Frequently Asked Questions on
Vermont's Sales Tax Holiday in August 2009

The Vermont Legislature passed a bill calling for a Sales Tax Holiday period in August 2009 and March 2010. The Vermont Tax Department has developed a technical bulletin with rules pertaining to the holiday. The questions and answers below are intended to address basic issues regarding the temporary sales tax exemptions. The Department will periodically update the Frequently Asked Questions section.

Q. What is exempt during the tax holiday?
A. No state or local sales tax applies on these days if all of the following conditions are met:

1. The transaction is a sale of tangible personal property
2. The sale is to individuals for personal use, and
3. The sales price is $2,000 or less.

Q. What is not exempt?
A. The following items are not exempt:

1. Amusement charges (charges for admissions to shows or recreation facilities) and charges for telecommunications services are subject to the sales tax but are not sales of tangible personal property.
2. Purchases by corporations, partnerships or other business entities continue to be taxed. Also, purchases such as building materials purchased by contractors or office supplies used in a business are taxed even if the purchaser is an individual sole proprietor.
3. Purchases of items with selling price over $2,000. In this case the entire charge, including the first $2,000 is subject to tax.

Q, What about automobiles?
A. Automobiles continue to be taxed. The automobile purchase and use tax is a separate tax from the sales tax and is not subject to the holiday.

Q. And sandwiches?
A. The meals and rooms tax applies to sandwiches and certain other prepared food sold in stores. The holiday does not apply to the meals and rooms tax so these items continue to be taxed. The 6% sales tax does apply to beer and wine sold in stores so the holiday will apply to these sales. The holiday does not apply to meals tax on food or alcoholic beverages sold in restaurants and bars.

Q. Some towns have a 1% local option sales tax as well as the state tax. Does the holiday apply to the local tax as well?
A. Yes

Q. I report use tax on purchases I make outside the state that are delivered or brought into Vermont. Does the holiday apply to use tax as well as sales tax.
A. Yes, provided that you purchased the item on July 12 or July 13.

Q. Where are the administrative rules for the holiday?
A. The Department has developed Technical Bulletin #46 which is available on this website.

Q. What appliances are exempt?
A. Purchases of Energy Star qualified appliances subject to the same conditions of the general holiday (the buyer is an individual purchasing for a nonbusiness use and the appliance has a selling price of $2,000 or less.)

Q. What is an “Energy Star” qualified product ?
A. An Energy Star product is a product that meets the energy efficient guidelines set by the United States Environmental Protection Agency and the United States Department of Energy that are authorized to carry the Energy Star label.

Q. Are all Energy Star Products exempt during the holiday?
A. The Department has posted a list of the Energy Star appliances qualifying for the Sales Tax Holiday.

Q. What provision was made for the cost of programming cash registers and computers to correctly compute tax at the point of sale during the holiday?
A. Vendors will be able to claim reimbursement of up to $50. The reimbursement may be less if there are more claims than appropriated money or if the vendor’s cost of programming is less than $50.