Our Dash of SALT Blog provides the most recent developments and changes in state and local tax regulations. Here are the latest updates for Vermont.
May 25, 2026
Vermont Signals Uncertainty on 2025 OBBBA Conformity
Authored by: Bonnie Susmano, JD, MBA and Brian Meier, MSA
The Vermont Department of Taxes has released guidance addressing the potential impact of the OBBBA as the state legislature evaluates whether to affirmatively adopt or reject retroactive conformity for tax years beginning January 1, 2025. In the interim, taxpayers face a strategic decision: file their 2025 returns under current Vermont law, aligned with the Internal Revenue Code as of December 31, 2024, and potentially amend later, or delay filing until legislative action is taken. Those opting to wait may rely on an automatic extension if a federal extension is submitted, while others must file the appropriate Vermont extension forms and remit any expected tax by the original due date.
Importantly, Vermont has clarified that it will not align with certain retroactive federal provisions, including the deduction of domestic research and experimental expenses. Taxpayers are explicitly instructed not to amend prior-year returns (2022–2024) to claim such deductions, signaling a narrower conformity approach. As the legislative outcome remains uncertain, taxpayers should carefully evaluate filing positions and extension strategies while considering evolving guidance.
If you have questions about how state conformity to the OBBBA affects your business, please reach out to a member of the Withum SALT Team.
August 18, 2025
Vermont Updates Local Option Tax Rates
Authored by: Courtney Easterday, MSA and Ryan Schupp
The Vermont Department of Taxes has released an updated list of municipal tax rates, effective July 1, 2025. As part of the update, three municipalities—Hartford, Marlboro, and Montpelier—will begin assessing an additional 1% local option sales tax.
This change reflects the municipalities’ decision to adopt the local option tax to support community services and infrastructure. Businesses operating in these areas should update their point-of-sale systems and ensure compliance with the revised tax rates.
For a complete list of municipal tax rates and further guidance, taxpayers are encouraged to consult the Vermont Department of Taxes website.
If you have questions about how local sales taxes may affect your business, please reach out to a member of the Withum SALT Team.
August 14, 2024
Vermont Repeals Sales Tax Exemption on Cloud Software
Authored by: Brandon Mejia and Penny Sweeting, CPA
On June 17, 2024, the Vermont Legislature repealed the sales and use tax exemption on remotely accessed prewritten computer software (H.B.887). Beginning July 1, 2024, the state’s definition of taxable tangible personal property will include prewritten computer software regardless of how the software is paid for, delivered, or accessed by the consumer. Since 2012, the taxability of software has been in flux in Vermont. First, through a moratorium and, more recently, in 2015, with a change of definition that did not specify how the prewritten software was delivered. The current change clarifies that remotely accessed prewritten software will no longer be considered exempt from sales taxes and is taxed at Vermont’s rate of 6%.
For additional information, please refer to Bill Status H.887 (Act 183).
If you have questions about how states tax digital goods and services, please reach out to a member of the Withum SALT Team.
Disclaimer: Please note this is the information that is readily available at this time, it is subject to change so please consult your Withum tax advisor.
Have Questions or Need Guidance?
For more information on this topic, please contact a member of our team.