Taxes / State tax rules / Vermont
Selling on eBay, Poshmark or Etsy from Vermont: sales tax and 1099-K rules
On a marketplace sale delivered to Vermont, the marketplace facilitator collects and remits the 6% sales tax and notifies its sellers, and a marketplace seller that accepts the facilitator's certification in good faith excludes those sales from its own vendor obligation. Vermont sets its own 1099-K threshold: the Department of Taxes says a payment processor, gig platform or marketplace that pays an individual $2,000 or more issues a 1099-K and provides it to the Department, because 32 V.S.A. § 5862d applies the § 6041(a) limits instead of the federal 1099-K test.
General information, not tax advice. Check with a tax professional about your own situation.
Checked against the official pages listed below on .
Vermont in short
- General sales tax:
- Yes, 6% state rate
- Marketplace facilitator law:
- Yes: 32 V.S.A. § 9713 (Act 46 of 2019), since Jun 1, 2019
- When a marketplace must collect:
- facilitated sales by marketplace sellers to Vermont destinations of at least $100,000, or at least 200 individual sales transactions, during the 12-month period preceding the monthly period for which liability is determined (32 V.S.A. § 9701(9)(J))
- Form 1099-K:
- State threshold: a third-party payment processor, gig work platform or marketplace pays an individual $2,000 or more
Who collects the tax on a marketplace sale
The marketplace facilitator collects and remits sales tax on retail sales by marketplace sellers through its marketplace and must certify to its sellers that it will; marketplace sellers collect on retail sales in Vermont not made through a marketplace.
If you sell only through marketplaces
A seller that accepts a facilitator's certification in good faith excludes marketplace sales from its obligation as a vendor. Vermont's definition of vendor includes a marketplace seller whose direct and marketplace sales into Vermont together reach $100,000 or 200 transactions in the prior 12 months (§ 9701(9)(K)); the pages read do not say what registration that requires when all sales are certified marketplace sales.
Registration, resale certificates and what changes when you also sell direct have their own page: Vermont: seller's permit and resale certificate rules.
The law: 32 V.S.A. § 9713 (Act 46 of 2019), effective .
"Once notified, a marketplace seller will not need to collect and remit sales tax as the marketplace facilitator will fulfill that requirement for the seller making sales in Vermont."
"A marketplace seller that accepts a certification from a marketplace facilitator in good faith shall exclude sales made through the marketplace from its obligation as a vendor under this chapter."
Sources: Marketplace Facilitators; 32 V.S.A. § 9713, Marketplace facilitators and marketplace sellers; 32 V.S.A. § 9701, Definitions.
Vermont's sales tax
Vermont's sales tax rate is 6%, charged on retail sales of tangible personal property unless the law exempts them, and use tax applies at the same rate.
"The sales tax rate is 6%."
Sources: Sales and Use Tax.
Form 1099-K: Vermont and the federal test
Third-party settlement organizations report to the Department, and to payees with a Vermont address, as if the federal 1099-K limits did not apply but the § 6041(a) limits did. The Department's FAQ now gives $2,000, and the IRS's 1099-MISC and 1099-NEC instructions say the minimum threshold for certain information returns increased to $2,000 for tax years beginning after 2025; the Department's 2017 notice gave $600. Filing with the Department is due 30 days after the IRS due date.
| Test | Dollar amount | Transactions | Wording |
|---|---|---|---|
| Vermont | $2,000 | No count | a third-party payment processor, gig work platform or marketplace pays an individual $2,000 or more |
| Federal (IRS) | Over $20,000 | More than 200 | Over $20,000 in more than 200 transactions, through one app or marketplace in a calendar year |
"Vermont law requires that if a third-party payment processor, gig work platform, or marketplace pays an individual $2,000 or more, they will issue a 1099-K and provide to the Department of Taxes."
"as if the de minimis limitations of 26 U.S.C. § 6050W(e) did not apply, but that the de minimis limitations of 26 U.S.C. § 6041(a) did apply."
"For tax years beginning after 2025, the minimum threshold amount for reporting certain payments required to be reported on certain information returns and/or perform backup withholding on those payments increased to $2,000"
Rule: 32 V.S.A. § 5862d(b). Applies from: January 1, 2017 (Act 73 of 2017); the dollar figure follows the 26 U.S.C. § 6041(a) limits.
The federal test, for comparison: the IRS says a payment app or online marketplace must send a Form 1099-K when payments for goods or services total over $20,000 in more than 200 transactions, and adds: "However, they may send you a Form 1099-K with lower amounts and/or transactions." (Understanding your Form 1099-K, reviewed ). The Instructions for Form 1099-K count both parts for the calendar year, through each platform separately, and say the box 1a gross amount is figured without adjustments for credits, discounts, fees, refunds or shipping, so a 1099-K figure is not the same as profit. More on the federal rule in Form 1099-K for resellers.
Sources: 1099-K Notices | Frequently Asked Questions; 32 V.S.A. § 5862d, Filing of federal form 1099; New Law Lowers Reporting Threshold for 1099-K Information Reporting; Instructions for Forms 1099-MISC and 1099-NEC (Rev. 12/2026).
