications provider. (Added 1969, No. 144, § 1, eff. June 1, 1969; amended 1971, No. 73, § 50, eff. April 16, 1971; 1977, No. 86, § 7; 1983, No. 111 (Adj. Sess.), eff. Feb. 24, 1984; 1997, No. 60, § 80, eff. Sept. 1, 1997.)

• § 9743. Organizations not covered

  Any sale, service, or admission to a place of entertainment charged by or to any of the following or any use by any of the following are not subject to the sales and use taxes imposed under this chapter:

  (1) The State of Vermont, or any of its agencies, instrumentalities, public authorities, public corporations, including a public corporation created pursuant to agreement or compact with another state, or political subdivisions when it is the purchaser, user, or consumer, or when it is a vendor of services or property of a kind not ordinarily sold by private persons, or when it charges for admission to any entertainment, except that sales of alcoholic beverages shall not be exempt from sales tax.

  (2) The United States of America, any of its agencies and instrumentalities, insofar as it is immune from taxation when it is the purchaser, user, or consumer, or when it sells services or property of a kind not ordinarily sold by private persons.

  (3) Organizations that qualify for exempt status under the provisions of 26 U.S.C. § 501(c)(3) and agricultural organizations qualified for exempt status under 26 U.S.C. § 501(c)(5), when presenting agricultural fairs, field days, or festivals, as amended, shall be exempt as follows:

  (A) The organization first shall have obtained a certificate from the Commissioner stating that it is entitled to the exemption. The Commissioner shall issue a certificate to any organization that has received federal certification of Section 501(c)(3) status and may issue a certificate to any other qualified organization.

  (B) Charges for admission to a place of entertainment by and sales to or uses by such organizations shall be exempt from the tax under this chapter.

  (C) Sales other than entertainment charges by qualified Section 501(c)(3) organizations shall be exempt if the organization’s gross sales of tangible personal property and services that would be subject to tax under this chapter but for this subdivision, in the prior year, did not exceed $20,000.00.

  (D) Sales of fresh cut flowers only, by a qualified Section 501(c)(3) organization, during a single annual sales event not to exceed seven days, shall be exempt.

  (4)(A) Sales of building materials and supplies to be used in the construction, reconstruction, alteration, remodeling, or repair of:

  (i) any building structure, or other public works owned by or held in trust for the benefit of any governmental body or agency mentioned in subdivisions (1) and (2) of this section and used exclusively for public purposes;

  (ii) any building or structure owned by or held in trust for the benefit of any organization described in subdivision (3) and used exclusively for the purposes upon which its exempt status is based; and

  (iii) any building or structure owned by any “local development corporation” as defined in 10 V.S.A. § 212(10) and used exclusively for the purposes authorized in 10 V.S.A. chapter 12; provided, however, that the governmental body or agency, the organization, or the development corporation has first obtained a certificate from the Commissioner stating that it is entitled to the exemption, and the vendor keeps a record of the sales price of each separate sale, the name of the purchaser, the date of each separate sale, and the number of the certificate.

  (B) As used in this subdivision, the words “building materials and supplies” include all materials and supplies consumed, employed, or expended in the construction, reconstruction, alteration, remodeling, or repair of any building, structure, or other public work, as well as the materials and supplies physically incorporated therein.

  (5) Organizations that qualify for exempt status under the provisions of 26 U.S.C. § 501(c)(4)-(13) and (19), and political organizations as defined in 26 U.S.C. § 527(e), as the same may be amended or redesignated, other than organizations that qualify for exempt status under the provisions of 26 U.S.C. § 501(c)(4) whose bylaws provide for the contribution of their net income to organizations that qualify for exempt status under the provisions of 26 U.S.C. § 501(c)(3), shall not be exempt from taxation of the sale or use of tangible personal property as defined in section 9701 of this title, but shall be exempt from the sales and use tax upon entertainment charges as defined in section 9701 in the case of not more than four special events (not including usual or continuing activities of the organization) held in any calendar year, and that, in the aggregate, are not held on more than four days in such year, and that are open to the general public. In case the organization holds more than four such special events a year, or such events are held on more than four days in a year, the organization may elect the events or the days to which the exemption provided by this subdivision shall apply, by giving prior notice to the Commissioner. This subdivision shall not apply to agricultural organizations governed by subdivision (3) of this section.

  (6) A school or municipality; provided, however, that a vendor who is required to register with the Commissioner pursuant to section 9707 of this title who receives a share of the proceeds from the sale of property at a school or municipal premises shall collect and remit tax on the total sale price of such sales regardless of who is the direct recipient of the payment. As used in this subdivision, “school” means a school as defined in 16 V.S.A. § 11(7) and (8), and “municipality” means a city, town, unorganized town, village, grant, or gore.

  (7) An exemption under subdivision (3) of this section shall not be available for entertainment charges for admission to a live performance by an organization whose gross sales of entertainment charges by or on behalf of an organization for admission to live performances in the prior calendar year exceeded $100,000.00. (Added 1969, No. 144, § 1, eff. June 1, 1969; amended 1971, No. 73, § 40, eff. April 16, 1971; 1973, No. 165 (Adj. Sess.), eff. March 20, 1974; 1983, No. 62, eff. April 26, 1983; 1983, No. 206 (Adj. Sess.), § 1, eff. April 26, 1984; 1989, No. 222 (Adj. Sess.), § 31, eff. May 31, 1990; 1995, No. 28; 1995, No. 132 (Adj. Sess.), § 1, eff. April 30, 1996; 1997, No. 50, § 35, eff. June 26, 1997; 2009, No. 1 (Sp. Sess.), § H.44; 2009, No. 160 (Adj. Sess.), § 41; 2011, No. 45, § 36; 2021, No. 105 (Adj. Sess.), § 595, eff. July 1, 2022.)

