The Vermont Statutes Online

Title 32: Taxation and Finance

Chapter 233: SALES AND USE TAX

 

Sub-Chapter 1: General Provisions

§ 9701. Definitions

Unless the context in which they occur requires otherwise, the following terms when used in this chapter mean:

(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;

(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.

(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 which 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 in this State who 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 catalogs, periodicals, advertising flyers, or other advertising by means of print, radio, or television media; or

(iii) by mail, telegraphy, telephone, computer database, cable, optic, microwave, or other communication systems, for the purpose of effecting sales of tangible personal property; provided such person has made sales from outside this State to destinations within this State of at least $50,000.00 during any 12-month period preceding the monthly or quarterly period with respect to which such 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 which, without more, would not constitute nexus for sales tax collection purposes, plus any or all of the following necessary to create or maintain a Worldwide 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;

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

Subdivision (9)(I) effective upon determination of attorney general; see note set out below.

(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 United States Constitution during the tax year in question.

(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) which 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, every recipient of amusement charges. 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; or

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

(20) Deleted.]

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

(22) Deleted.]

(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); and

(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 United States 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 United States Pharmacopeia, official Homeopathic Pharmacopeia of the United States, official National Formulary, or in supplements to any of them; or

(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; and

(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 or tobacco.

(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:

(1) 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;

(2) 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; or

(3) 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; and

(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 audio-visual works, digital audio works, digital books, or ringtones that are transferred electronically.

(A) Digital audio-visual works: means a series of related images which, 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. (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.)

§ 9702. General powers of the Commissioner or Court

(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 such 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;

(4) Publish and maintain, as he or she deems necessary, lists of specific items of tangible personal property which are found to be exempt from tax under section 9741 of this title;

(b) Any examination under oath conducted by the Commissioner may, in his or her discretion, be reduced to writing and willful false testimony therein 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.)

§ 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. Repealed. 1991, No. 186 (Adj. Sess.), § 10(b), eff. May 7, 1992.

§ 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.)

 

Sub-Chapter 2: 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, veterinary supplies, 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) Sales of motor fuels taxed or exempted under 23 V.S.A. chapter 28; provided, however, that 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 taxed or exempted under chapter 225 of this title.

(11) [Repealed.]

(12) Motor vehicle purchases and use taxed under chapter 219 of this title and the transactions exempted therefrom which are listed in section 8911 of this title. Provided however, that notwithstanding subdivision 8911(5), construction, earthmoving, logging, and motorized equipment which 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.

(13) Sales of food, food stamps, purchases made with food stamps, food products, and beverages sold for human consumption off the premises where sold.

(14) Tangible personal property which 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; machinery and equipment for use or consumption directly and exclusively, except for isolated or occasional uses, 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; and devices used to monitor manufacturing machinery and equipment or the product during the manufacturing process. Machinery and equipment used in administrative, managerial, sales, or other nonproduction activities, or used prior to the first production operation or subsequent to the initial packaging of a product, shall not be exempt from tax, unless such uses are merely isolated or occasional or unless the machinery used for initial packaging is also used for secondary packaging as part of an integrated process. Machinery and equipment shall not include buildings and structural components thereof. As used in this subdivision, 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. For the purposes of this subsection, "manufacture" includes extraction of mineral deposits, the entire printing and bookmaking process, and the entire publication process.

(15) Sales of newspapers and sales of tangible personal property which 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 directly and exclusively, except for isolated or occasional uses, 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. 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.

(26) Sales of electricity, oil, gas, and other fuels used in a residence for all domestic use including heating. 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.

Subdivision (29) effective until July 1, 2018; see also subdivision (29) set out below.

(29) Aircraft sold to a person which 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.

Subdivision (29) effective July 1, 2018; see also subdivision (29) set out above.

(29) Aircraft sold to a person which 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 such aircraft.

(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:

Subdivision (39)(i) incentive is not available for new purchases as of January 1, 2007, and is repealed effective January 1, 2017; see note set out below.

