Companies/organizations that currently qualify for exempt status: A-Z (alphabetical listing).
The following is a list of conditions that will allow you to register your vehicle exempt of payment of the Vermont Purchase and Use Tax:
A vehicle owned or leased by government
You will be required to submit proof of government ownership.
A vehicle owned or leased by religious or charitable institution
These groups must submit the following documentation:
- A copy of Articles of Association and Statement of Purpose as filed with the Secretary of State.
- A copy of Internal Revenue Service form letter 947 which indicates that this group has been determined as exempt from federal income tax under section 501(a) of the Internal Revenue Code or copies of the IRS form letters 1045 and 1050 indicating that you are eligible as a 501(c)(3) organization.
- A copy of Exemption Organization Registration Certificate for Vermont Sales and Use Tax or a letter from the Vermont Department of Taxes (signed by the Tax Department) stating that the organization has been granted exemption status from Vermont Sales and Use Tax as having 501(c)(3) status. Form S3 Resale and Exempt Organization Certificate of Exemption is not acceptable as it does not verify exemption status.
Note: The Articles of Association and Statement of Purpose would be used for requesting the tax exempt status from the Vermont Department of Taxes.
Vehicle transferred to the spouse, party to a civil union, mother, father, stepmother, stepfather, son, daughter, stepson, stepdaughter, grandparent, or grandchild of the donor, or to a trust established for the benefit of any such persons or for the benefit of the donor, or subsequently transferred among such persons, provided such motor vehicle has been registered or titled and taxed in the name of the original donor. You will be required to submit a completed Gift Tax Exemption Form (form #VT-013). Note: If a "Gift Tax Exemption" claim is submitted with a Registration or Tax &Title application that lists a lien holder, the exemption will be denied. More information
Controlling interest exemption
Vehicle registered and/or titled by the transferor and transferred between that person and a business entity controlled by the transferor, if the transfer is exempt under Section 351 of the United States Internal Revenue Code in effect July 1, 1966 (you will be required to submit a completed Tax Exemption - Controlling Interest Form (form #VT-029) indicating the transfer is to a business entity in which the person has controlling interest (80%).
Persons with disabilities exemption
Vehicle equipped with altered controls and owned and operated or titled by a permanently disabled person, certified exempt by the Commissioner - must submit statement of eligibility from the dealer stating the vehicle has been adapted. You will be required to submit an Application for Tax Exemption form (form #VD-050) signed by a physician certifying that the condition is permanent and that special controls are required.
A vehicle equipped with a mechanical lifting device and owned by a permanently disabled person, certified exempt by the Commissioner (you will be required to submit a statement of eligibility from the dealer stating device installed and an Application for Tax Exemption form (form #VD-050) signed by a physician certifying that the condition is permanent and the device is required).
Taxes paid in another state exemption
Vehicle on which a state sales or use tax has been paid (in another state) by the person applying for a title/registration in Vermont. If the tax paid in another state is less than the Vermont tax, the tax due shall be the difference. You will be required to submit proof of tax paid. A copy of the retail installment agreement is not acceptable.
Vehicles previously registered out-of-state exemption
You may claim a tax credit for a vehicle registered to you for a period of 3 years or more in a jurisdiction that imposes a state sales or use tax on vehicles. you will be required to provide proof that the vehicle was indeed registered in a qualifying jurisdiction for at least 3 years. Examples of proof of registration are:
- Out-of-state Title (we will go by the title issue date).
- Registration Certificate(s) that show the vehicle was registered for 3 or more years.
- Letter from that state's motor vehicle department stating the vehicle has been registered there for 3 or more years.
You will be required to submit a statement from Veterans Administration certifying exemption. Exemption is for one (1) vehicle or its replacement during any registration period.
Source: Vermont Statutes: TITLE 32 Taxation and Finance :
SUBTITLE 2 Taxation : PART 5 Special Taxes : CHAPTER 219. Motor Vehicle Purchase and Use Tax: § 8911. Exceptions.
The tax imposed by this chapter shall not apply to:
(14) a motor vehicle granted a veteran by the veterans' administration or a vehicle obtained as a replacement to one granted, when accompanied by a certificate issued by the veterans' administration center certifying the veteran to be entitled to the exemption;
Full text of statute: Vermont Statutes and Court Rules on the State of Vermont's Legislative site
Rental tax exemption
Applies to a pleasure car, trailer (with loaded weight of 3,000 lbs or less), truck and trailer coach (with loaded weight 26,000 lbs or less), when registered for use as a rental unit. Registrant or lessee must be licensed in Vermont as a VT Rental Company and will be required to submit a completed Rental Tax Exemption (form #VD-030). This vehicle is also classified as a Jitney and should be registered as such. Note: Registration, Tax and Title Application (form #VD-119) must also be completed.
Transfer to trust exemption
Vehicle registered and/or titled and transferred from an individual to, or in trust for the benefit of, a former spouse if the transfer is part of the divorce settlement and if the transfer takes place within one year after the date on which the divorce became final.