• § 9744. Property exempt from use tax

  (a) The following uses of property are not subject to the compensating use tax imposed under this chapter:

  (1) property used by the purchaser in this State prior to June 1, 1969;

  (2) property purchased and used outside the State by the user while a nonresident of this State, except in the case of tangible personal property that the user, in the performance of a contract, incorporates into real property located in the State;

  (3) property or services to the extent that a retail sales or use tax was legally due and paid thereon, without any right to a refund or credit thereof, to any other state or jurisdiction within any other state but only when it is shown that the other state or jurisdiction allows a corresponding exemption with respect to the sale or use of tangible personal property or services upon which such a sales tax or compensating use tax was paid to this State; to the extent that the tax imposed by this chapter is at a higher rate than the rate of tax in the first taxing jurisdiction, this exemption shall be inapplicable and the tax imposed by section 9773 of this title shall apply to the extent of the difference in the rates;

  (4) property withdrawn from inventory for the purpose of donating such property to an entity described in subdivision 9743(1), (2), or (3) of this title; and

  (5) building materials and supplies stored in this State for 180 days or less, if purchased by a contractor for the construction, reconstruction, alteration, remodeling, or repair of real property in a state which has no sales or use tax;

  (b) A person while engaged in any manner in carrying on in this State any employment, trade, business, or profession, not entirely in interstate or foreign commerce, shall not be deemed a nonresident with respect to the use in this State of property in that employment, trade, business, or profession. (Added 1969, No. 144, § 1, eff. June 1, 1969; amended 1985, No. 88, § 2, eff. May 24, 1985; 1987, No. 251 (Adj. Sess.), § 4; 1995, No. 186 (Adj. Sess.), § 36, eff. May 22, 1996; 2001, No. 144 (Adj. Sess.), § 13, eff. June 21, 2002; 2013, No. 73, § 46, eff. June 5, 2013.)

• § 9745. Certificate or affidavit of exemption; direct payment permit

  (a) Certificate or affidavit of exemption. The Commissioner may require that a vendor obtain an exemption certificate, which may be an electronic filing, with respect to the following sales: sales for resale, sales to organizations that are exempt under section 9743 of this title, and sales that qualify for a use-based exemption under section 9741 of this title. Acceptance of an exemption certificate containing such information as the Commissioner may prescribe shall satisfy the vendor’s burden under subsection 9813(a) of this title of proving that the transaction is not taxable. A vendor’s failure to possess an exemption certificate at the time of sale shall be presumptive evidence that the sale is taxable.

  (b) Direct payment permit. The Commissioner may, in his or her discretion, authorize a purchaser, who acquires tangible personal property or services under circumstances that make it impossible at the time of acquisition to determine the manner in which the tangible personal property or services will be used, to pay the tax directly to the Commissioner and waive the collection of the tax by the vendor through the issuance of a direct payment permit. Any contractor, subcontractor, or repairman who acquires tangible personal property consisting of materials and supplies for use by him or her in erecting structures for others or building on or otherwise improving, altering, or repairing real property of others, may apply for a direct payment permit to pay the tax directly to the Commissioner and waive the collection of the tax by the vendor. No such authority shall be granted or exercised except upon application to the Commissioner and the issuance by the Commissioner of a direct payment permit. If a direct payment permit is granted, its use shall be subject to conditions specified by the Commissioner and the payment of tax on all acquisitions pursuant to the permit shall be made directly to the Commissioner by the permit holder. (Added 1969, No. 144, § 1, eff. June 1, 1969; amended 2003, No. 68, § 59, eff. date, see note below; 2013, No. 174 (Adj. Sess.), § 43.)

• § 9745a. Application to section 9745

  The provisions of section 9745 of this title shall be applicable to exemptions claimed for agricultural fertilizers, pesticides, and machinery and equipment under subdivisions 9741(3) and (25) of this title. (Added 1973, No. 270 (Adj. Sess.), § 7; amended 2001, No. 140 (Adj. Sess.), § 36, eff. June 21, 2002.)

• § 9746. Snowmobile, motorboat, and vessel sales

  (a) If a person sells a snowmobile, motorboat, or vessel and within three months purchases another such vehicle or vessel, “sales price” for purposes of the tax on the new vehicle or vessel shall exclude the lesser of:

  (1) the sale price of the first vehicle or vessel; or

  (2) the average book value at the time of sale of the first vehicle or vessel.

  (b) If a person receives payment under a contract of insurance for:

  (1) total destruction of a snowmobile, motorboat, or vessel; or

  (2) damage to such vehicle or vessel that was then accepted without repair as a trade-in by the seller of a new snowmobile, motorboat, or vessel; and within three months of such destruction or damage the person purchases another snowmobile, motorboat, or vessel, “sales price” for purposes of the tax on the new vehicle or vessel shall exclude the insurance payment and any trade-in allowance for the damaged vehicle.

  (c) A vendor determining sales price under this section shall obtain in good faith from the purchaser, on a form provided by the Department of Taxes and signed by the purchaser and bearing his or her name and address, a certificate of sale or payment of insurance proceeds with regard to the first vehicle or vessel. (Added 1987, No. 251 (Adj. Sess.), § 5; amended 1993, No. 49, § 17, eff. May 28, 1993; 1995, No. 29, § 21, eff. April 14, 1995; 2005, No. 94 (Adj. Sess.), § 9, eff. date, see note below.)

• Subchapter 003: Imposition, Rate, and Payment of Tax

• § 9771. Imposition of sales tax

  Except as otherwise provided in this chapter, there is imposed a tax on retail sales in this State. The tax shall be paid at the rate of six percent of the sales price charged for, but in no case shall any one transaction be taxed under more than one of the following:

  (1) tangible personal property;

  (2) public utility services, including gas and electricity, but excluding water and transportation;

  (3) producing, fabricating, printing, or imprinting of tangible personal property for a consideration for consumers who furnish either directly or indirectly the materials used in the producing, fabricating, printing, or imprinting;

  (4) admission to places of entertainment, including athletic events, exhibitions, dramatic and musical performances, motion pictures, golf courses and ski areas, and access to cable television systems or other audio or video programming systems that operate by wire, coaxial cable, lightwave, microwave, satellite transmission, or by other similar means, and access to any game or gaming or amusement machine, apparatus, or device, excluding video game, pinball, musical, vocal, or visual entertainment machines that are operated by coin, token, or bills;