(i) in excess of one million dollars in purchase value, which may be reduced to $250,000.00 in purchase value upon approval of the Vermont Economic Progress Council pursuant to section 5930a of this title, used in the construction, renovation or expansion of facilities which are used exclusively, except for isolated or occasional uses, for the manufacture of tangible personal property for sale; or

(ii) in excess of $250,000.00 in purchase value incorporated into a downtown redevelopment project as defined by rule by the Commissioner of Housing and Community Affairs; provided that the municipality is not receiving an allocation of sales tax receipts pursuant to section 9819 of this title.

(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. § 219a;

(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. § 219a(a)(3)(A), (C), (D), and (E); 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.

Subdivision (47) incentive is not available for new purchases as of January 1, 2007, and is repealed effective January 1, 2017; see note set out below.

(47) Sales of new personal computers and included software packages, for use exclusively in the Vermont business and directly in the activities defined in section 5930k of this title, if purchased by a high-tech business as approved by the Vermont Economic Progress Council.

(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. (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.)

§ 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.

(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 which 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 which 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 which 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) Sales of building materials and supplies to be used in the construction, reconstruction, alteration, remodeling, or repair of: (A) 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; (B) 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 (C) 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. In this subdivision, the words "building materials and supplies" shall 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 which 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 which 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 which 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 which, in the aggregate, are not held on more than four days in such year, and which 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 subsection shall apply, by giving prior notice to the Ccommissioner. 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.)

§ 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 which 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.

(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

(a) 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) The Commissioner may, in his or her discretion, authorize a purchaser, who acquires tangible personal property or services under circumstances which 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. The Commissioner shall authorize 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, 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.)

§ 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 which 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.)

 

Sub-Chapter 3: 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 amusement, 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 which 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 services.

(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.)

§ 9771a. Telecommunications services tax limitation

No purchaser or user shall be subject to tax under subdivision 9771(5) of this title in excess of $10,000.00 in any one calendar year. A purchaser may apply to the Commissioner for a refund of tax paid in excess of $10,000.00 or for a direct pay permit to avoid paying tax over $10,000.00. (Added 1997, No. 60, § 83, eff. Sept. 1, 1997; amended 1997, No. 156 (Adj. Sess.), § 29, eff. April 29, 1998; 2003, No. 68, § 61, eff. date, see note below.)

§ 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 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; and

(4) Specified digital products transferred electronically to an end user. (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.)

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

§ 9774. Rules for computing compensating use tax

(a) Tangible personal property which 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.

(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. 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 which 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.)

§ 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 regulation 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.)

§ 9780. Cancelled sales, returns, uncollectables

The Commissioner may provide by regulation 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 uncollectable 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.)

§ 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 which 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 which, 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 which 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.)

[Section 9783 repealed upon determination of attorney general; see note below.]§ 9783. Notice of use tax due

(a) As used in this section:

(1) "De minimis online auction website" means an online auction website that facilitated total gross sales in Vermont in the prior calendar year of less than $100,000.00 and reasonably expects to facilitate total gross sales in Vermont in the current calendar year of less than $100,000.00.

(2) "De minimis retailer" means any noncollecting retailer that made total gross sales in Vermont in the prior calendar year of less than $100,000.00 and reasonably expects total gross sales in Vermont in the current calendar year to be less than $100,000.00.

(3) "Noncollecting retailer" means any retailer not currently registered to collect and remit Vermont sales and use tax who makes sales of tangible personal property, services, and products transferred electronically from a place of business outside Vermont to be shipped to Vermont for use, storage, or consumption and who is not required to collect Vermont sales or use taxes.

(4) "Online auction website" means a collection of web pages on the Internet that allows any person to display tangible personal property, services, or products transferred electronically for sale which are purchased through a competitive process in which a participant places a bid, with the highest bidder purchasing the property, service, or product when the bidding period ends.

(5) "Vermont purchaser" means any purchaser who purchases tangible personal property, services, or products transferred electronically to be shipped or transferred to Vermont.

(b) Each noncollecting retailer shall give notice that Vermont use tax is due on nonexempt purchases of tangible personal property, services, or products transferred electronically and shall be paid by the Vermont purchaser. The notice in this subsection shall be readily visible and contain the information as follows:

(1) The noncollecting retailer is not required and does not collect Vermont sales and use tax;

(2) The purchase is subject to state use tax unless it is specifically exempt from taxation;

(3) The purchase is not exempt merely because the purchase is made over the Internet, by catalogue, or by other remote means;

(4) The State requires each Vermont purchaser to report any purchase that was not taxed and to pay tax on the purchase. The tax may be reported and paid on the Vermont use tax form; and

(5) The use tax form and corresponding instructions are available on the Department of Taxes website.

