Vermont Sales Tax Law Update: Impact on SaaS Providers and Compliance Responsibilities

• Vermont Legislature adopted Act 183 (H.887) of 2024, overriding the Governor’s veto on sales tax exemption for prewritten computer software accessed remotely
• Prewritten software accessed remotely was previously exempt from sales and use tax since 2015, but the new bill repealed that exemption for cloud software providers
• Under the new legislation, prewritten computer software is now considered tangible personal property, regardless of how it is paid for, accessed, or delivered
• The Sales Tax Liability for SaaS suppliers will be effective from July 1, 2024
• Vermont previously did not extend sales and use tax obligations to cloud-based software applications, but now includes Software as a Service (SaaS) and Platform as a Service (PaaS) in the tax matrix
• The sales or use tax rate for cloud-based software is 6%, with providers or users required to impose this tax from July 1, 2024
• Compliance responsibilities include charging, collecting, and reporting sales tax for sellers of prewritten computer software, with the obligation to impose a use tax based on where the software is first used
• Vermont joins other US states in introducing sales tax liability for cloud-based prewritten computer software suppliers, with the aim of increasing public revenue by approximately USD 22 million in the first year.

Source: 1stopvat.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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