  (5) telecommunications service, except coin-operated telephone service, paging service, private communications service, or value-added non-voice data service;

  (6) directory assistance;

  (7) tangible personal property to an advertising agency for its use in providing advertising services or creating advertising materials for transfer in conjunction with the delivery of advertising service; or

  (8) specified digital products transferred electronically to an end user regardless of whether for permanent use or less than permanent use and regardless of whether or not conditioned upon continued payment from the purchaser. (Added 1969, No. 144, § 1, eff. June 1, 1969; amended 1981, No. 170 (Adj. Sess.), § 11; 1991, No. 32, § 9, eff. June 1, 1991; 1993, No. 1 (Sp. Sess.), § 1, eff. Sept. 1, 1993; 1997, No. 60, §§ 81, 82, eff. Sept. 1, 1997; 1997, No. 109 (Adj. Sess.), § 3, eff. Sept. 1, 1998; 1997, No. 156 (Adj. Sess.), § 30, eff. April 29, 1998; 1999, No. 49, § 71, eff. June 2, 1999; 2003, No. 68, §§ 31, 60, eff. date, see note below; 2003, No. 152 (Adj. Sess.), § 12; 2003, No. 152 (Adj. Sess.), § 18, eff. date, see note set out below; 2005, No. 75, § 23, eff. July 1, 2005; 2009, No. 1 (Sp. Sess.), § H.41; 2011, No. 143 (Adj. Sess.), § 50, eff. May 15, 2012; 2013, No. 174 (Adj. Sess.), § 42; 2015, No. 134 (Adj. Sess.), § 24; 2017, No. 74, § 140a.)

• § 9771a. Repealed. 2013, No. 200 (Adj. Sess.), § 22(2), eff. January 1, 2015.

• § 9772. Amount of tax to be collected

  (a) For the purpose of adding and collecting the tax imposed by this chapter, or an amount equal as nearly as possible or practicable to the average equivalent thereof, to be reimbursed to the vendor by the purchaser, the vendor shall multiply the total sales price of all the transactions taxable by the rate specified in section 9771 of this title carried to the third decimal place and rounded up to the nearest whole cent if the third decimal point is greater than four and rounded down to the nearest whole cent if the third decimal point is four or less. The tax may be computed on either the total invoice amount or on each taxable item.

  (b) The Commissioner may adopt transition rules that comply with any applicable multistate agreement in the event of a rate change. (1969, No. 144, § 1, eff. June 1, 1969; amended 1971, No. 73, § 41, eff. April 16, 1971; 1981, No. 170 (Adj. Sess.), § 12; 1991, No. 32, § 10, eff. June 1, 1991; 1993, No. 1 (Sp. Sess.), § 2, eff. Sept. 1, 1993; 2003, No. 68, § 32, eff. June 18, 2003; 2003, No. 68, § 62, eff. date, see note below; 2003, No. 152 (Adj. Sess.), § 19, eff. date, see note below; 2009, No. 1 (Sp. Sess.), § H.42.)

• § 9773. Imposition of compensating use tax

  Unless property or telecommunications service has already been or will be subject to the sales tax under this chapter, there is imposed on every person a use tax at the rate of six percent for the use within this State, except as otherwise exempted under this chapter:

  (1) of any tangible personal property purchased at retail;

  (2) of any tangible personal property manufactured, processed, or assembled by the user, if items of the same kind of tangible personal property are offered for sale by him or her in the regular course of business, but the mere storage, keeping, retention, or withdrawal from storage of tangible personal property or the use for demonstrational or instructional purposes of tangible personal property by the person who manufactured, processed, or assembled such property shall not be deemed a taxable use by him or her; and for purposes of this section only, the sale of electrical power generated by the taxpayer shall not be considered a sale by him or her in the regular course of business if at least 60 percent of the electrical power generated annually by the taxpayer is used by the taxpayer in his or her trade or business;

  (3) of any tangible personal property, however acquired, where not acquired for purposes of resale, upon which any taxable services described in subdivision 9771(3) of this title have been performed;

  (4) specified digital products transferred electronically to an end user; and

  (5) telecommunications service, except coin-operated telephone service, private telephone service, paging service, private communications service, or value-added non-voice data service. (Added 1969, No. 144, § 1, eff. June 1, 1969; amended 1973, No. 270 (Adj. Sess.), § 6; 1981, No. 170 (Adj. Sess.), § 13; 1985, No. 165 (Adj. Sess.), § 1, eff. May 5, 1986; 1991, No. 32, § 11, eff. June 1, 1991; 1993, No. 1 (Sp. Sess.), § 3, eff. Sept. 1, 1993; 2003, No. 68, § 33; 2009, No. 1 (Sp. Sess.), § H.43; 2013, No. 174 (Adj. Sess.), § 47.)

• § 9773a. Repealed. 1993, No. 89, § 14b, eff. July 1, 1996.

• § 9774. Rules for computing compensating use tax

  (a) Tangible personal property that has been purchased by a resident of the State outside this State for use outside this State, and subsequently becomes subject to the compensating use tax imposed under this chapter, shall be taxed on the basis of the purchase price of the property, provided however:

  (1) that where a taxpayer affirmatively shows that the property was used outside the State by him or her for more than six months prior to its use within this State, the property shall be taxed on the basis of current market value of the property at the time of its first use within this State, but the value of the property, for compensating use tax purposes, may not exceed its cost; and

  (2) that the compensating use tax on the tangible personal property brought into this State, other than for complete consumption or for incorporation into real property located in this State, and used in the performance of a contract or subcontract within this State by a purchaser or user for a period of less than six months may be based, at the option of the taxpayer, on the fair rental value of the property for the period of use within this State.

  (b) For purposes of subdivision 9773(1) of this title, the tax shall be at the rate under that section, multiplied by the purchase price given or contracted to be given for the property or for the use of the property adjusted in the same manner as is the sales price under the sales tax to arrive at the sales price.

  (c) For purposes of subdivision 9773(2) of this title, the tax shall be at the rate under that section, multiplied by the price at which items of the same kind of tangible personal property are offered for sale by the user.

