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Sales and Use Tax on Heating Fuel Sold in Vermont

Vermont's 6% sales and use tax is only applied to heating fuel sold to a business. Residential sales of heating fuel are not assessed the sales tax. Since an apartment is considered a “residence” it fits under the sales tax exemption for sales of electricity, oil, gas and other fuels used in a residence, regardless of who pays the bill. In the case of mixed use buildings, the portion of fuel used to heat the residence would not be taxed, while the portion used to heat the business would be taxed.

Sales of fuel used for farming or manufacturing are exempt, however, the buyer must provide the seller with a Vermont Fuel Sales Tax Exemption Certificate (Form S-3F).

Off-road diesel sold to a business is not assessed the 6% sales tax if sold for propulsion use. Vermont’s 6% sales tax is applied to all heating fuel sold to a business, including electricity, natural gas, coal, pellets, and chunk wood.