Vermont Cannabis Tax Guide: Updated 8/1/2025

Last updated August 16, 2025

Key Points

• Adult-use excise tax: 14 % of retail price (uniform statewide rate).

• State sales/use tax: 6 % of total purchase (excise + retail).

• No cannabis-specific local taxes permitted—only the 14 % + 6 % statewide applies.

• Medical cannabis: 100 % exempt from both excise and sales/use tax with valid medical endorsement.

• 280E decoupling: Since 2022, Vermont allows full deduction of “ordinary and necessary” business expenses on state returns.

• E-filing via myVTax is mandatory each period—zero-returns required if no sales.

• Noncompliance risks interest, penalties, audits, and potential license suspension.

1. Understanding Vermont’s Cannabis Tax Structure

1.1 State Excise Tax

• Rate: 14 % of the retail gross receipt, set by 32 V.S.A. § 7904.

• Uniformity: Applies statewide—no local add-on.

1.2 State Sales & Use Tax

• Cannabis Excise Tax (14%) must be separately stated from Sales and Use Tax (6%) on the customer’s receipt.

• Rate: 6 % on the total retail price

• Calculation:

  1. Excise = Retail Subtotal × 14 %

  2. Sales tax = Retail Subtotal × 6 %
  3. Local tax (depending on location) = 1%
  4. Add Retail Subtotal + Excise + State Sales Tax + Local Tax (depending on location) = Total ticket amount.

• Example:

  • Retail price = $100

  • Excise = $100 × 14 % = $14

  • Sales tax = $100 × 6 % = $6
  • Total customer price = $120.00

1.3 Medical Cannabis Exemption

• Exemptions: Both 14 % excise and 6 % sales/use tax.

• Requirements: Valid medical endorsement on file; dispensaries must keep detailed patient-sales logs.

1.4 280E Decoupling (State Level)

• Vermont decoupled from federal IRC § 280E effective for tax years beginning January 1, 2022.

• Allows full deduction of ordinary business expenses on state income-tax returns, improving cash flow and simplifying accounting.

2. Filing & Payment Requirements

2.1 Filing Frequencies & Deadlines

Note: If a due date falls on a weekend or state/federal holiday, the deadline shifts to the next business day.

2.2 Zero-Returns

• Even with no taxable activity, filers must submit a $0 return for the applicable excise and sales/use periods.

2.3 Mandatory E-Filing

• All cannabis tax returns (excise and sales/use) must be filed electronically via myVTax.

3. Required Forms

• Cannabis Excise Tax Return

• SUT-451 (Sales & Use Tax Return)

• State Income Tax Return (Schedule C on Form IN-111 for businesses)

4. Penalties & Compliance Risks

• Interest: ~6 % annual rate on unpaid tax.

• Late-payment penalty: 5 % of tax due.

• Late-filing penalty: up to 25 % of tax due.

• Noncompliance: May trigger license suspension, fines, audits, or operational shutdown.

5. Trade Associations & Resources

• Vermont Growers Association: craft growers’ advocacy

• Cannabis Retailers Association of Vermont (CRAV)

• National Cannabis Industry Association (NCIA) federal lobbying, best practices.

• Minority Cannabis Business Association (MCBA): social equity, advocacy and education.

6. Government Contacts

Vermont Cannabis Control Board

• Phone: (802) 828-1010 ext.3

• Email: CCB.Info@vermont.gov

• Address: 89 Main Street, Montpelier, VT 05602

Vermont Department of Taxes

• General tax inquiries: income.tax@vermont.gov
• Contact Us Form
• E-Filing: myVTax 

7. Financial Calendar (Summary)

Disclaimer: This guide is for informational purposes only. Always verify current requirements on the Vermont DOR and CCB websites, and consult a qualified tax professional before making compliance decisions.