Vermont is Next to Introduce Economic Nexus for Sales Tax

In the continued assault on the physical presence standard generally associated with sales tax nexus, Vermont has recently passed legislation affecting “out-of-state” retailers. 

Similar to the South Dakota legislation recently passed, and taking components of the Colorado reporting requirements, Vermont’s legislation was signed by the Governor on May 25, 2016.  Fortunately, for “out-of-state” retailers, there’s a bit of time before they must follow these new requirements – July of 2017 – or the first day of the first quarter following any overturning of the Quill physical presence standard.

Specifics of the Vermont legislation include:

• A requirement by “out-of-state” retailers to collect and remit the sales tax if they have either $100,000 in sales in the preceding twelve month period; or 200 or more transactions in the same period. 
• Vermont has also adopted notification requirements whereby “out-of-state” retailers must inform their customers of their obligation to self-report the use tax to the state of Vermont in those situations where the retailer does not collect the sales tax. 
• It also requires the retailer to send an annual statement of total sales to any individual or business with more than $500 in receipts over the previous calendar year.