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, including sales to contractors, subcontractors, or repair persons of materials and supplies for use by them in erecting structures or otherwise improving, altering, or repairing real property.

(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 in the main volume.

(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.

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

(20) Repealed.]

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

(22) Repealed.]

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

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

(A) "Clothing" shall include:

(i) aprons, household and shop;

(ii) athletic supporters;

(iii) baby receiving blankets;

(iv) bathing suits and caps;

(v) beach capes and coats;

(vi) belts and suspenders;

(vii) boots;

(viii) coats and jackets;

(ix) costumes;

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

(xi) earmuffs;

(xii) footlets;

(xiii) formal wear;

(xiv) garters and garter belts;

(xv) girdles;

(xvi) gloves and mittens for general use;

(xvii) hats and caps;

(xviii) hosiery;

(xix) insoles for shoes;

(xx) lab coats;

(xxi) neckties;

(xxii) overshoes;

(xxiii) pantyhose;

(xxiv) rainwear;

(xxv) rubber pants;

(xxvi) sandals;

(xxvii) scarves;

(xxviii) shoes and shoelaces;

(xxix) slippers;

(xxx) sneakers;

(xxxi) socks and stockings;

(xxxii) steel-toed shoes;

(xxxiii) underwear;

(xxxiv) uniforms, athletic and nonathletic; and

(xxxv) wedding apparel.

(B) "Clothing" shall not include:

(i) belt buckles sold separately;

(ii) costume masks sold separately;

(iii) patches and emblems sold separately;

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

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

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

(A) briefcases;

(B) cosmetics;

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

(D) handbags;

(E) handkerchiefs;

(F) jewelry;

(G) sunglasses, nonprescription;

(H) umbrellas;

(I) wallets;

(J) watches; and

(K) wigs and hairpieces.

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

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

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

(i) a vitamin;

(ii) a mineral;

(iii) an herb or other botanical;

(iv) an amino acid;

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

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

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

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

(28) "Direct mail" means printed material delivered or distributed by 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.

(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;

(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.

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

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

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

(51) "Planting mix" means material that is:

(A) used in the production of plants; and

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

(52) "Vermiculite" means a lightweight mica product expanded by heat treatment for use in growing media. (Added 1969, No. 144, § 1, eff. June 1, 1969; amended 1975, No. 243 (Adj. Sess.), § 7, eff. May 1, 1976; 1977, No. 86, §§ 1, 6; 1979, No. 105 (Adj. Sess.), § 39, eff. date, see note below; 1983, No. 212 (Adj. Sess.), § 6; 1987, No. 251 (Adj. Sess.), § 3; 1989, No. 119, § 16, eff. June 22, 1989; 1989, No. 210 (Adj. Sess.), § 131b; 1989, No. 222 (Adj. Sess.), § 24; 1991, No. 32, § 40, eff. June 1, 1991; 1991, No. 186 (Adj. Sess.), § 28, eff. May 7, 1992; 1995, No. 86 (Adj. Sess.), §§ 1, 2, eff. March 28, 1996; 1997, No. 60, §§ 76, 77, eff. Sept. 1, 1997; 1999, No. 49, § 62, eff. June 2, 1999; 2001, No. 144 (Adj. Sess.), §§ 30, 33, 34, 38, eff. June 21, 2002; 2003, No. 68, §§ 51-56, eff. date, see note below; 2003, No. 152 (Adj. Sess.), § 16, eff. date, see note below; 2005, No. 75, §§ 21, 24, eff. July 1, 2005; 2005, No. 207 (Adj. Sess.), § 13, eff. May 31, 2006; 2009, No. 1 (Sp. Sess.), § H.40; 2009, No. 160 (Adj. Sess.), § 38, eff. April 1, 2011; 2011, No. 160 (Adj. Sess.), § 39; 2011, No. 45, § 36a, eff. date, see note below; 2013, No. 174 (Adj. Sess.), §§ 41, 44.)


§ 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. Statutory purposes

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

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

(c) The statutory purpose of the exemption for veterinary supplies in subdivision 9741(3) of this title is to lessen the cost of veterinary services in order to support the health and welfare of Vermont animals.

(d) The statutory purpose of the exemption for fuels for railroads and boats in subdivision 9741(7) of this title is to avoid the taxation of fuels for the types of transportation for which public expenditure on infrastructure is unnecessary.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(jj) The statutory purpose of the exemptions for composting materials, compost, animal manure, manipulated animal manure, and planting mix in 32 V.S.A. § 9741(49) and (50) is to support the composting industry, and to further the goals of 2012 Acts and Resolves No. 148. (Added 2013, No. 200 (Adj. Sess.), § 6; 2013, No. 174 (Adj. Sess.), § 45.)


§ 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, but not including fuel sold at retail in free-standing containers, or sold as part of a transaction where a free-standing container is exchanged without a separate charge. 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) effective July 1, 2018 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) effective until July 1, 2018 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 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

(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.

Subdivision (46) effective until January 1, 2017; see also subdivision (46) effective January 1, 2017 set out below.

