Officials outline Vermont sales, meals and rooms taxes and recent changes

At a luncheon workshop hosted by the Ways & Means Committee and the Joint Fiscal Office, state tax experts reviewed how Vermont’s consumption taxes work, what they fund and several recent legal and statutory changes affecting online and platform-based sellers.

The presentation, led by Kirby Keaton of the Office of Legislative Counsel and Ted Barnett of the Joint Fiscal Office, covered the sales-and-use tax base, exemptions, the role of use tax, the impact of the U.S. Supreme Court’s Wayfair decision on remote sellers and marketplace facilitators, changes to taxation of remotely accessed software, and a short-term-rental surcharge that allocates additional revenue to the education fund.

Keaton framed the technical starting point: “we're gonna talk about consumption taxes,” then summarized the sales-and-use tax base and exemptions. “The tax rate for the sales tax in Vermont is 6%,” he said, and noted that some municipalities may add a 1% local option tax. Keaton added that Vermont has “more than 50, I think maybe more than 60 sales and use tax exemptions,” and warned that the exemptions make the area “a pretty complex area of the tax code.”

Why this matters: Ted Barnett said consumption taxes are a significant revenue source, estimating “consumption taxes overall in that bridal bin is $1,340,000,000 estimated in fiscal year 25. That's about 26% of overall revenue collection by the state.” Barnett and Keaton emphasized that a sizable share of…