  (d) For purposes of subdivision 9773(3) of this title, the tax shall be at the rate under that section, multiplied by the purchase price given or contracted to be given for the service, including the consideration for any tangible personal property transferred in conjunction with the performance of the service adjusted in the same manner as is the charge for services under the sales tax to arrive at the sales price. (Added 1969, No. 144, § 1, eff. June 1, 1969; amended 1981, No. 170 (Adj. Sess.), § 14; 1991, No. 32, § 12, eff. June 1, 1991; 1993, No. 1 (Sp. Sess.), § 4, eff. Sept. 1, 1993; 2003, No. 68, § 34, eff. June 18, 2003; 2003, No. 68, § 63, eff. date, see note below.)

• § 9775. Returns

  (a) Except as otherwise provided in this section, every person required to collect or pay tax under this chapter shall, where the sales and use tax liability under this chapter for the immediately preceding calendar year has been, or would have been in cases when the business was not operating for the entire year, $500.00 or less, pay the tax imposed by this chapter in one annual payment on or before the 25th day of January of each year. Every person required to collect or pay tax under this chapter shall, where the sales and use tax liability under this chapter for the immediately preceding calendar year has been, or would have been in cases when the business was not operating for the entire year, more than $500.00 but less than $2,500.00, pay the tax imposed by this chapter in quarterly installments on or before the 25th day of the calendar month succeeding the quarter ending on the last day of March, June, September, and December of each year. In all other cases, except as provided in subsections (e) and (g) of this section, the tax imposed by this chapter shall be due and payable monthly on or before the 25th (23rd of February) day of the month following the month for which the tax is due. Payment by electronic funds transfer does not affect the requirement to file returns. The return of a vendor of tangible personal property shall show such information as the Commissioner may require.

  (b) The Commissioner may permit or require returns to be made covering other periods and upon such dates as he or she may specify. In addition, the Commissioner may require payments of tax liability at such intervals and based upon such classifications as he or she may designate. In prescribing the other periods to be covered by the return or intervals or classifications for payment of tax liability, the Commissioner may take into account the dollar volume of tax involved and conformity with any applicable multistate agreement with respect to sales and use tax laws, as well as the need for insuring the prompt and orderly collection of the taxes imposed.

  (c) The form of returns shall be prescribed by the Commissioner and shall contain such information as he or she may deem necessary for the proper administration of this chapter. The Commissioner may require returns and amended returns to be filed within 20 days after notice and to contain the information specified in the notice.

  (d) Upon the failure of a taxpayer to file any return required under this chapter within 20 days of the date of a notice to the taxpayer under subsection (c) of this section, the Commissioner may petition a judge of the Superior Court in the county wherein the taxpayer resides or has a place of business or, if the taxpayer neither resides nor has a place of business in this State, the Commissioner may petition the Washington Superior Court, and upon the petition of the Commissioner and a hearing, the judge shall issue a citation requiring the taxpayer and, if the taxpayer is a corporation, any principal officer of such corporation to file a proper return in accordance with this chapter, upon pain of contempt. The order of notice upon the petition shall be returnable not later than 20 days after the filing of the petition. The petition shall be heard and determined on the return day or on such day thereafter as the court shall fix, having regard to the speediest possible determination of the case consistent with the rights of the parties. The judgment shall include costs in favor of the prevailing party. The Commissioner’s authority to petition under this subsection is in addition to the Commissioner’s authority under subsection 9777(a) of this title to compute the tax liability of a taxpayer who fails to file a required return or files an incorrect or insufficient return.

  (e) A person who otherwise is required to file returns and pay tax monthly and who, upon annual application to the Commissioner on or before June 1 of each year, demonstrates to the satisfaction of the Commissioner that at least 50 percent of its sales during the immediately preceding calendar year were sales of building materials to contractors for the improvement of real estate, and that those sales were made on credit terms by the person required to collect the tax with an average credit period of at least 40 days, may, upon approval by the Commissioner, file and pay taxes in quarterly installments from July 1 of that year to June 30 of the following year, as provided in subsection (a) of this section. If a person with such approval fails to timely file or pay any such quarterly return and installment, that person’s approval to file quarterly shall be deemed immediately revoked and that person shall thereafter file returns and pay tax monthly as provided in subsection (a) of this section.

  (f) A person registered under the Multistate Streamlined Sales and Use Tax Agreement that does not have a legal requirement to register in this State and is not a Model 1, 2, or 3 seller may file a return within one year of the month of initial registration and may file annual returns in the same month for succeeding years; provided, however, that such person must file a return on the 25th of the month following any month in which the taxpayer accumulated State and local taxes in the amount of $1,000.00 or more.

  (g) A person required to report sales and use tax annually who cancels his, her, or its sales and use tax account shall file a final return not later than 60 days after such cancellation. (Added 1969, No. 144, § 1, eff. June 1, 1969; amended 1975, No. 154 (Adj. Sess.), § 10, eff. date, see note below; 1989, No. 124 (Adj. Sess.), § 3, eff. date, see note below; 1989, No. 222 (Adj. Sess.), § 25, eff. May 31, 1990; 1997, No. 50, §§ 33, 36, eff. June 26, 1997; 1997, No. 60, § 84, eff. Sept. 1, 1997; 1997, No. 156 (Adj. Sess.), § 22, eff. April 29, 1998; 1999, No. 119 (Adj. Sess.), §§ 3, 18, eff. May 18, 2000; 2003, No. 68, § 64, eff. date, see note below; 2005, No. 207 (Adj. Sess.), § 5, eff. date, see note below; 2009, No. 1 (Sp. Sess.), § H.45.)

