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Legislation introduced in the Vermont House of Representatives, H.B. 564, on January 8, 2008, proposes to withdraw the state from the Streamlined Sales Tax Agreement, effective January 1, 2009. Vermont became a full member on January 1, 2007. In addition, the bill also proposes to repeal most sales and use tax exemptions, including the repeal of food exemption, extend the sales tax to services and groceries, exempt items priced at $10.00 or less, lower the rate from 6% to 1%, and require a supermajority vote to increase the rate. (H.B. 564, as introduced in the Vermont House of Representatives on January 8, 2008)


In a Formal Ruling by the Vermont Department of Taxes, specially designed warehouse racking systems were found to be subject to Vermont sales and use tax. In this circumstance, a racking system was designed and manufactured by an out-of-state company and then installed in a Vermont warehouse by an installation company. The state found that the installer was a contractor making improvements to real property and the installer was subject to use tax on the basis of the materials used to make the racking system. (Vermont Formal Ruling 2007-02, March 5, 2007)


Vermont became a full member of the SST Governing Board on January 1, 2007. However, recent legislation has been introduced that, if enacted, would repeal conforming changes and force the state to withdraw from the SST Agreement. (H.B. 244, February 5, 2007)


In a Formal Ruling, the Vermont Department of Taxes discussed which products they consider to qualify as “veterinary supplies,” which are exempt in the state. The exemption is limited to supplies which are directly used in the treatment of animals by a veterinarian. The product-based (not use-based) exemption of these items included examples such as surgical gloves, sterilization equipment, bandages, syringes and medications. Items such as collars, toys, bowls, food and other such products do not qualify under the exemption. (Formal Ruling 2006-04, Vermont Department of Taxes, September 2006)


Vermont was accepted as an associate member of the Streamlined Sales and Use Tax Governing Board. Provided it completes all certified service provider (CSP) certification requirements by January 1, 2007, it will become a full member state as of that date. (Tax Day #S.1, September 5, 2006)



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