Vermont use tax is a 6% tax you owe on items you use, store, or consume in Vermont when the seller didn’t collect Vermont sales tax at the point of sale.1Vermont General Assembly. Vermont Code 32 – Imposition of Compensating Use Tax It most often comes up with online orders from smaller retailers, purchases made while traveling out of state, and buys from private sellers. Individuals report and pay it once a year on their Vermont income tax return, and for most people the amount is small enough to look up on a table rather than calculate from receipts.
When You Owe Use Tax
The tax applies the moment taxable goods arrive at a Vermont address or you bring them into the state after buying them elsewhere, if Vermont sales tax wasn’t charged.1Vermont General Assembly. Vermont Code 32 – Imposition of Compensating Use Tax It covers tangible personal property purchased at retail: electronics, furniture, tools, appliances, auto parts, and the like. Businesses owe it on the same basis for equipment, machinery, and supplies.
It also reaches specified digital products delivered to an end user, including digital audio and video, e-books, prewritten computer software (downloaded, accessed as SaaS, or on physical media), and ringtones.2Vermont Department of Taxes. Prewritten Computer Software Telecommunications services are generally included.1Vermont General Assembly. Vermont Code 32 – Imposition of Compensating Use Tax Digital photographs are not taxable.
If the seller already collected Vermont sales tax, no use tax is due on that purchase. Check your receipts and order confirmations: a line item for Vermont sales tax means that transaction is already covered.
What’s Exempt
Because use tax mirrors sales tax in scope, anything exempt from sales tax under 32 V.S.A. § 9741 is also exempt from use tax.3Vermont Department of Taxes. Use Tax for Individuals For individual consumers, the exemptions that matter most are:
- Food and food ingredients sold for off-premises human consumption. Prepared restaurant meals are subject to Vermont’s separate meals tax.4Vermont General Assembly. Vermont Code 32 V.S.A. 9741 – Sales Not Covered
- Drugs for human use, durable medical equipment, mobility-enhancing equipment, prosthetic devices, insulin, and medical oxygen.4Vermont General Assembly. Vermont Code 32 V.S.A. 9741 – Sales Not Covered
- Clothing and footwear meant for everyday human wear, with no price cap. Coats, boots, uniforms, formal wear, and baby diapers all qualify.5Vermont Department of Taxes. What Is Taxable and Exempt
- Agricultural inputs including feeds, seeds, plants, livestock, baler twine, and liming materials.4Vermont General Assembly. Vermont Code 32 V.S.A. 9741 – Sales Not Covered
- Casual sales between private individuals, such as a used couch sold through a classified ad.
Items that look like clothing but have a specialized sporting or recreational purpose, like ski boots or football pads, can fall outside the clothing exemption. The Department of Taxes publishes a detailed taxable-and-exempt list for anything in doubt.5Vermont Department of Taxes. What Is Taxable and Exempt
Credit for Sales Tax Paid to Another State
You won’t be taxed twice on the same item. If you already paid sales tax to another state on a purchase you later bring into Vermont, that payment credits against your Vermont use tax.3Vermont Department of Taxes. Use Tax for Individuals If the other state’s rate was 6% or higher, you owe nothing more. If it was lower, you owe Vermont the difference. A $1,000 piece of furniture bought in a state with a 4% rate generates $40 of credit, leaving $20 owed to Vermont. Keep the receipt as proof.
Rate and Local Option Tax
The statewide rate is 6% of the purchase price, including any shipping or delivery charges.3Vermont Department of Taxes. Use Tax for Individuals The base is the price you actually paid or agreed to pay, adjusted for discounts or trade-ins.6Vermont General Assembly. Vermont Code 32 V.S.A. 9774 – Rules for Computing Compensating Use Tax
Some municipalities add a 1% local option sales tax on top. As of 2026, those include Bristol, Fair Haven, Mendon, Morristown, Pomfret, Swanton, Vergennes, and Waitsfield.7Vermont Department of Taxes. Local Option Tax Residents of those towns effectively pay a combined 7%. Towns can adopt or repeal the local option at annual meetings, so the Department of Taxes keeps the list updated.