• § 9776. Payment of tax

  Every person required to file a return under this chapter shall, at the time of filing the return, pay to the Commissioner the taxes imposed by this chapter as well as all other monies collected under this chapter; provided, however, that every person who collects the tax from purchasers of taxable items according to the tax bracket schedule of section 9772 of this title shall be allowed to retain, as partial compensation for services rendered to the State of Vermont in collecting the tax, any amount lawfully collected in excess of the tax imposed by this chapter. Pursuant to section 3110 of this title, the Commissioner may authorize payment by electronic funds transfer. The Commissioner may require payment by electronic funds transfer from any taxpayer who is required by federal tax law to pay any federal tax in that manner or from any taxpayer who has submitted to the Department of Taxes two or more protested or otherwise uncollectible checks with regard to any State tax payment in the prior two years. All the taxes for the period for which a return is required to be filed or for such lesser interval as shall have been designated by the Commissioner shall be due and payable to the Commissioner on the date limited for the filing of the return for that period or on the date limited for such lesser interval as the Commissioner has designated, without regard to whether a return is filed or whether the return that is filed correctly shows the amount of receipts, amusement charges, or the value of property or services sold or purchased, or the taxes due thereon. (Added 1969, No. 144 § 1, eff. June 1, 1969; amended 1989, No. 225 (Adj. Sess.), § 25(b); 1991, No. 186 (Adj. Sess.), § 31, eff. May 7, 1992; 1997, No. 156 (Adj. Sess.), § 23, eff. April 29, 1998; 2021, No. 73, § 8.)

• § 9777. Determination of tax or penalty

  (a) If a return required by this chapter is not filed, or if a return, when filed, is incorrect or insufficient, the amount of tax due shall be determined by the Commissioner from any information available. If necessary, the tax may be estimated on the basis of external indices, such as stock on hand, purchases, rental paid (location, scale of rents or charges, comparable rents or charges, type of accommodations and service), number of employees, or other factors. Notice of the determination shall be given to the person liable for the collection of payment of the tax. The determination shall finally and irrevocably fix the tax 60 days after giving notice of the determination unless the person against whom it is assessed shall apply in writing to the Commissioner for a hearing, or unless the Commissioner of his or her own motion shall redetermine the tax. After the hearing, the Commissioner shall give notice of his or her determination to the person against whom the tax is assessed.

  (b) Assessment of a penalty under subsection 9816(e) of this title shall become fixed unless the person against whom the penalty is assessed shall apply within 60 days of the date of the assessment to the Commissioner for a hearing, or unless the Commissioner on his or her own motion shall redetermine the penalty. After the hearing, the Commissioner shall give notice of the determination to the person against whom the penalty is assessed.

  (c) Notwithstanding subsections (a) and (b) of this section, the Commissioner, if he or she believes the collection from a taxpayer of any deficiency, penalty, or interest to be in jeopardy, may demand, in writing, that the taxpayer pay the deficiency, penalty, or interest forthwith. The demand may be made concurrently with, or after, the notice of deficiency or the assessment of penalty or interest given to the taxpayer under subsection 9777(a) or (b) of this section. The amount of deficiency, penalty, or interest shall be collectible by the Commissioner on the date of the demand, unless the taxpayer files with the Commissioner a bond in an amount equal to the deficiency, penalty, or interest sought to be collected as security for such amount as finally may be determined. (Added 1969, No. 144, § 1, eff. June 1, 1969; amended 1989, No. 222 (Adj. Sess.) § 26, eff. date, see note below; 1991, No. 67, § 20, eff. June 19, 1991; 1991, No. 186 (Adj. Sess.), § 43, eff. May 7, 1992.)

• § 9778. Collection of tax from purchaser

  Every person required to collect the tax shall collect the tax from the purchaser when collecting the price or amusement charge to which it applies. If the purchaser is given any sales slip, invoice, receipt, or other statement or memorandum of the price, or amusement charge paid or payable, the tax shall be stated, charged, and shown separately on the first of the documents given to him or her. The tax shall be paid to the person required to collect it as trustee for and on account of the State. (Added 1969, No. 144, § 1, eff. June 1, 1969.)

• § 9779. Deferred payment sales

  The Commissioner may provide by rule that the tax upon receipts from sales on the installment plan, seasonal sales, or deferred payment sales may be paid on the amount of each deferred payment and upon the date when the payment is received. (Added 1969, No. 144, § 1, eff. June 1, 1969; amended 2021, No. 105 (Adj. Sess.), § 596, eff. July 1, 2022.)

• § 9780. Cancelled sales; returns; uncollectibles

  The Commissioner may provide by rule for the exclusion from taxable receipts, amusement charges of amounts representing sales where the contract of sale has been cancelled, the property returned on the receipt or charge has been ascertained to be uncollectible, or, in the case the tax has been paid upon that receipt or charge, for refund or credit of the tax so paid. (Added 1969, No. 144, § 1, eff. June 1, 1969; amended 2021, No. 105 (Adj. Sess.), § 597, eff. July 1, 2022.)

• § 9781. Refunds

  (a) As provided in this section, the Commissioner shall refund or credit any tax, penalty, or interest erroneously, illegally, or unconstitutionally collected or paid if application to the Commissioner for the refund shall be made within three years from the date the return was required to be filed. The application may be made by a customer who has actually paid the tax. The application may also be made by a person required to collect the tax, who has collected and paid over the tax to the Commissioner, provided that the application is made within three years of the payment to him or her by the customer, but no actual refund of monies shall be made to a person until he or she shall first establish to the satisfaction of the Commissioner, under such regulations as he or she may prescribe, that he or she has repaid to the customer the amount for which the application for refund is made. The Commissioner may, in lieu of any refund, allow credit on payments due from the applicant.

  (b) A person shall not be entitled to a revision, refund, or credit under this section of a tax, interest, or penalty that had been determined to be due pursuant to the provisions of section 9777 of this title where he or she has had a hearing or an opportunity for a hearing as provided in that section or has failed to avail himself or herself of the remedies therein provided. No refund or credit shall be made of a tax, interest, or penalty paid after a determination by the Commissioner made under section 9777 unless it be found that the determination was erroneous, illegal, or unconstitutional, or otherwise improper pursuant to law, in which event refund or credit shall be made of the tax, interest, or penalty found to have been overpaid.