(c) Notice requirements.

(1) The notice required by subsection (b) of this section to be displayed on a website shall occur on a page necessary to facilitate the applicable transaction. The notice shall be sufficient if the noncollecting retailer provides a prominent linking notice that reads as follows: "See important Vermont sales and use tax information regarding the tax you may owe directly to the State of Vermont." The prominent linking notice shall direct the purchaser to the principal notice information required by subsection (b) of this section.

(2) The notice required in a catalogue by subsection (b) of this section shall be part of the order form. The notice shall be sufficient if the noncollecting retailer provides a prominent reference to a supplemental page that reads as follows: "See important Vermont sales and use tax information regarding the tax you may owe directly to the State of Vermont on page ____." The notice on the order form shall direct the purchaser to the page that includes the principal notice required by subsection (b) of this section.

(3) For any Internet purchase made pursuant to this section, the invoice notice shall occur on the electronic order confirmation. The notice shall be sufficient if the noncollecting retailer provides a prominent linking notice that reads as follows: "See important Vermont sales and use tax information regarding the tax you may owe directly to the State of Vermont." The invoice notice link shall direct the purchaser to the principal notice required by subsection (b) of this section. If the noncollecting retailer does not issue an electronic order confirmation, the complete notice shall be placed on the purchase order, bill, receipt, sales slip, order form, or packing statement.

(4) For any catalogue or telephone purchase made pursuant to this section, the complete notice required by subsection (b) of this section shall be placed on the purchase order, bill, receipt, sales slip, order form, or packing statement.

(5) For any Internet purchase made pursuant to this section, notice on the check-out page fulfills simultaneously both the website and invoice notice requirements of subdivisions (1) and (3) of this subsection. The notice shall be sufficient if the noncollecting retailer provides a prominent linking notice that reads as follows: "See important Vermont sales and use tax information regarding the tax you may owe directly to the State of Vermont." The check-out page notice link shall direct the purchaser to the principal notice required by subsection (b) of this section.

(d) Exemptions and limitations.

(1) If a retailer is required to provide a similar notice for another state in addition to Vermont, the retailer may provide a consolidated notice so long as the notice includes the information contained in subsection (b) of this section, specifically references Vermont, and meets the placement requirements of this section.

(2) A noncollecting retailer may not state or display or imply that no tax is due on any Vermont purchase unless the display is accompanied by the notice required by subsection (b) of this section each time the display appears. If a summary of the transaction includes a line designated "sales tax" and shows the amount of sales tax as zero, this constitutes a display implying that no tax is due on the purchase. This display shall be accompanied by the notice required by subsection (b) of this section each time it appears.

(3) Notwithstanding the limitation in this section, if a noncollecting retailer knows that a purchase is exempt from Vermont tax pursuant to Vermont law, the noncollecting retailer may display or indicate that no sales or use tax is due even if the display is not accompanied by the notice required by subsection (b) of this section.

(4) With the exception of notification on an invoice, the provisions of this section apply to online auction websites.

(5) A de minimis retailer and a de minimis online auction website are exempt from the notice requirements provided by this section.

(6) No criminal penalty or civil liability may be applied or assessed for failure to comply with the provisions of this section. (Added 2011, No. 45, § 36b, eff. May 24, 2011.)

 

Sub-Chapter 4: 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 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.)

§ 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 subdivisions 9771(1), (2), and (3) of this title, and all amusement charges of any type mentioned in subdivision 9771(4) 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.)

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

§ 9814a. Criminal penalties

(a) Failure to file; failure to collect; failure to remit. 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) Failure to file; failure to collect; failure to remit; in excess of $500.00. 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, which is willfully false, or willfully failing to file a bond, or failing to file a registration certificate and such data in connection therewith 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 herein imposed or to state the tax separately on any bill, statement, memorandum or receipt issued or employed by him or her 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 herein 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 thereof during which he or she shall be so engaged. Each such 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, such 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, such 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.)

§ 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 which 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.)