The Vermont Statutes Online

Title 32: Taxation and Finance

Chapter 207: Cannabis Excise Tax and Cannabis Sales Tax Revenue

• § 7901. Definitions

  As used in this chapter:

  (1) “Cannabis” has the same meaning as in 7 V.S.A. § 831.

  (2) “Cannabis cultivator” has the same meaning as in 7 V.S.A. § 861.

  (3) “Cannabis product” has the same meaning as in 7 V.S.A. § 831.

  (4) “Cannabis product manufacturer” has the same meaning as in 7 V.S.A. § 861.

  (5) “Cannabis retailer” has the same meaning as in 7 V.S.A. § 861.

  (6) “Cannabis wholesaler” has the same meaning as in 7 V.S.A. § 861.

  (7) “Integrated licensee” has the same meaning as in 7 V.S.A. § 861.

  (8) “Retail sale” or “sold at retail” means any sale for any purpose other than for resale by a cannabis retailer or integrated licensee.

  (9) “Sales price” has the same meaning as in section 9701 of this title. (Added 2019, No. 164 (Adj. Sess.), § 14, eff. March 1, 2022.)

• § 7902. Cannabis excise tax

  (a) There is imposed a cannabis excise tax equal to 14 percent of the sales price of each retail sale in this State of cannabis and cannabis products, including food or beverages.

  (b) The tax imposed by this section shall be paid by the purchaser to the retailer or integrated licensee. Each retailer or integrated licensee shall collect from the purchaser the full amount of the tax payable on each taxable sale.

  (c) The tax imposed by this section is separate from and in addition to the general sales and use tax imposed by chapter 233 of this title. The tax imposed by this section shall not be part of the sales price to which the general sales and use tax applies. The cannabis excise tax shall be separately itemized from the general sales and use tax on the receipt provided to the purchaser.

  (d) The following sales shall be exempt from the tax imposed under this section:

  (1) sales under any circumstances in which the State is without power to impose the tax; and

  (2) sales made by any dispensary as authorized under 7 V.S.A. chapter 37 or any retailer licensed with a medical-use endorsement as authorized under 7 V.S.A. chapter 33, provided that the cannabis or cannabis product is sold only to registered patients directly or through their registered caregivers. A retailer that sells cannabis or cannabis products that are exempt from tax pursuant to this subdivision shall retain information pertaining to each exempt transaction as required by the Commissioner of Taxes. (Added 2019, No. 164 (Adj. Sess.), § 14, eff. March 1, 2022; amended 2023, No. 166 (Adj. Sess.), § 13, eff. June 10, 2024.)

• § 7903. Liability for tax

  (a) Any tax collected in accordance with this chapter shall be deemed to be held by the retailer or integrated licensee in trust for the State of Vermont. Any tax collected under this chapter shall be accounted for separately so as clearly to indicate the amount of tax collected and that the same are the property of the State of Vermont.

  (b) Every retailer or integrated licensee required to collect and remit the tax under this chapter to the Commissioner 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. If the retailer or integrated licensee is a corporation or other entity, the personal liability shall extend to any officer or agent of the corporation or entity who as an officer or agent of the same has the authority to collect and remit tax to the Commissioner of Taxes as required in this chapter.

  (c) A retailer or integrated licensee shall have the same rights in collecting tax from his or her purchaser or regarding nonpayment of tax by the purchaser as if the tax were a part of the purchase price of cannabis or cannabis products and payable at the same time; provided, however, if the retailer or integrated licensee required to collect tax has failed to remit any portion of the tax to the Commissioner of Taxes, the Commissioner of Taxes shall be notified of any action or proceeding brought by the retailer or integrated licensee to collect tax and shall have the right to intervene in such action or proceeding.

  (d) A retailer or integrated licensee required to collect 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 retailer or integrated licensee for tax collected unless the purchaser has provided written notice to a retailer or integrated licensee and the retailer or integrated licensee has had 60 days to respond. (Added 2019, No. 164 (Adj. Sess.), § 14, eff. March 1, 2022.)

• § 7904. Returns; records

  (a) Any retailer or integrated licensee required to collect the tax imposed by this chapter shall, on or before the 25th day of every month, return to the Department of Taxes, under oath of a person with legal authority to bind the retailer or integrated licensee, a statement containing its name and place of business, the total amount of sales subject to the cannabis excise tax made in the preceding month, and any information required by the Department of Taxes, along with the total tax due. Retailers and integrated licensees shall not remit the tax collected to the Department of Taxes in cash absent the issuance of a waiver by the Commissioner of Taxes, and the Commissioner may require that returns be submitted electronically.

  (b) Every retailer and integrated licensee shall maintain, for not less than three years, accurate records showing all transactions subject to tax liability under this chapter. The records are subject to inspection by the Department of Taxes at all reasonable times during normal business hours. (Added 2019, No. 164 (Adj. Sess.), § 14, eff. March 1, 2022.)

