This tax is calculated and reported on your Vermont Income Tax Return. You can calculate the exact tax or we will use a table provided by the State of Vermont when we file your taxes.
It is important for you to have a good understanding of use tax because individual taxpayers are responsible for paying this use tax when they file their return. Beware - a release from the State of Vermont Department of Taxes states that one form of enforcement for this use tax will include increased attention to filers who certify that no use tax is due when they file their return.
What is Vermont Use Tax?
Use tax must be paid by the purchaser of an item subject to sales tax in Vermont when tax is not collected at purchase time. This occurs when:
- A purchase is made out of state in a place that does not impose sales tax, such as New Hampshire
- The purchase is made via the internet. Double check online orders to see if the vendor has charged you sales tax already. If not, you will owe Vermont use tax on this purchase.
- A purchase is made in a place which charges sales tax, but less than the 6% rate in Vermont. The purchaser owes the difference between the two rates.
- You purchased an item which is taxable in Vermont from another state or country, and you've had it shipped to Vermont. You aren't going to use the item in Vermont, but it is delivered and stored to your location in Vermont, even briefly. Even though you haven't consumed or used the item in Vermont, you owe use tax on the purchase price plus any delivery charge because you received the item in Vermont.It is important to note that any shipping/handling charges in addition to individual purchases should be included when calculating the amount of use tax owed.
Calculating Use Tax
If you have kept track of all of your untaxed purchases, go ahead and multiply the total amount of all items by 6%. Again, don't forget to include any delivery charges. This 6% will be the amount you owe. You must round the figure to the nearest dollar amount so that it is a whole number.
If you have not kept track of your purchases, the State of Vermont has provided a table which can be used to calculate your liability. This applies to the total of all individual purchases made which are individually under $1,000.00 and is based on income. You can see what this looks like by checking the table to the left.
For all purchases $1,000 or more, you must calculate the exact tax using the 6% rate.
If you make both types of purchases, determine the total use tax by adding the total of use tax you've calculated for all purchases under $1,000 to the exact amount you've calculated for purchases of $1,000 or more.
What does this mean for you?
When we send out the organizers for the 2017 tax year, there will be a place for you to indicate how much Use Tax to include on your tax return or if you would like us to use the table to calculate your tax. If you believe you owe no extra tax, then you can let us know that, too.
Shoot us an email here, or call the Vermont Department of Taxes at (802)828-2865.