Free guide for contractors
Do contractors charge sales tax in Vermont?
General information, not tax advice. Tax rules change and depend on the details of each job. Confirm how they apply to your business with your accountant or the state's revenue department before relying on them.
VT Vermont
Usually no tax on the invoiceNo, for real property work. Vermont contractors pay tax on their materials and may not itemize sales tax on the invoice.
In Vermont, sales of materials to contractors and repair persons for building, improving, altering or repairing real property are retail sales, so the contractor pays the tax as the consumer. When the materials are incorporated into buildings and structures, the contractor does not charge sales tax to the customer.
A contractor may not itemize sales tax on its invoice. It may state that it has paid the applicable Vermont taxes on materials.
A manufacturer or retailer doing real property work is treated as a contractor unless it elects retailer treatment under 32 V.S.A. § 9711. The election is filed 30 days ahead and binds for five years, and under it the business collects tax from the customer.
It turns on: whether the business has elected retailer treatment; whether the materials are incorporated into real property.
Watch out for
- Materials for buildings owned by, or held in trust for, a 501(c)(3) organization and used for its exempt purpose are exempt, claimed with Form S-3C; property the organization only leases does not qualify (Vermont Department of Taxes, Contractors).
- Some municipalities add a 1% local option tax to the state sales tax (Vermont Department of Taxes, Contractors).
“the contractor should not charge sales tax to the customer”Vermont Department of Taxes, Contractors