Vermont Business Magazine Beginning on July 1, retailers were required to assess a new 6 percent sales tax (7 percent in local option towns) to “soft drinks” as recently redefined by lawmakers. Included in the tax changes enacted by the Vermont Legislature last month, is a new sales tax on a wide variety of beverages sold at retail stores. While referred to as a “soft drink” tax, the definition adopted is not only on carbonation beverages but rather applies to beverages that contain a sweetener (diet or regular).
"Soft Drinks"mean non-alcoholic beverages that contain natural or artificial sweeteners."Soft drinks" do not include beverages that contain milk or milk products, soy, rice or similar milk substitutes, or greater than fifty percent of vegetable or fruit juice by volume.
Among the list of taxable beverages:
·Most sodas, but not unsweetened club soda and seltzers;
·Ice teas, but not unsweetened teas
·Energy drinks
·Juice drink combination that contains under 51 percent juice
·Flavored waters that also contain sweeteners
·Sports drinks
·Non-alcoholic beer
The taxable product list does not include beverage powders, concentrates, or dietary supplements. As well, beverage purchases paid for with assistance through the Supplemental Nutrition Assistance Program (SNAP) or food stamps are exempt from sales tax. In Vermont, this is the 3SquaresVT program.
Vermont Retail & Grocers Association President, Jim Harrison, said, “We were very disappointed to see the sales tax extended to beverages, the first time it has been applied to grocery products in Vermont. However, werecognize what is done is done and we have been working with the Tax Department to help educate our member retailers on how to implement the new tax.” He also added, “While the Legislature copied a definition used in about 15 other states, the closest being Rhode Island, it would have been much better if they hadn’t used such a complicated one.”
For questions on the new tax, you can visit the Tax Department website,www.state.vt.us/taxor visit the association’s website,www.vtrga.org, where there is a link to a summary sheet on the new definition as well as a recording of a recent webinar for retailers.
The Vermont Retail & Grocers Association represents approximately 800 Vermont retail stores and 250 suppliers to the industry, including members of the Vermont Specialty Food Association. VRGA is an association of merchants and trade partners united to promote the sustainable growth of the industry through the Educational, Economic and Public Policy needs of members.