Vermont – Business Taxes for Nonprofits

SALT Report 3096 – The Vermont Department of Taxes released a fact sheet that discusses the sales and use tax and meals and rooms tax applicable to nonprofit organizations.

Generally, nonprofits who are exempt from federal income tax under 26 U.S.C. § 501(c)(3), are exempt from Vermont’s sales and use taxes.  However, if a nonprofit has sales of tangible personal property that exceeds $20,000 in the previous year, the nonprofit will be required to collect and remit sales tax on any sales of tangible personal property in the current year.

In addition, admission charges to places of entertainment are exempt from sales tax. However, if the gross sales of admission fees to a live performance exceed $100,000 in the previous year, the nonprofit will be required to collect and remit sales tax on any entertainment charges in the current year.

Lastly, nonprofits are required to pay the Meals and Rooms Tax, unless all three of the following conditions are met:

  • Meals served or rooms rented, are on the nonprofit’s premises
  • The nonprofit is organized and operated exclusively for religious or charitable purposes, and
  • The activity is to support the purpose and activities for which the nonprofit was organized

The provisions in this fact sheet expire on June 30, 2014.

For Further Information

Vermont Department of Taxes – Fact Sheet # FS-1014