Does Vermont Have Sales Tax on Clothing? Exempt vs. Taxable

Vermont does not charge sales tax on clothing. The state’s general sales and use tax rate is 6%, but everyday clothing and footwear are fully exempt under 32 V.S.A. § 9741(45).¹ There is no price cap. A $20 pair of jeans and a $2,000 designer coat are both tax-free. What trips people up is that not everything you wear qualifies as “clothing” under the statute, and the dividing lines matter at the register.

What Counts as Exempt Clothing

Vermont defines clothing as all human wearing apparel suitable for general use.² The phrase “suitable for general use” does the real work. If you could reasonably wear it down the street or to run errands, it’s almost certainly exempt. The statute lists examples that cover most of what fills a closet:

Shirts, pants, coats, jackets, dresses, underwear, and hosiery
Shoes, boots, sneakers, sandals, slippers, and overshoes
Rainwear, scarves, earmuffs, and general-use gloves and mittens
Wedding apparel, formal wear, and neckties
Athletic and nonathletic uniforms
Baby receiving blankets, bathing suits, lab coats, and costumes

Vermont’s exemption is broader than what some neighboring states offer. There’s no threshold above which tax kicks in, and no category of “luxury” clothing that gets treated differently. A basic t-shirt and a full-length coat are treated the same way.

What’s Taxable Even Though You Wear It

Just because you put it on your body doesn’t make it clothing under Vermont tax law. The state separately defines “clothing accessories or equipment” as incidental items worn on the person or in conjunction with clothing, and those are taxed at the full 6%.² Taxable accessories include:

Jewelry and watches
Handbags, wallets, and briefcases
Nonprescription sunglasses
Umbrellas
Barrettes, hair bows, and hair nets
Cosmetics
Wigs and hairpieces

The split can be fine. A belt is exempt clothing, but a belt buckle sold separately is a taxable accessory.³ The same logic applies to patches and emblems sold on their own.

Sport and Recreational Equipment

Athletic and recreational gear sits in its own taxable category. Vermont defines sport or recreational equipment as items designed for human use in an athletic or recreational activity that are not suitable for general use.² The question is always whether the item doubles as everyday wear or works only for a specific activity.

Taxable sport equipment includes cleated or spiked athletic shoes, ballet and tap shoes, sport-specific gloves (baseball, bowling, boxing, hockey, golf), goggles, shin guards, mouth guards, hand and elbow guards, life preservers, and roller and ice skates.³ A pair of running sneakers is exempt because you can wear them anywhere. Football cleats are taxable because nobody wears those to the grocery store. The Vermont Department of Taxes has confirmed in a formal ruling that the “suitable for general use” standard is the one that decides borderline products.⁴

Edge Cases That Catch Shoppers

Costumes and Masks

Full costumes are exempt as clothing, including Halloween costumes bought off the rack.³ A costume mask sold separately is taxable. The statute specifically carves masks sold on their own out of the clothing definition.² A bundled costume with an attached mask stays tax-free; a standalone mask triggers the 6%.

Diapers

Child and adult diapers, including disposable ones, fall under Vermont’s clothing definition and are exempt.² Many states still tax diapers, so Vermont is more generous than average here.

Steel-Toed Boots vs. Other Safety Gear

Steel-toed shoes are explicitly listed as exempt clothing.² People wear them off the job, so they meet the general-use test. More specialized protective equipment like breathing masks, face shields, and helmets is a separate taxable category.¹

Fabric and Sewing Supplies

This one surprises people. Fabric, thread, buttons, lace, yarn, and zippers are all taxable, even though the finished garment would be exempt.³ So are needles, scissors, patterns, and sewing machines. The statute excludes sewing materials and equipment from the clothing definition.² If you sew your own clothes, you pay 6% on every supply run.

Online Orders and Use Tax

The clothing exemption applies to use tax as well as sales tax.⁵ Use tax is what you owe when an out-of-state seller doesn’t collect Vermont tax, most often on online orders. Because clothing is exempt from both sales and use tax, a jacket ordered from any online store stays tax-free regardless of what the retailer does or doesn’t collect.

Accessories and sport equipment ordered online are different. A watch or a pair of ice skates from an out-of-state site still carries a 6% use tax obligation. Most large online retailers now collect Vermont tax automatically. If a seller doesn’t, you’re responsible for reporting and paying the use tax on taxable items when you file your Vermont income tax return.

Local Option Tax

About two dozen Vermont municipalities, including Burlington, Rutland, Stratton, Stowe, and Montpelier, collect an additional 1% local option sales tax under 24 V.S.A. § 138.⁶ The local option tax applies only to transactions already subject to state sales tax.⁷

Because clothing is exempt from state sales tax, it’s also exempt from the local 1%. A sweater in Burlington carries no tax at all. Taxable items like jewelry or handbags run 7% in those municipalities: the 6% state rate plus the 1% local rate. The Vermont Department of Taxes maintains a current list of participating towns if you want to check a specific location.

1
Vermont General Assembly. Vermont Code 32 VSA 9741 – Sales Not Covered
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Vermont General Assembly. Vermont Code 32 VSA 9701 – Definitions
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Vermont Department of Taxes. What is Taxable and Exempt
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Vermont Department of Taxes. Ruling 2010-11 – Taxability of Compression Clothing
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Vermont Department of Taxes. Sales and Use Tax
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Vermont General Assembly. Vermont Code 24 VSA 138 – Local Option Taxes
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Vermont Department of Taxes. Local Option Tax