Vermont – Certain Room Rentals are Taxable

SALT Report 3090 – The Vermont Department of Taxes released a fact sheet that offers guidance to persons who rent rooms or provide lodging to visitors. The fact sheet advises that anyone who does so may be subject to the meals and rooms tax, just like any other business in the state.

Under Vermont law, sleeping accommodations that are offered to the public for payment, and are operated by a private person, entity, institution, or organization are subject to the meals and rooms tax if the rooms are rented for 15 or more days in a calendar year.  If you meet these conditions you are responsible for collecting and remitting the 9% meals and rooms tax to the Department.  In addition, if you provide meals to your guests and charge them separately, these meals are subject to tax.

However, if you have not been collecting and remitting tax to the Department, you may be subject to audit and up to seven years of unpaid taxes, interest, and penalties.  To avoid this, the Department advises that you take advantage of the Voluntary Disclosure Program.  For those who voluntarily come forward and successfully complete the VDA program, the Department will reduce the look-back period to 3 years, and only impose interest.

The fact sheet also discusses the types of accommodations that are subject to tax, state sales and use taxes, local option taxes, registration, online filing and payment, and record keeping.

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

For Further Information

Vermont Department of Taxes – Fact Sheet #FS-1006