Vermont Local Option Taxes by Town: 50 Municipalities Add 1 Percent, and Burlington and Rutland City Run Their Own

If you sell food, drinks, lodging, or taxable goods in Vermont, the town where you operate may add a 1% local option tax on top of the state rate. About 50 of Vermont's 256 municipal subdivisions have approved at least one, but they do not all charge the same taxes. Two cities, Burlington and Rutland City, also collect some of their own local taxes outside the standard Department of Taxes process. This guide shows you how to check your town, find the rate that applies to each sale, and file correctly.

Informational only. This article is general information about Vermont local option taxes. It is not legal or tax advice. Rates, effective dates, and town lists change, especially after Town Meeting Day. Confirm every figure with the Vermont Department of Taxes and your town or city, and talk with a qualified CPA or attorney before you make decisions about your business.

Materials You Need

• The business address and the address of every location you sell from. Local tax follows the place where the buyer takes possession or delivery, so the address decides the answer.
• A list of what you sell, sorted into goods, services, prepared food and drink, alcohol, and lodging. Vermont's sales tax reaches goods and a short list of items, so this sorting matters.
• Your Vermont Department of Taxes account number, if you already have one. If you do not, register at tax.vermont.gov/business/register before you file your first return.
• Access to the Department of Taxes website at tax.vermont.gov, including its Local Option Tax Finder.
• Phone numbers for your town clerk. For Burlington, call 802-865-7000. For Rutland City, call 802-773-1800.
• Your most recent return, if you already file. Returns that carry local tax are filed electronically on Form SUT-451 for sales and Form MRT-441 for meals, alcohol, and rooms.

Step 1: Confirm Your Town Is on the List

Start with the Local Option Tax Finder on the Department of Taxes site. Enter your address, and it will show whether your location has a local option tax and which taxes apply. Save or print the result along with the date you checked, because the list changes after each Town Meeting Day.

The Department list shows only approved rows. A town whose vote failed will not appear, and neither will a town whose vote is still pending. If you are unsure, call the Department of Taxes or the town clerk before you assume the tax does or does not apply.

Step 2: Learn the Combined Rates

A town may adopt up to three separate 1% taxes: sales, meals and alcoholic beverages, and rooms. Added to the state rates, the totals are:

Tax	State rate	With local option	What it covers
Sales	6%	7%	Goods and a short list of taxable items
Meals	9%	10%	Prepared food, coffee, bakery items eaten on the spot, and catering
Alcohol	10%	11%	Alcoholic beverages sold under the meals and alcohol tax
Rooms	9%	10%	Lodging, plus the 3% short-term rental surcharge on top

The 3% short-term rental surcharge sits on top of the rooms rate. For example, a whole-unit short-term rental night in Stowe carries 9% state rooms tax, 3% surcharge, and 1% local tax, for a total of 13%.

Step 3: Sort Each Sale Into the Right Tax

Vermont's 6% sales tax applies to goods and a short list of items, and it reaches almost no services. Labor by handymen, lawn care providers, towing companies, and junk haulers is not taxed. Contractors pay sales tax on the materials they buy and do not charge it to customers.

Prepared food falls under the 9% meals and rooms tax, not sales tax. Coffee, bakery items eaten on the spot, and catering are included. In a town with the local meals tax, the rate becomes 10%.

For a resale purchase, the buyer gives you Form S-3. Your own sales tax account number does not replace it. Motor vehicle sales and rentals taxed under the purchase and use tax are not subject to the local option tax.

Step 4: Handle Burlington and Rutland City Separately

Burlington and Rutland City do not follow the standard town process. Burlington is on the state list for sales only, with a 1% local sales tax since July 2006. Its city gross receipts taxes are administered by the city. As of July 1, 2026, those rates are: meals 2.5%, alcohol 2.5%, amusements 2.5%, short-term rental 9%, and hotel 4%. A Burlington restaurant meal therefore carries 9% state meals tax plus 2.5% city gross receipts tax, for a total of 11.5%. The 10% and 11% figures in the table above do not apply in Burlington.

