Vermont – Guidance Regarding Permanent Installations in Homes and Businesses

SALT Report 3097 – The Vermont Department of Taxes issued an advisory regarding the sales and use tax responsibilities of manufacturers, sellers, and contractors who purchase items that will be permanently installed in a home or business.

In Vermont, contractors are not authorized to use resale exemption certificates; therefore they must pay sales tax at the time of purchase, and then pass the tax along to their customers.  The contractors must include language that states that they have paid all Vermont taxes on the materials used for the job on their invoice.  If a person is acting as both the seller and the contractor, the person must pay use tax. However, the use tax would be treated in the same manner as the sales tax and reflected in the price charged to the customer.

Retailers are advised that if an item is being sold without installation, then the retailer is required to collect and remit sales tax from their customer.  If the item is sold with installation by the manufacturer/wholesaler, use tax should be paid by the manufacturer/wholesaler on the price of the item.  In this situation, the retailer’s price should reflect the installed price, which includes the amount of use tax remitted by the manufacturer/wholesaler; the retailer should collect no additional tax.

For Further Information

Vermont Department of Taxes – Fact Sheet #FS-1005