What a way to celebrate Independence day, but with a new tax… Am I the only one to see the irony in initiating a new sales tax right before a celebration for an event that started with a sales tax revolt??
Well, the majority of voters wanted more taxes and so we got it. (Perhaps the city could have asked for more?? Maybe next time they will ask for 2%, 3% or even 6%.)
Business owners such as myself received a letter from the state back in late May informing us of the conditions for charging our customers the new tax.
The Local Option Sales Tax Rules…
- A 1% sales tax will be collected on any sale made by a Burlington vendor that is subject to the statewide 6% sales tax. This is also the case even if the merchandise is shipped or delivered to the customer in another town or the order is taken by a salesperson while he or she is outside of Burlington.
- The tax is also applicable to telecommuncations purchases with a Burlington service address (in towns such as Manchester, Williston and Stratton, this is not the case).
- Persons making amusement charges subject to state sales tax must also collect the local option tax on these charges if the entertainment or recreational facility is in Burlington.
- Utility sales subject to state tax (electricity used commercially and cable TV, for example) are subject to the local option sales tax if the charge is for service provided at a Burlington address.
- Charges for leases or rentals of tangible personal property subject to Vermont sales tax are subject to the local option tax if the property is located in Burlington. The local option sales tax does not apply to either motor vehicles subject to the Purchase and Use tax or to automobile rentals.
- Certain businesses may have temporary locations (for example at a fair or a craft show) from which sales are made. Sales made from such temporary sites are subject to the local option tax if the temporary site is Burlington.
Examples of how the Local Option Sales Tax is applied:
- A customer purchases a tennis raquet at Vendor A’s Burlington store. Vendor A must collect the 6% state sales tax and a the 1% Burlington local option sales tax.
- A customer from Rutland telephones Vendor A’s Burlington store and orders a table which is not in stock. Vendor A directs its supplier to ship the table directly to the customer in Rutland. The sale is subject to the Burlington local Option sales tax. However, if Vendor A were located in Rultand the and customer in Burlington, the sale would not be subject to the local Option sales tax.
- The sale is the same as above except the customer is in Hoosick Falls, New York. The sale is not subject to the local Option sales tax because the statewide tax is not collected on the out-of-state shipment.
- A vendor located in Burlington sets up a temporary location at a craft fair in Rutland. Sales of pillows made from the temporary locatino are not subject to the local Option sales tax. However, if the Vendor were from Rutland and temporary location in Burlington, the sales would be subject to local Option sales tax.
- A salesperson working for a vendor located in Burlington visits a customer in Rutland and sells a wrench from an inventory in his van. This sale is subject to the local Option sales tax. If the vendor were from Rutland and the sale was made in Burlington, local Option sales would not apply. Presence at a customer’s premises is not a “temporary location”.
- An electrical utility sells electricity subject to Vermont sales tax to customers in Burlington and outside Burlington. Local Option sales tax applies to sales where the service is received in Burlington but not to other sales. The location of the utilty’s offices or production or transmission facilities does not affect its responsbility to collect the local Option sales tax.
- A fuel oil dealer has offices in Rutland, from which customer accounts are serviced. A customer contacts the Rutland office to establish accounts, close accounts or to handle issues regarding service or billing. After accounts have been established, fuel is delivered automatically depending on historical consumption patterns and degree days. The dealer has storage facilities in several towns, including one in Burlington. Sales by this vendor are not subject to local Option sales tax, regardless of the location of the customer or the storage facility from which the oil is delivered. However, if the dealer’s offices were in Burlington rather than Rutland, its sales would be subject to local Option sales tax, even if the oil was delivered to a customer in another twon or was delivered from a storage facility in Burlington.
- An operator of a retail business in Burlington acquires a computer from a mail order business outside of Vermont which does not collect sales or Use tax. The computer is subject to the 6% state Use tax. It is not subject to the local Option sales tax.
- An operator of a business in Rutland purchases a computer from a Burlington business. No sales tax is collected because the purchaser holds a direct-pay permit. The transaction is subject to the local Option sales tax and the purchaser must file a local Option sales tax return, reporting and paying the Burlington local Optino sales tax.
- A leasing company located in Rutland collects Vermont sales tax on lease payments for a bulldozer located in Burlington. These payments are subject to the Burlington local Option sales tax. However, if the leasing company were in Burlington and the bulldozer in Rutland, no local Option sales tax would be due.
- A person works out of his home in Burlington. He does not maintain a business office in his home or at any other location. He visits clients at their locations and solicits sales, which his supplier ships directly to his client. Both the supplier and the client are outside of Burlington. The person’s business location is his home in Burlington and these sales are subject to the local Option sales tax.
- A person operates a roller-skating rink in Rutland. (Admission charges to skating rinks are amusement charges subject to Vermont sales tax.) Tickets for admission can be purchased at outlets in Burlington. The local Option sales tax is not collected on the tickets sold from the Burlington outlet. However, if the rink were in Burlington, local Option sales tax is collected regardless of the location of the ticket outlet.
- A vendor in Burlington sells a shirt costing $25 to a customer at the Burlington store. Because of the clothing exemption, no state sales tax and no local option tax is collected.
For more information: http://www.state.vt.us/tax or call 802-828-2551.