Vermont Meals and Rooms Tax
Many Vermont residents, both in-state and out-of-state, own vacation homes or other properties that they rent to tourists. These rentals are subject to the meals and rooms tax.
Vermont Meals and Rooms Tax is paid by businesses that sell taxable food, lodging, and alcoholic beverages. The tax is collected at the time of sale and remitted to the Department of Taxes. Businesses must register for a meal and room tax license before collecting the tax. In addition to restaurants and hotels, other businesses that are required to collect the meal and rooms tax include caterers, grocery stores that offer prepared foods such as sandwiches and party platters, and auto rental agencies. The meals and rooms tax is a general sales and use tax, so some items that are exempt from other taxes, such as clothing, are subject to the meal and rooms tax.
Local option meals and rooms taxes are also imposed by some municipalities. If you operate a business in or deliver to a municipality with a local meals and rooms tax, you must charge and collect that tax in addition to the state meal and rooms tax. The local option meals and rooms tax rate is 1%. If you sell an item that is exempt from the local option meals and rooms tax, you must present an exemption certificate for purchases of meals or rooms for resale to the buyer at the time of the sale.
Vermont Meals and Rooms Tax Exemptions
Amounts charged for services or facilities, such as use of a swimming pool or exercise room, that are optionally available to hotel occupants at an extra charge do not constitute rent and are not subject to meals and rooms tax provided the charges are separately stated and itemized on the customer’s bill or invoice. In addition, amounts charged for food or drinks for which a gratuity is not mandatory are also exempt from Vermont Meals and Rooms Tax.
How to Pay Vermont Meals and Room Tax?
Any person who owns a business that is required to collect the meals and rooms tax may file returns using myVTax. A user account is free and can be used at multiple locations and for any type of business. For more information, including rates and filing deadlines, visit the department’s Vermont Meals and Rooms Tax Overview page.
