Why Vermont Won’t Abolish Sales Tax

There’s a bit of talk in the sales tax world about a new bill filed in the Vermont state legislature a few weeks ago. Vermont Bill H. 439 aims to abolish sales tax within the state’s borders over the course of a three year period in exchange for a payroll tax instead. It’s unlikely that this exchange of taxation types will be passed, however, because of a huge gap in Vermont’s state coffers.

Where the Repeal of Sales Tax in Vermont Started

Nearby New Hampshire is one of only a handful of states that don’t have sales tax. Vermonters, just over the border in the northern part of the state, often travel across the border to shop and avoid sales tax. And that’s exactly what Representative Scott Beck is trying to prevent with his bill that aims to end sales tax in Vermont.

Rep. Scott Beck is from St. Johnsbury, Vermont, a mere 15 minutes from the New Hampshire border. He believes that the capital of Montpelier is out of touch with Vermonters who live on the edges of the state, particularly because of sales tax legislation he believes has “unfairly punished” his hometown and eastern Vermont. It’s easy to see why he’s focused on this issue, considering his constituency.

Why Sales Tax Won’t Go Away in Vermont

Like most other states, Vermont is undergoing significant change in where revenue is coming from. Vermont, like many other states, is seeing a $113 million budget gap. They’re certainly not alone either with 16 other states running in the red in 2015. States aren’t ready to let go of any sources of revenue and are looking for ways to bolster budgets. It’s unlikely sales tax is going anywhere anytime soon in Vermont.

What does that mean for your business? You’ll need to continue to comply with sales tax laws in Vermont, as well as many other states, and possibly start to comply with even more complex and difficult sales tax laws as states start to grapple with crippled budgets.

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