(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 (46) effective January 1, 2017; see also subdivision (46) effective until January 1, 2017 set out above.

(46) Tangible personal property to be incorporated into:

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

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

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

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.

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

(50) Compost, animal manure, manipulated animal manure, and planting mix when any of these items are sold in bulk. As used in this section, the term "sold in bulk" shall mean sold in a form that is not prepackaged, or sold in a packaged form in volumes greater than one cubic yard. (Added 1969, No. 144, § 1, eff. June 1, 1969; amended 1969, No. 263 (Adj. Sess.), § 2, eff. April 6, 1970; 1973, No. 270 (Adj. Sess.), §§ 3-5; 1975, No. 156 (Adj. Sess.), § 2; 1975, No. 243 (Adj. Sess.), § 10(c), eff. May 1, 1976; 1977, No. 62, §§ 1, 2; 1977, No. 86, §§ 2-5; 1977, No. 135 (Adj. Sess.); 1979, No. 105 (Adj. Sess.) § 40; 1981, No. 13, eff. date, see note below; 1981, No. 87, § 21; 1981, No. 172 (Adj. Sess.), § 11d, eff. April 20, 1982; 1985, No. 88, § 1, eff. June 1, 1985; 1985, No. 135 (Adj. Sess.), §§ 1, 2, eff. April 24, 1986; 1985, No. 168 (Adj. Sess.), eff. May 7, 1986; 1985, No. 207 (Adj. Sess.), § 2; 1987, No. 82, § 10, eff. June 9, 1987; 1987, No. 113, § 2, eff. June 26, 1987; 1987, No. 184 (Adj. Sess.), eff. April 1, 1988; 1989, No. 32; 1989, No. 133 (Adj. Sess.), § 1, eff. April 5, 1990; 1989, No. 174 (Adj. Sess.); 1991, No. 32, §§ 13, 27, eff. June 1, 1991; 1991, No. 148 (Adj. Sess.), § 1, eff. May 4, 1992; 1993, No. 89, §§ 14c, 14d, eff. July 1, 1996; 1995, No. 29, § 27, eff. July 1, 1996; 1995, No. 86 (Adj. Sess.), § 3, eff. March 28, 1996; 1997, No. 50, § 45, eff. June 26, 1997; 1997, No. 60, § 72a, eff. June 26, 1997; 1997, No. 60, § 79; 1997, No. 71 (Adj. Sess.), §§ 50-52; 1997, No. 76 (Adj. Sess.), § 1, eff. March 30, 1998; 1997, No. 156 (Adj. Sess.), § 21, eff. April 29, 1998; 1999, No. 49, §§ 34, 34a, 64, 74, 92-94, eff. June 2, 1999; 2001, No. 54, § 1; 2001, No. 138 (Adj. Sess.), § 5, eff. June 21, 2002; 2001, No. 140 (Adj. Sess.), § 35, eff. June 21, 2002; 2001, No. 144 (Adj. Sess.), § 12, eff. January 1, 2003; 2001, No. 145 (Adj. Sess.), § 6, eff. June 21, 2002; 2003, No. 68, § 58, eff. date, see note below; 2003, No. 121 (Adj. Sess.), § 88, eff. June 8, 2004; 2003, No. 152 (Adj. Sess.), § 17, eff. date, see note below; 2005, No. 75, §§ 2, 2b, 22; 2005, No. 184 (Adj. Sess.), § 4; 2007, No. 81, § 7, eff. June 11, 2007, § 7a, eff. July 1, 2011; 2007, No. 164 (Adj. Sess.), § 34; 2011, No. 45, § 36g; 2011, No. 143 (Adj. Sess.), § 49, eff. May 24, 2011; 2011, No. 143 (Adj. Sess.), § 54, eff. Jan. 1, 2012; 2011, No. 143 (Adj. Sess.), § 54a; 2011, No. 153 (Adj. Sess.), § 42, eff. July 1, 2013; 2013, No. 73, § 45, eff. June 5, 2013; 2013, No. 99 (Adj. Sess.), § 9, eff. Jan. 1, 2017; 2013, No. 174 (Adj. Sess.), §§ 36, 46, 49; 2013, No. 200 (Adj. Sess.), § 22.)


§ 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 Commissioner. This subdivision shall not apply to agricultural organizations governed by subdivision (3) of this section.

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

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


§ 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; direct payment permit

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

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


§ 9745a. Application to section 9745

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


§ 9746. Snowmobile, motorboat, and vessel sales

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

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

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

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

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

(2) damage to such vehicle or vessel 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, including property used to improve, alter, or repair the real property of others by a manufacturer or any person who is primarily engaged in the business of making retail sales of 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 service; or.

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


[Section 9771a repealed effective January 1, 2015.]§ 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; 2013, No. 200 (Adj. Sess.), § 22, eff. Jan. 1, 2015.)


§ 9772. Amount of tax to be collected

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

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


§ 9773. Imposition of compensating use tax

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

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

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

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

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

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


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