Q. What is exempt on the Sales Tax Holiday?

A. Sales of items of tangible personal property costing $2,000.00 per item or less purchased for personal use are exempt from Sales and Use tax and Local Option Sales Tax on the Sales Tax Holiday. 

Q. What is not exempt on the Sales Tax Holiday?

1.  Items which are not considered tangible personal property:
     A.  Amusement charges (charges for admissions to shows or recreation facilities)
           and season passes for ski resorts.
     B.  Charges for telecommunications services
     C.  Charges for cable television services
     D.  Digital downloads of music, movies and books.

2.  Purchases by corporations, partnerships or other business entities are not exempt on the Holiday.  Building materials purchased by contractors and office supplies used in a business are taxed even if the purchaser is an individual sole proprietor.

3.  Purchases of items with a selling price above $2,000.00.  The entire purchase price becomes taxable when the item is priced above $2,000.00.
 
Q. Are automobiles exempt from sales tax on the Sales Tax Holiday?

A. No.  Automobiles are subject to the Motor Vehicle Purchase and Use Tax which is a separate tax from the Sales Tax and is not a part of the Holiday.

Q. Are beer, wine and liquor exempt from tax on the Sales Tax Holiday?

A. Yes.  Beer, wine and liquor sold in stores is subject to Sales Tax and Local Option Sales Tax, so the Holiday will apply to these sales. The Sales Tax Holiday does not apply to the Meals and Rooms Tax.  Alcoholic beverages sold in restaurants and bars remain taxable on the Sales Tax Holiday.

Q.  Are sandwiches and prepared food sold in stores exempt from tax on the Sales Tax Holiday?

A. No.  Sandwiches and prepared foods sold in stores are subject to the Meals and Rooms Tax.  The Sales Tax Holiday does not apply to the Meals and Rooms Tax.  Prepared foods, including sandwiches sold either in stores or restaurants, remain taxable on the Sales Tax Holiday.

Q. Does the Sales Tax Holiday apply to Local Option Sales Tax as well?

A. Yes.  Qualifying items which are exempt from Sales and Use Tax on the Holiday will be exempt from Local Option Sales Tax, also.

Q. Does the Holiday apply to use tax on items purchased outside of Vermont that are delivered or brought into the state?

 A. Yes, provided that the items are purchased on the Sales Tax Holiday.

Q. Where are the administrative procedures for the Holiday?

A. Technical Bulletin #46 which is available on our website.

Q. What provision was made for the cost of reprogramming cash registers and computers to correctly compute tax at the point of sale during the Holiday?

A. Vendors will be able to claim a reimbursement of up to $50.00 for the two scheduled Sales Tax Holidays.  The amount of the reimbursement for the two Sales Tax Holidays cannot exceed:  the actual cost of the reprogramming; $50.00; or the $10,000.00 fund authorized by the Legislature divided by the total number of qualified vendor applicants for the August, 2009 and March, 2010 Sales Tax Holidays combined.

Q.  Do items ordered by mail, telephone, e-mail or over the internet qualify for the Holiday?

A.  Yes.  The Sales Tax Holiday includes purchases of qualified items sold via mail, telephone, e-mail or internet if the customer orders and pays for the item on the Sales Tax Holiday, even if delivery is made after the Holiday ends.

Q.  Can a customer use a manufacturer's coupon or rebate offer to reduce the sales price of an item for purposes of determining whether an item falls under the $2,000 threshold on the Sales Tax Holiday?

A.  A manufacturer’s or third party coupon does not reduce the sales price of an item.  Manufacturers’ coupons cannot therefore, be used to reduce the sales price of an item below the $2,000.00 threshold in order to qualify for the exemption.  Store coupons and discounts, however, do reduce the sales price of an item and can be used to reduce the sales price of an item below the $2,000.00 threshold. 

Q.  Where should vendors report their sales from the Sales Tax Holiday on their Sales Tax return?

A.  Vendors should report their sales of qualifying items which are exempt on the Sales Tax Holiday on Line 2 of Form SU-451 – Nontaxable Sales.

Q.  Do items placed on layaway qualify for the exemption on the Sales Tax Holiday? 

A.  Yes.  If a customer makes the final payment for a layaway sale and takes possession of a qualifying item on the Holiday, the item will be exempt from sales tax.  OR  If the customer selects a qualifying item and the vendor accepts the item on the Holiday for immediate delivery upon full payment, the item will be exempt from sales tax.  The delivery can be made after the Sales Tax Holiday.