How to Calculate What You Owe
The Lookup Table for Smaller Purchases
Most people don’t track every small untaxed buy, and Vermont accounts for that. For any individual purchase under $1,000, you can skip the receipt-by-receipt math and use the state’s Use Tax Reporting Table, which sets your estimated liability based on your federal adjusted gross income.3Vermont Department of Taxes. Use Tax for Individuals The amounts are modest:
- AGI up to $20,000: $0
- $20,001 to $40,000: $10 to $15
- $40,001 to $70,000: $20 to $30
- $70,001 to $100,000: $35 to $45
- Over $100,000: 0.05% of AGI or $150, whichever is less
The current year’s table is printed in the Vermont income tax return instructions. It’s a safe harbor, not a precise accounting.
Single Purchases of $1,000 or More
The table doesn’t cover any single item that cost $1,000 or more. For those, multiply the purchase price by 6% (or 7% in a local option town) and add that to the table amount for your smaller purchases.3Vermont Department of Taxes. Use Tax for Individuals A $2,500 laptop from an out-of-state seller that didn’t collect Vermont tax generates $150 of use tax at the state rate, on top of whatever the table says for everything else.
Itemizing Instead
You can always skip the table and calculate exact 6% tax on every untaxed purchase. This is worth doing if your actual untaxed buys come in under what the table assigns for your income, which is common for higher earners who shop mostly at large retailers that already collect Vermont tax.
How to File and Pay
Individuals report use tax on Form IN-111, the Vermont income tax return. The return has a dedicated line for the amount, whether from the table, your itemized math, or a mix of both.3Vermont Department of Taxes. Use Tax for Individuals The filing deadline is April 15, 2026 for the prior tax year.8Vermont Department of Taxes. Filing Season FAQs
If you don’t file a Vermont income tax return, for example as a business entity or a nonresident registering a boat or snowmobile purchased in the state, use Form SU-452, the standalone use tax return.
The Department of Taxes encourages electronic filing through its myVTax portal. ACH bank transfer is free; credit card payments carry a 3% processing fee.9Vermont Department of Taxes. File and Pay Paper returns go to the Department of Taxes in Montpelier and must be postmarked by the deadline. Keep your return and supporting receipts for at least three years.
Penalties for Paying Late
Vermont treats unpaid use tax like any other delinquent tax. Failure to pay triggers a penalty of 5% per month for each month the debt stays outstanding, capped at a 25% civil penalty on the unpaid amount.10Vermont Department of Taxes. Interest and Penalties Interest also accrues at a rate the Commissioner of Taxes sets annually, running from the original due date.
Not filing a return at all carries its own 5% per month penalty. A return filed more than 60 days late picks up a minimum $50 late-filing penalty even if no tax is owed, unless a valid extension was on file.10Vermont Department of Taxes. Interest and Penalties An extension protects you from the filing penalty during that period, but it does not pause interest or the payment penalty if you owe and haven’t paid by April 15.
Deliberately trying to evade use tax can draw a penalty of 100% of the unpaid amount.10Vermont Department of Taxes. Interest and Penalties For most people the realistic concern is compounding, not fraud. A $300 use tax bill ignored for six months grows to $375 before interest.
Why Your Bill Is Probably Smaller Than You Think
Most large online retailers already collect Vermont sales tax at checkout, so your use tax obligation is usually smaller than it would have been a decade ago. After the Supreme Court’s 2018 decision in South Dakota v. Wayfair, states gained authority to require out-of-state sellers to collect once they clear certain sales thresholds. Vermont’s marketplace facilitator rules push this further: when you buy through Amazon, eBay, or Etsy, the platform collects and remits Vermont tax on third-party sales, even for very small sellers.
Use tax now surfaces mostly on purchases from small independent websites, private sellers on forums or social media, items brought home from out-of-state trips, and custom orders from out-of-state craftspeople or manufacturers who aren’t registered in Vermont. Go through those categories once a year, add anything that applies to your table figure or itemized total, and the return line takes care of itself.