  (c) If the Commissioner determines, on a petition for refund or otherwise, that a taxpayer has paid an amount of tax under this chapter that, as of the date of the determination, exceeds the amount of tax liability owing from the taxpayer to the State, with respect to the current and all preceding taxable periods, under any provision of this title, the Commissioner shall forthwith refund the excess amount to the taxpayer together with interest at the rate per annum established from time to time by the Commissioner pursuant to section 3108 of this title. That interest shall be computed from the latest of 45 days after the date the return was filed or from 45 days after the date the return was due, including any extensions of time thereto, with respect to which the excess payment was made or, if the taxpayer filed an amended return or otherwise requested a refund, 45 days after the date of such amended return or request was filed.

  (d) A person who sells oil subject to the tax imposed by 23 V.S.A. chapter 27 upon which the tax imposed by this chapter has been paid shall be entitled to a refund in the amount of such tax paid pursuant to this chapter. Such refunds shall be claimed in the manner set forth in this section. (Added 1969, No. 144, § 1, eff. June 1, 1969; amended 1975, No. 154 (Adj. Sess.) § 11, eff. date, see note below; 1975, No. 190 (Adj. Sess.) § 1, eff. date, see note below; 1979, No. 105 (Adj. Sess.), § 48; 1981, No. 172 (Adj. Sess.), § 11c; 1983, No. 59, § 6, eff. April 22, 1983; 1997, No. 156 (Adj. Sess.), § 24, eff. April 29, 1998; 2013, No. 73, § 47, eff. June 5, 2013.)

• § 9782. Mobile telecommunications sourcing

  (a) Mobile telecommunications services shall be sourced according to the provisions of the federal Mobile Telecommunications Sourcing Act, 4 U.S.C. §§ 116-126. The definitions and provisions of such Act are hereby incorporated into this section by reference.

  (b)(1) If charges for nontaxable mobile telecommunications service are aggregated with and not separately stated from charges for taxable service, then all charges are subject to taxation, unless the home service provider can reasonably identify nontaxable charges from its books and records kept in the regular course of business. If the home service provider can reasonably identify from its books and records that are kept in the regular course of business the portion of the aggregated charge that is attributable to nontaxable service, only the charges for taxable services are subject to taxation.

  (2) A customer may not rely upon the nontaxability of mobile telecommunications services unless the customer’s home service provider separately states the charges for nontaxable mobile telecommunications services or the home service provider elects pursuant to 4 U.S.C. § 123(c) to provide verifiable data required to support the nontaxability. (Added 2001, No. 144 (Adj. Sess.), § 35, eff. June 21, 2002.)

• § 9783. Repealed. 2011, No. 45, § 37(14), eff. October 1, 2015.

• Subchapter 004: Enforcement and Penalties

• § 9811. Proceedings to recover tax

  (a) Whenever any person required to collect tax shall fail to collect or pay over any tax, penalty, or interest imposed by this chapter or whenever any customer shall fail to pay any tax, penalty, or interest, the Attorney General shall, upon the request of the Commissioner, enforce the payment thereof on behalf of the State in any court of the State or of any other state of the United States.

  (b) As an additional or alternate remedy, the Commissioner may issue a warrant directed to the sheriff of any county commanding him or her to levy upon and sell the real and personal property of any person liable for the tax, which may be found within his or her county, for the payment of the amount thereof, with any penalties and interest and the cost of executing the warrant, and to return the warrant to the Commissioner and to pay to him or her the money collected by virtue thereof within 60 days after the receipt of the warrant. The sheriff shall within five business days after the receipt of the warrant file with the county clerk a copy thereof, and thereupon the clerk shall enter in the judgment docket the name of the person mentioned in the warrant and the amount of the tax, penalties, and interest for which the warrant is issued, and the date when the copy is filed. Thereupon the amount of the warrant so docketed shall become a lien upon the title to and interest in real and personal property of the person against whom the warrant is issued. The sheriff shall then proceed upon the warrant, in the same manner and with like effect as that provided by law in respect to executions issued against property upon judgments of a court of record and, for services in executing the warrant, he or she shall be entitled to the same fees, which he or she may collect in the same manner. If a warrant is returned not satisfied in full, the Commissioner may from time to time issue new warrants and shall also have the same remedies to enforce the amount due thereunder as if the State had recovered judgment therefor and execution thereon had been returned unsatisfied. (Added 1969, No. 144, § 1, eff. June 1, 1969; amended 2017, No. 11, § 63.)

• § 9812. Actions for collection of tax

  (a) Action may be brought by the Attorney General at the instance of the Commissioner in the name of the State to recover the amount of taxes, penalties, and interest due from such vendor, provided such action is brought within six years after the same are due. Such action shall be returnable in the county where the vendor resides, if a resident of the State; and if a nonresident, the action shall be returnable to Washington County. The limitation of six years in this section shall not apply to a suit to collect taxes, penalties, interest, and costs when the vendor filed a fraudulent return or failed to file a return when the same was due.

  (b) The courts of this State shall recognize and enforce liabilities for taxes lawfully imposed by any other state, upon sales and use taxes, which extends a like comity to this State, and the duly authorized officer of that state may sue for the collection of the tax in the courts of this State. A certificate by the Secretary of State of the other state that an officer suing for the collection of a tax is duly authorized to collect it shall be conclusive proof of this authority.

  (c) As used in this section, the words “tax” and “taxes” shall include interest and penalties due under this chapter, and liability for interest or penalties, or both, due under a taxing statute of another state shall be recognized and enforced by the courts of this State to the same extent that the laws of the other state permit the enforcement in its courts of liability for interest or penalties, or both, due under this chapter. (Added 1969, No. 144, § 1, eff. June 1, 1969; amended 1993, No. 49, § 18, eff. May 28, 1993.)

• § 9813. Presumptions and burden of proof

  (a) For the purpose of the proper administration of this chapter and to prevent evasion of the tax hereby imposed, it shall be presumed that all receipts for property or services of any type mentioned in section 9771 of this title are subject to tax until the contrary is established, and the burden of proving that any receipt or amusement charge is not taxable hereunder shall be upon the person required to collect tax.

  (b) The certificate of the Commissioner to the effect that a tax has not been paid; that a return, bond, or registration certificate has not been filed; or that information has not been supplied under this chapter shall be presumptive evidence thereof. (Added 1969, No. 133 § 1, eff. June 1, 1969; amended 2017, No. 74, § 140b.)