• § 7905. Bundled transactions

  (a) Except as provided in subsection (b) of this section, a retail sale of a bundled transaction that includes cannabis or a cannabis product is subject to the cannabis excise tax imposed by this chapter on the entire sales price of the bundled transaction. If there is a conflict with the bundling transaction provisions applicable to another tax type, this section shall apply.

  (b) If the sales price is attributable to products that are taxable and products that are not taxable under this chapter, the portion of the price attributable to the products that are nontaxable is subject to the tax imposed by this chapter unless the retailer or integrated licensee can identify by reasonable and verifiable standards the portion that is not subject to tax from its books and records that are kept in the regular course of business, and any discounts applied to the bundle must be attributed to the products that are nontaxable under this chapter.

  (c) As used in this section, “bundled transaction” means:

  (1) the retail sale of two or more products where the products are otherwise distinct and identifiable, are sold for one nonitemized price, and at least one of the products is or contains cannabis; or

  (2) cannabis or a cannabis product that is provided free of charge with the required purchase of another product. (Added 2019, No. 164 (Adj. Sess.), § 14, eff. March 1, 2022.)

• § 7906. License

  (a) Any retailer or integrated licensee required to collect tax imposed by this chapter must apply for and receive a cannabis retail tax license from the Commissioner for each place of business within the State where he or she sells cannabis or cannabis products prior to commencing business. The Commissioner shall issue without charge a license, or licenses, empowering the retailer or integrated licensee to collect the cannabis excise tax, provided that a retailer’s or integrated licensee’s application is properly submitted and the retailer or integrated licensee is otherwise in compliance with applicable laws, rules, and provisions.

  (b) Each cannabis retail tax license shall state the place of business to which it is applicable and be prominently displayed in the place of business. The licenses shall be nonassignable and nontransferable and shall be surrendered to the Commissioner immediately upon the registrant ceasing to do business in the place named. A cannabis retail tax license shall be separate from and in addition to any licenses required by sections 9271 (meals and rooms tax) and 9707 (sales and use tax) of this title.

  (c) The Cannabis Control Board may require the Commissioner of Taxes to suspend or revoke the tax licenses issued under this section for any retailer or integrated licensee that fails to comply with 7 V.S.A. chapter 33 or any rules adopted by the Board. (Added 2019, No. 164 (Adj. Sess.), § 14, eff. March 1, 2022.)

• § 7907. Administration of the cannabis excise tax

  (a) The Commissioner of Taxes shall administer and enforce this chapter. The Commissioner may adopt rules pursuant to 3 V.S.A. chapter 25 to carry out such administration and enforcement.

  (b) To the extent not inconsistent with this chapter, the provisions for the assessment, collection, enforcement, and appeals of the sales and use tax in chapter 233 of this title shall apply to the cannabis excise tax imposed by this chapter. (Added 2019, No. 164 (Adj. Sess.), § 14, eff. March 1, 2022.)

• § 7908. Statutory purpose

  The statutory purpose of the exemption for cannabis and cannabis products sold by any dispensary as authorized under 7 V.S.A. chapter 37 in subdivision 7902(d)(2) of this title is to lower the cost of medical products in order to support the health and welfare of Vermont residents. (Added 2019, No. 164 (Adj. Sess.), § 14, eff. March 1, 2022.)

• § 7909. Substance misuse prevention funding

  [Subsection (a) effective until July 1, 2025; see also subsection (a) effective July 1, 2025 set out below.]

  (a) Thirty percent of the unexpended and unobligated balance of the Cannabis Regulation Fund that is transferred to the General Fund pursuant to 7 V.S.A. § 845(d)(1), not to exceed $10,000,000.00 per fiscal year, shall be used to fund substance misuse prevention programming in the subsequent fiscal year.

  [Subsection (a) effective July 1, 2025; see also subsection (a) effective until July 1, 2025, set out above.]

  (a) Thirty percent of the revenues raised by the cannabis excise tax imposed by section 7902 of this title, not to exceed $10,000,000.00 per fiscal year, shall be used to fund substance misuse prevention programming in the subsequent fiscal year.

  (b) If any General Fund appropriations for substance misuse prevention programming remain unexpended at the end of a fiscal year, that balance shall be carried forward and shall only be used for the purpose of funding substance misuse prevention programming in the subsequent fiscal year.

  (c) Any appropriation balance carried forward pursuant to subsection (b) of this section shall be in addition to revenues allocated for substance misuse prevention programming pursuant to subsection (a) of this section. (Added 2021, No. 62, § 18, eff. March 1, 2022; amended 2021, No. 185 (Adj. Sess.), § E.240.2, eff. July 1, 2023; 2021, No. 185 (Adj. Sess.), § E.240.6, eff. July 1, 2025.)

• § 7910. Cannabis sales tax revenue; Universal Afterschool and Summer Special Fund

  Notwithstanding 16 V.S.A. § 4025, revenue from the sales and use tax imposed by chapter 233 of this title on retail sales of cannabis or cannabis products in Vermont shall be deposited into the Universal Afterschool and Summer Special Fund established pursuant to 16 V.S.A. § 51. (Added 2023, No. 87 (Adj. Sess.), § 98, eff. March 13, 2024.)