Rutland City is on the state sales list, effective July 2023. The city also administers its own local meals, entertainment, lodging, or alcohol taxes. Call 802-773-1800 to confirm current rates and filing steps.

St. Albans City appears on the Department table with sales and meals, alcohol, and rooms rows dated October 2020. It is not one of the two self-collecting cities, so use the Department of Taxes for its current rates.

Step 5: File Through the Department of Taxes

For towns on the Department list, the Department collects the local tax with your state return. Filing is electronic. The Department deducts a $5.96 fee per return, which is split 75% to the municipality and 25% to the State. Before your next filing period, confirm that your account is active and that your point-of-sale system charges the combined rate for each location.

Step 6: Watch for Changes

Towns add these taxes by vote. The town's legislative body must recommend the tax, and voters must approve it by majority at an annual or special meeting warned for that purpose. The tax takes effect the next tax quarter after 90 days' notice to the Department. Municipalities receive 75% of the collected tax each quarter, and that money pays for municipal services, not education. Voters can rescind a tax by majority vote at a warned meeting, on the board's recommendation, or by a petition signed by 10% of voters.

The statute sets a cap of five new municipalities per year, but that cap is discretionary for the Commissioner and not binding in practice. More than five took effect in 2026.

The 2026 Wave

Effective date	Tax	Towns
July 1, 2026	Sales	Bristol, Fair Haven, Mendon, Morristown, Pomfret, Swanton, Vergennes, Waitsfield
October 1, 2026	Sales	Peru
July 1, 2026	Meals, alcohol, and rooms	Bolton, Bristol, Fair Haven, Mendon, Morristown, Pittsfield, Pomfret, Swanton, Vergennes, Waitsfield, West Windsor
Staged	Peru and Westmore	Peru: rooms from July 1, 2026, and meals and alcohol from October 1, 2026. Westmore: meals and alcohol from July 1, 2026 (its rooms tax dates from July 2024).

Tips

• Check the Finder at the start of each quarter, not only once when you open.
• Keep a dated screenshot or printout of the Finder result in your records.
• Some towns carry only part of the package. Elmore, Putney, and Wardsboro have rooms tax only, and South Hero has meals and alcohol only. Read each row rather than assuming all three taxes apply.
• Ask the town clerk to confirm any town where the Finder and your local records disagree.

Common Mistakes to Avoid

• Assuming every Vermont town charges the tax. Only 50 of 256 municipal subdivisions do.
• Confusing the Town of Essex with the City of Essex Junction. The Town of Essex does not have the tax. The City of Essex Junction does.
• Assuming all Hartford rows are one place. The Hartford rows cover Quechee, White River Junction, West Hartford, and Wilder.
• Treating Montgomery as a sales tax town. Its sales tax was rescinded effective October 1, 2025, but its meals, alcohol, and rooms taxes remain.
• Forgetting the 3% short-term rental surcharge when you price a stay.
• Charging sales tax on handyman, lawn care, towing, or junk removal work. These services are not taxed.
• Using the wrong state. Hartford, Manchester, Springfield, Stowe, and Dover also exist in other states, so include Vermont in your searches and filings.
• Relying on the Department list as a vote tracker. It shows approved rows only.

Expected Results

If you confirm your town, apply the correct rate to each type of sale, and file on schedule, your returns may match what the Department expects, and you may avoid later corrections. Businesses that skip the town check often find errors during a return review, which can lead to adjustments and added paperwork. Results depend on your sales mix and location, and nothing in this guide guarantees a specific outcome.

Next Step

Enter your address in the Local Option Tax Finder at tax.vermont.gov today, and save the result with the date. If the Finder and your local records disagree, call your town clerk or city office. Share the results with your accountant before you set prices for the next tax period.