Add Vermont to the list of states trying to put the burden of sales tax onto out-of-state sellers instead of on their residents who shop online. The state apparently wants online merchants to educate its residents about their sales use tax obligations.
Avalara says Vermont is cracking down on remote vendors. In a new blog post, the company, which provides solutions for sales and use tax compliance, wrote:
“Vermont is cracking down on use tax compliance in its continuing effort to obtain more revenue from remote vendors. The state began enforcing its click-through nexus law on December 1, 2015, thereby expanding the number of out-of-state retailers required to collect Vermont sales tax. Now it plans to penalize noncollecting vendors who fail to comply with the state’s use tax notification requirements.”
Merchants who don’t collect the state’s sales tax must notify Vermont buyers that sales or use tax is due on nonexempt purchases and must tell them that they are required by the State of Vermont to remit any use tax owed on their annual tax returns.
More burdensome is the requirement that noncollecting merchants must also provide Vermont buyers who have made $500 or more worth of purchases from them in the previous calendar year with “the total amount paid by the purchaser for Vermont purchases made from the noncollecting vendor in the previous calendar year,” Avalara explained.
Vermont is neighbors with New Hampshire, one of the few states that does not generate revenue through a sales tax.
Note that similar to other online sales tax legislation, Vermont has a small-business provision listed in the Avalara post. Included in the definition of a non-collecting vendor:
“Has either made sales from outside this State to destinations within this State of at least $100,000, or totaling at least 200 individual sales transactions, during any 12-month period preceding the monthly period with respect to which that person’s liability for tax under this chapter is determined.”
Sellers who expect to make 200 sales to Vermont residents, or who generate sales of over $100,000 in the state, should do their homework. Read more about Vermont’s legislation on the Avalara bog at TaxRates.com.
Edited on 6/6/16.