The Vermont Department of Taxes is starting a crackdown on the state use tax and is offering a penalty-free period for taxpayers to catch up on use tax payments.
When Vermonters buy items on the internet — or by mail or phone — or buy items out of state that will be used in Vermont, they must pay the use tax.
Use tax is not new — it has been in effect since the sales tax was created in 1969. Still, the tax is widely misunderstood.
“Use tax helps our businesses in Vermont compete with online businesses and businesses in states, such as New Hampshire, that do not have a sales tax. It levels the playing field by creating a fair marketplace for our Vermont businesses that have to collect sales tax,” said state Tax Commissioner Kaj Samsom. “We know that any letter from the department can seem intimidating, but we think increasing awareness of this tax is important. If you review the information and determine that you do not owe use tax, then you can simply recycle the letter.”
The letters will illustrate an individual’s history of paying use tax and provide information to determine if use tax was owed in the last three years. The department is also offering a penalty- and interest-free period until Oct. 31 for taxpayers who file and pay before that date.
Information: tax.vermont.gov/individuals/income-tax-returns/use-tax or 828-2865.