Vermont Digital Products Sales Tax Guide — 2026

“Digital products” covers eBooks, audiobooks, video downloads, online courses, streaming subscriptions, digital artwork, stock photos, music, and similar non-physical delivered goods. Whether Vermont taxes them depends on how the state classifies the product — “specified digital products”, “electronic transfer of canned software”, or a service. Rules vary more than for physical goods.

If taxable in Vermont, the product is subject to 6.00% state rate plus any applicable local rate based on the buyer's address.

Most states sort digital goods using the Streamlined Sales Tax definition of “specified digital products”, which splits them into three subcategories a state can tax or exempt independently:

• Digital audio-visual works — downloaded or streamed movies, shows, and recorded events. Streaming video subscriptions fall here.
• Digital audio works — downloaded or streamed music, podcasts, audiobooks, and ringtones. Streaming music subscriptions fall here.
• Digital books — eBooks. Newspapers, periodicals, blogs, and databases are excluded from the “book” definition and follow their own rules.

Because a state may tax one subcategory and exempt another, “are digital products taxable” rarely has a single yes/no answer. Where Vermont taxes a subcategory, the charge is subject to the 6.00% state rate plus any local rate at the buyer’s address. Software subscriptions (SaaS and electronically delivered “canned” software) sit outside this framework and follow Vermont’s separate software-taxability rule — see the SaaS guide for that determination.

Framework source: Streamlined Sales Tax Governing Board — “Specified Digital Products” definition (SSUTA §332). date_retrieved: 2026-06-04. State-by-state taxability still varies; verify each subcategory with the Vermont Department of Revenue before invoicing.

• Specified digital products. Many states (adopting Streamlined Sales Tax definitions) tax SDPs — digital audio/video/books.
• Online courses and education. Most states treat live-instruction courses as non-taxable services but treat pre-recorded course access as taxable digital products. Watch for this split if you sell both.
• Subscriptions. Bundled subscription boxes with mixed digital + physical content are often taxed as a single taxable bundle — you can't allocate across taxable and non-taxable components unless the invoice separately states them.
• B2B vs B2C. Some states exempt B2B digital products when bought for resale or when the buyer has a direct-pay permit. Keep certificates on file.

• Treating all digital products the same across states — eBook tax treatment differs from SaaS, which differs from streaming.
• Bundling digital + physical goods without a line-item breakdown. Most states tax the full bundle at the physical rate if not itemized.
• Applying origin-based sourcing (your state's rate) when most states source digital products to the buyer's billing or shipping address.

Vermont sales tax nexus and economic nexus threshold: remote sellers must register, collect, and remit Vermont sales tax when Vermont-destination sales reach $100,000 or 200 individual sales transactions during the preceding twelve-month period. The remote-seller rule took effect July 1, 2018 after South Dakota v. Wayfair. Vermont counts taxable and nontaxable sales toward the threshold unless all the seller's Vermont sales are exempt; sellers review the threshold at each calendar-quarter close and generally begin collecting by the first day of the following month after the 30-day analysis window. Marketplace sellers combine direct Vermont sales with marketplace sales when testing the threshold, but do not collect on marketplace transactions where the marketplace is already collecting Vermont sales tax on their behalf. Vermont imposes a 6% state sales tax on retail sales, uses destination-based sourcing, and some municipalities add a 1% local option tax on taxable destination sales. Internet purchases, digital downloads, and prewritten software are listed by the Department as taxable categories unless an exemption applies.

Read the full Vermont overview for thresholds, filing frequency, marketplace facilitator rules, and registration links. Use the nexus calculator to check whether you have crossed the threshold. For background on the post-Wayfair economic nexus framework, see the pillar guide.

• Vermont · SaaS
  Software-as-a-service sales tax rules
• Vermont · Thresholds
  Economic and transaction nexus thresholds
• Vermont · E-commerce
  General e-commerce sales tax rules