Local option tax (LOT) is a way for municipalities in Vermont to raise additional revenue. A municipality may vote to levythe following 1% local option taxes in addition to state business taxes.Please note: Localoption tax does not apply to the sale or rental of motor vehicles which are subject to the motor vehicle purchase and use tax.
Local Option Sales Tax:6% sales tax + 1% = 7% total tax
Local Option Meals Tax:9% meals tax + 1% = 10% total tax
Local Option Alcoholic BeverageTax:10% alcohol tax + 1% = 11% total tax
Local Option Rooms Tax:9% rooms tax + 1% = 10% total tax
Requesting a Refund for Local Option Tax Charged in Error
What should I do if I was charged Local Option Tax but shouldn’t have been?
Sometimes businesses mistakenly charge customers local option tax. If this happens, the easiest way to get your money back is to contact the business where you made the purchase to request a refund for the tax paid in error.
If the business is unable to provide a refund, you can request a refund directly from the Vermont Department of Taxes by completing and submitting form REF-620, Application for Refund of Vermont Sales and Use Tax, Meals and Rooms Tax, or Local Option Tax. Please enclose a copy of your receipt(s) or invoice with the form.
Local Option Tax Finder
Search for a specific address or town to determine if a Local Option Tax is levied.Open the local option tax finder in new window.
Municipalities that have a 1% Local Option Sales Tax
| Municipality | Effective Date |
|---|---|
| Barre City | October2022 |
| Brandon | October 2016 |
| Brattleboro | July 2019 |
| Burlington | July 2006 |
| City of Essex Junction | October2022 |
| City of Rutland | July 2023 |
| Colchester | October2015 |
| Dover | July 2007 |
| Killington | October2008 (Rescinded as of 7/1/2018) |
| Manchester | April 1999 |
| Middlebury | October2008 |
| Montgomery | October2022 |
| Rutland Town | April 2009 |
| Shelburne | July 2023 |
| St. Albans City | October2020 |
| St. Albans Town | July 2014 |
| South Burlington | October2007 |
| Stowe | July 2023 |
| Stratton | July 2004 |
| Waterbury | July 2024 (Effective beginning 7/01/2024) |
| Williston | July 2003 |
| Wilmington | July 2012 |
| Winhall | July 2010 |
| Winooski | July 2019 |
| Woodstock | July 2024 (Effective beginning 7/01/2024) |
Municipalities that have a 1%Local Option Meals and Rooms Tax and Alcoholic Beverage Tax
| Municipality | Effective Date |
|---|---|
| Brandon | October 2016 |
| Brattleboro | April 2007 |
| Barre City | October 2018 |
| City of Essex Junction | October 2022 |
| Colchester | October 2015 |
| Dover | July 2007 |
| Hartford1 | October2017 |
| Jamaica | July 2023 |
| Killington | October 2008 |
| Londonderry | July 2023 (Rooms), (Added Meals & Alcoholic Beverage - Effective beginning 7/01/2024) |
| Manchester | April 2008 |
| Middlebury | October 2008 |
| Montgomery | October 2022 |
| Montpelier | October2016 |
| Rutland Town | April 2009 |
| Shelburne | July 2023 |
| St. Albans City | October 2020 |
| St. Albans Town | July 2014 |
| South Burlington | October 2007 |
| Stowe | July 2006 |
| Stratton | July 2004 |
| Waterbury | July 2024 (Effective beginning 7/01/2024) |
| Williston | July 2003 |
| Wilmington | July 2012 |
| Winhall | July 2010 |
| Winooski | July 2019 |
| Woodstock | July 2015 |
1The Town of Hartford includes Quechee, White River Junction, West Hartford, and Wilder
Municipalities that have a 1% Local OptionRooms Tax
| Municipality | Effective Date |
|---|---|
| Elmore | July 2021 |
| Wardsboro | October 2023 |
| Westmore | July 2024 (Effective beginning 7/01/2024) |
Municipalities that have a 1% Local OptionMeals Tax and Alcoholic Beverage Tax
| Municipality | Effective Date |
|---|---|
| South Hero | July 2024 (Effective beginning 7/01/2024) |
Please note: The City of Burlington and the City of Rutlandadminister and collect their own local meals, entertainment, lodging, or alcoholic beverage taxes.If you have a business in Burlington or Rutland City,please contact the appropriatecity for information on how to pay and remit the tax.
Contact the City of Burlington:(802) 865-7000
Contact the City of Rutland:(802) 773-1800
How to Calculate and Remit Local Option Tax
As of November 2022, the Vermont Department of Taxes will only accept returns from businesses who collect and report Local Option Tax if they are filed electronically.
Local option tax is calculated as 1% of the taxable (net) sales for each town.A transaction is subject to local option tax if it is subject to the Vermont sales, meals, rooms, or alcoholic beverage tax. Local option tax is “destination-based.” In other words, the tax is collected based on the location where the buyer takes possession of the item or where it is delivered.
All vendors, including out of state vendors, authorized to collect taxes in Vermont are required to collect and remit to the Vermont Department of Taxes all applicable local option taxes for sales that occur in participating municipalities. No additional registration with the Department is necessary.
Although local option tax is levied by the municipality, the Department collects and administers the tax. Vendors who collect this tax file and remit it to the Department along with their electronically filed state taxes.
Form SUT-451,Sales and Use Tax Return
Form MRT-441,Meals and Rooms Tax Return
Be sure to charge, collect, and remit local option tax for applicable purchases in the municipality where the buyer is consuming or taking possession of the item or where the item is being delivered.
