Act 134 of 2016 clarified that if you are a manufacturer or retailer, you will be treated as a contractor when purchasing material and supplies for use in improving, altering, or repairing real property. 32 V.S.A. § 9701(5). The phrase “treated as a contractor” means you must pay sales tax to a wholesaler when purchasing these materials, or you must remit use tax when you install materials or supplies from your inventory. This change undoes the change from Act 174 of 2014, which required those who were predominantly retailers to collect the sales tax at the point of sale to the end customer. If you want to continue charging tax to the end customer when improving real property, submit Form SUT-459 to the Department of Taxes.
Form SUT-459 will allow you to continue to be treated as a retailer and charge the sales tax to your end customer. You will find the form online at https://tax.vermont.gov/research-and-reports/tax-forms. If you do not submit this form, you will be treated as a contractor for sales tax purposes when making improvements to real property. For more information, please visit the Vermont Tax Department website at https://tax.vermont.gov/business-and-corp/sales-and-use-tax/election.