• § 9814. Repealed. 1997, No. 156 (Adj. Sess.), § 37, eff. January 1, 1999.

• § 9814a. Criminal penalties

  (a) Any person who knowingly fails to file a return, fails to collect a tax, or fails to remit a tax required under this subchapter shall be imprisoned not more than one year or fined not more than $1,000.00, or both.

  (b) Any person who with intent to evade a tax liability fails to file a return or fails to collect a tax or fails to remit a tax when required under this subchapter shall, if the amount collected or required to be collected is in excess of $500.00, be imprisoned not more than three years or fined not more than $10,000.00, or both.

  (c) Any person filing or causing to be filed, or making or causing to be made, or giving or causing to be given any certificate, affidavit, representation, information, testimony, or statement, required or authorized, that is willfully false, or willfully failing to file a bond, or failing to file a registration certificate and data in connection with it as the Commissioner by rule or otherwise may require, to display or surrender a license as required, or assigning or transferring the license, or willfully failing to charge separately the tax imposed under this chapter or to state the tax separately on any bill, statement, memorandum, or receipt issued or employed by the person upon which the tax is required to be stated separately as provided in section 9778 of this title, or referring or causing reference to be made to this tax in a form or manner other than that required, or failing to keep any records required, shall, in addition to any other penalties under this chapter or elsewhere prescribed, be guilty of a misdemeanor, punishable by a fine of not more than $1,000.00 or imprisonment for not more than one year, or both.

  (d) Any person who knowingly makes, signs, verifies, or files with the Commissioner a false or fraudulent tax return shall be imprisoned not more than one year or fined not more than $1,000.00, or both. Any person who with intent to evade a tax liability makes, signs, verifies, or files with the Commissioner a false or fraudulent tax return shall, if the amount of tax evaded is in excess of $500.00, be imprisoned not more than three years or fined not more than $10,000.00, or both.

  (e) A person who knowingly engages in any business for which registration is required under this chapter without a valid license shall commit a separate offense for each calendar week or part of the week during which the person shall be so engaged. Each offense shall be a misdemeanor and upon conviction for a first offense, a person shall be sentenced to pay a fine of not more than $250.00 or to be imprisoned for not more than 60 days, or both, the fine and imprisonment in the discretion of the court, and for a second or subsequent offense shall be sentenced to pay a fine of not less than $250.00 or more than $500.00 or to be imprisoned for not more than six months, or both, the fine and imprisonment in the discretion of the court. (Added 1999, No. 49, § 65, eff. June 2, 1999; amended 2003, No. 70 (Adj. Sess.), §§ 57, 58, eff. March 1, 2004; 2021, No. 105 (Adj. Sess.), § 598, eff. July 1, 2022.)

• § 9815. Notice and limitations of time

  (a) Any notice under this chapter may be given by mailing it to the person for whom it is intended in a postpaid envelope addressed to that person at the address given in the last return filed by him or her under this chapter or in any application made by him or her or, if no return has been filed or application made, then to any address obtainable. The mailing of the notice shall be presumptive evidence of its receipt by the person to whom addressed. Any period of time that is determined under this chapter by the giving of notice shall commence to run from the date of mailing of the notice.

  (b) The provisions of law relating to limitations of time for the enforcement of a civil remedy shall not apply to any proceeding or action taken by the State or the Commissioner to levy, appraise, assess, determine, or enforce the collection of any tax or penalty under this chapter. However, except in the case of a willfully false or fraudulent return with intent to evade the tax, no assessment of additional tax shall be made after the expiration of more than three years from the later of the date of the filing of a return or the date a return is due; provided, however, that when no return has been filed as provided by law, the tax may be assessed at any time; and further provided that where tax collected under this chapter has been under-reported by 20 percent or more, such tax may be assessed at any time before the expiration of six years from the date of the filing of the return.

  (c) When, before the expiration of the period prescribed herein for the assessment of an additional tax, a taxpayer has consented in writing that the period be extended, the amount of the additional tax due may be determined at any time within the extended period. The period so extended may be further extended by subsequent consents in writing made before the expiration of the extended period. If a taxpayer has consented in writing to the extension of the period for assessment, the period for filing an application for credit or refund pursuant to section 9781 of this title shall not expire prior to six months after the expiration of the period within which an assessment may be made pursuant to the consent to extend the time for assessment of additional tax. (Added 1969, No. 144, § 1, eff. June 1, 1969; amended 1989, No. 119, §§ 11, 15, eff. June 22. 1989.)

• § 9816. Suspension or revocation of certificates; appeal

  (a) The Commissioner may, after notice and hearing, suspend or revoke the license of any person required to collect the tax or may refuse to issue or renew any registration for failure to comply with this chapter or with any pertinent rules adopted under this chapter.

  (b) Any person required to collect the tax aggrieved by a suspension, revocation, or refusal may appeal to any Superior judge within 10 days after written notice of the suspension, revocation, or refusal has been mailed or delivered to the person. The Superior judge or another Superior judge designated by the Chief Superior Judge shall hear the appeal immediately.

  (c) If the appealing person required to collect the tax files with the Superior judge to whom the person appeals a bond running to the State with a surety company authorized to do business in this State as surety in a sum as the Superior judge shall fix, conditioned upon the payment of all taxes due under this chapter and to become due during the pendency of the appeal, then the suspension or revocation shall be inoperative during the appeal.

  (d) On an appeal from the refusal of the Commissioner to issue or renew a certificate of authority, the Commissioner shall issue or renew the registration during the pendency of the appeal if the bond under subsection (c) of this section is filed.