Worked examples
Tax on a $40 marketplace sale to Burlington
At 6%, a $40.00 taxable item carries $2.40 of Vermont sales tax, which the facilitator collects. Shipping is left out of this figure.
A Vermont 1099-K where the IRS would require none
A Vermont seller is paid $2,500 for 150 sales on one platform in 2026. That is not over $20,000 in more than 200 transactions, so the federal test does not require a 1099-K, but at $2,000 or more the Department's FAQ says the platform issues one and provides it to the Department.
A 1099-K is not a tax bill
The Department's own examples: someone who sells furniture on an auction site for $5,000 after paying $9,000 for it has a loss, which is not taxed; classmates repaying $1,400 of a dinner through a payment app is a reimbursement, not income. For a hobby seller with $3,268 of hand-painted decorations, the Department says the amount should be included in gross receipts and certain expenses may be deductible.
Edge cases and details
- The Department's 2017 notice gave $600, while its FAQ now gives $2,000. The IRS's instructions for Forms 1099-MISC and 1099-NEC say the minimum reporting threshold for certain information returns increased to $2,000 for tax years beginning after 2025 and may be adjusted for inflation from 2027; because § 5862d follows § 6041(a), confirm the figure for a given payment year with the Department.
- Vermont's 1099-K rule covers payees with a Vermont address; a Vermont seller can get a state-driven 1099-K from a platform even when no federal 1099-K is due.
- Act 73 of 2017 made failure to provide the required 1099-K information a failure to file a return, so penalties may apply to the platform, the Department's 2017 notice says.
- Vermont's vendor definition counts marketplace sales toward a marketplace seller's $100,000 or 200-transaction test, under § 9701(9)(K), even though certified marketplace sales are then excluded from its obligation under § 9713(b).
- A facilitator is relieved of liability if it shows the Commissioner that its failure to collect the right tax came from incorrect information the seller gave it, under § 9713(c).
What to do
- If you have a Vermont address, expect a 1099-K from a platform that pays you $2,000 or more in a year, and compare it with your own sales records; check with a tax professional about how it fits your return.
- Keep each marketplace's notice or certification that it collects Vermont tax; § 9713(b) ties the exclusion to accepting it in good faith.
- If you also sell direct into Vermont, add direct and marketplace sales together against the $100,000 or 200-transaction test in § 9701(9)(K).
Common questions
What is Vermont's 1099-K threshold?
The Department of Taxes says a payment processor, gig work platform or marketplace that pays an individual $2,000 or more issues a 1099-K and provides it to the Department. The statute ties the figure to the 26 U.S.C. § 6041(a) limits, which the IRS says increased to $2,000 for tax years beginning after 2025; the Department's 2017 notice gave $600.
Does a Vermont 1099-K mean I owe tax?
Not by itself. The Department calls it an informational document and says to use it with your other records to work out whether amounts are taxable income.
When did Vermont marketplace facilitators start collecting?
June 1, 2019, under Act 46 of 2019, which added 32 V.S.A. § 9713.
Related
- Every state on one table: sales tax, marketplace facilitator laws and 1099-K rules
- Vermont: seller's permit and resale certificate rules
- Utah: sales tax and 1099-K rules
- Virginia: sales tax and 1099-K rules
- Form 1099-K for resellers: the federal test
- Do eBay's fees apply to the sales tax a buyer pays?
- Where each selling app keeps its sales report
General information, not tax advice
This page summarizes Vermont's own published pages and statutes as read on , and the IRS's 1099-K pages. It doesn't say what you should file, register for or pay. Rules depend on your situation and change: check with a tax professional, or with the state's revenue department.
Sources
Official pages this page is built from, with the day each was read.
- Vermont Department of Taxes: Marketplace Facilitators; read . June 1, 2019 start, notice to sellers, definition.
- Vermont General Assembly: 32 V.S.A. § 9713, Marketplace facilitators and marketplace sellers; read . Collection duty, certification and exclusion, liability relief.
- Vermont General Assembly: 32 V.S.A. § 9701, Definitions; read . Facilitator and marketplace seller $100,000 or 200-transaction tests.
- Vermont Department of Taxes: Sales and Use Tax; read . 6% rate.
- Vermont Department of Taxes: 1099-K Notices | Frequently Asked Questions; read . $2,000 threshold and taxable-income examples.
- Vermont General Assembly: 32 V.S.A. § 5862d, Filing of federal form 1099; read . § 6041(a) limits applied to 1099-K; 30-day filing; Act 73 effective January 1, 2017.
- Vermont Department of Taxes: New Law Lowers Reporting Threshold for 1099-K Information Reporting, dated ; read . Act 73 change, $600 figure in 2017, penalties, 30-day due date.
- IRS: Instructions for Forms 1099-MISC and 1099-NEC (Rev. 12/2026), dated ; read . Information return threshold increased to $2,000 for tax years beginning after 2025, inflation adjustment from 2027.
- IRS: Understanding your Form 1099-K, reviewed . The federal 1099-K test.
- IRS: Instructions for Form 1099-K, reviewed . Both parts of the federal test counted for the calendar year.
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