  (e) Upon suspension or revocation, or in the case of an unregistered business, the Commissioner may cause to be posted, at every public entrance of the vendor’s premises, a notice identifying the vendor and the location and informing the public that the vendor has no certificate or the certificate has been suspended or revoked, as the case may be, and that no retail sales or amusement charges may be made at that location. No person shall cover or deface the posted notice, and the posted notice shall not be removed until the certificate is reinstated, or a new certificate is issued for the location, or removal is otherwise authorized by the Commissioner. Whoever violates the terms of this subsection shall be assessed a penalty of $500.00, and the Commissioner shall give notice of such assessment and make demand for payment. (Added 1969, No. 144, § 1, eff. June 1, 1969; amended 1979, No. 181 (Adj. Sess.), § 21; 1991, No. 186 (Adj. Sess.), § 41, eff. May 7, 1992; 1993, No. 49, § 20, eff. May 28, 1993; 1995, No. 29, § 22, eff. April 14, 1995; 1997, No. 50, § 37, eff. June 26, 1997; 2003, No. 70 (Adj. Sess.), § 59, eff. March 1, 2004; 2021, No. 105 (Adj. Sess.), § 599, eff. July 1, 2022; 2021, No. 147 (Adj. Sess.), § 31, eff. May 31, 2022.)

• § 9817. Review of Commissioner’s decision

  (a) Any aggrieved taxpayer may, within 30 days after any decision, order, finding, assessment, or action of the Commissioner made under this chapter, appeal to the Washington Superior Court or the Superior Court of the county in which the taxpayer resides or has a place of business.

  (b) The appeal provided by this section shall be the exclusive remedy available to any taxpayer for review of a decision of the Commissioner determining the liability of the taxpayer for the taxes imposed.

  (c) [Repealed.] (Added 1969, No. 144, § 1, eff. June 1, 1969; amended 1973, No. 193 (Adj. Sess.), § 3, eff. April 9, 1974; 1997, No. 161 (Adj. Sess.), § 24, eff. Jan. 1, 1998; 2011, No. 143 (Adj. Sess.), § 51, eff. May 15, 2012; 2019, No. 51, § 14, eff. June 10, 2019.)

• § 9818. Liens

  If any person required to pay or collect and transmit a tax under this chapter neglects or refuses to pay the same after demand, the amount, together with all penalties and interest provided for in this chapter and together with any costs that may accrue in addition thereto, shall be a lien in favor of the State of Vermont upon all property and rights to property, whether real or personal, belonging to such person. Such lien shall arise at the time demand is made by the Commissioner of Taxes and shall continue until the liability for such sum with interest and costs is satisfied or becomes unenforceable. Such lien shall have the same force and effect as the lien for taxes under chapter 151 of this title, as provided in section 5895 of this title, and notice of such lien shall be recorded as is provided in that section. Certificates of release of such lien shall also be given by the Commissioner as in the case of the aforesaid tax liens. (Added 1973, No. 165 (Adj. Sess.), § 2, eff. March 20, 1974.)

• § 9819. Reallocation of receipts

  (a) Receipts from the tax imposed by this chapter on sales of construction materials used in qualified projects under 24 V.S.A. chapter 76A shall be allocated by the Commissioner of Taxes and paid to the municipality in which the project is located as follows:

  (1) in a municipality in which the population is 7,500 residents or less, all receipts from sales in excess of $100,000.00 of construction materials used in each separate qualified project located in that municipality;

  (2) in a municipality in which the population is greater than 7,500 residents but fewer than 30,000 residents, all receipts from sales in excess of $200,000.00 of construction materials used in each separate qualified project located in that municipality; and

  (3) in a municipality in which the population is more than 30,000 residents, all receipts from sales in excess of $1,000,000.00 of construction materials used in each separate qualified project located in that municipality.

  (b)(1) Beginning in fiscal year 2007, the Vermont Downtown Development Board, established under 24 V.S.A. § 2792, may certify for allocation to municipalities sales tax revenues under this section, so that the total shall not exceed $1,500,000.00, when considered together with the following:

  (A) credits awarded under subsections 5930cc(a) and (b) of this title, concerning qualified historic rehabilitation projects and qualified façade improvement projects; and

  (B) credits awarded under subsection 5930cc(c) of this title, concerning qualified code improvement projects.

  (2) A total annual allocation of no more than 30 percent of these tax credits in combination with sales tax reallocation may be awarded in connection with all of the projects in a single municipality.

  (c) As used in this section:

  (1) “Construction materials” means all materials purchased by the owner or owner’s representative, project manager, construction manager, general contractor, or subcontractor to be incorporated into a qualified project.

  (2) “Qualified project” means expansion or rehabilitation of contiguous real property that is or will be used at the completion of the expansion or rehabilitation as a structure in a downtown development district designated under 24 V.S.A. chapter 76A, but only to the extent that the expansion or rehabilitation becomes an integral component of the real property and the project does not seek qualification for either tax credit authorized under subsection 5930cc(a) or (b) of this title. “Qualified project” also means new construction of contiguous real property that will be used at the completion of the construction as a structure in a downtown development district designated under 24 V.S.A. chapter 76A, but only to the extent that the new construction is compatible with the buildings that contribute to the integrity of the district in terms of materials, features, size, scale and proportion, and massing of buildings.

  (d) The allocation shall be determined as follows:

  (1) The municipality and the owner of the qualified project shall submit to the Board a joint application for a reallocation of the sales taxes generated by the qualified project. The application shall describe the project to be constructed and shall include an estimate of the taxable cost of construction materials that will be used in the qualified project. The estimate shall be based upon the successful bid documents.

  (2) The Board shall review the joint application. If the project meets the requirements of this section and the requested allocation does not exceed the statutory limit set by this section, the Board shall approve the application and forward it to the Commissioner of Taxes who may authorize an allocation up to the approved amount. Fifty percent of the authorized allocation shall be paid to the municipality when construction is 50 percent complete as determined by the Board, and the balance shall be paid after completion of the project.

  (3) Tax revenues allocated to a municipality under this section shall be used by the municipality only for expenditures related to the support of the qualified project that generated those revenues. (Added 1997, No. 71 (Adj. Sess.), § 51a; amended 1997, No. 120 (Adj. Sess.), § 1b; 2001, No. 114 (Adj. Sess.), § 12, eff. May 28, 2002; 2001, No. 114 (Adj. Sess.), § 17, eff. July 1, 2003; 2005, No. 14, § 9; 2005, No. 75, § 13; 2005, No. 183 (Adj. Sess.), § 13.)