The Vermont Drive
Informing the Automotive Industry
Selling a Vehicle in Vermont
Answers to Common Questions
Supply or Waste Disposal Fees
Question: Does Vermont allow Supply or Waste Disposal Fees to be passed thru to customers as a line item on their ROs?
Answer: Yes, Vermont allows automotive repair shops to pass through shop supply charges and list them as a separate line item on repair orders and invoices. Vermont tax guidance recognizes these fees as common practice and clarifies that, when separately stated, they are not subject to sales tax because the shop already paid tax when purchasing the supplies.
Question: Does VT have guidance as to how these charges should be calculated (and how they shouldn’t be calculated?)?
Answer: No. Vermont does not prescribe a specific formula, percentage cap, or calculation method for shop supply charges. The state’s guidance focuses on tax treatment rather than pricing methodology, leaving calculation up to the shop, provided the charge is reasonable and not deceptive. Common industry practices include a flat fee per RO or a small percentage of parts or labor.
Question: Any guidance on whether and how these should be communicated to customers?
Answer: Although Vermont does not strictly regulate shop supply or waste disposal fees, consistency, transparency, and documentation are important. Shops should apply charges uniformly, maintain an internal policy explaining how fees are determined, and ensure staff can clearly explain them to customers. Excessive or arbitrary fees could raise consumer protection concerns even if no specific statute is violated.
___________
DMV Billing Issues
Question: What should I do when there are billing issues with the Vermont DMV, particularly in cases where customer fees are being incorrectly charged to the dealer?
Answer: If you have questions about your bill from DMV please contact James Gorczyk, DMV Dealer Unit Supervisor, at 802-828-1443.
Question: When are EV Infrastructure fees due?
Answer: DMV policy states the EV Infrastructure Fee is not due when transferring plates from one EV to another—but only if the fee has already been paid on the previous registration (i.e., the vehicle was newly registered or renewed on or after January 1, 2025). To check whether the fee was paid, review the previous registration certificate. Look at the issue date in the top-right corner. If dated after January 1, 2025, the fee was likely paid. Note: If the document is a duplicate, the date will reflect the reprint date rather than the original issuance. While not foolproof, the issue date is generally a reliable indicator.
__________________
Rebates and Incentives
Question: Are rebates and incentives considered in the Purchase and Use tax calculation?
Answer: Yes. The Commissioner has approved treating them as a reduction to the gross purchase amount for tax purposes.
Question: What are rebates and incentives?
Answer: A rebate is a return of part of the purchase price to the buyer, usually as a promotional offer (e.g., cashback or refund after purchase). An incentive is a payment made to encourage greater investment. It can also be referred to as a "Loyalty Bonus."
Question: Are documents required for incentives?
Answer: Yes. If the manufacturer doesn’t provide the incentive, the dealer must supply supporting documents. Acceptable forms include an incentive acknowledgment on letterhead or third-party paperwork.
Question: When did this policy take effect?
Answer: September 1, 2025.
__________________
Document Preparation Fees
Question: Can a dealer charge a document prep fee?
Answer: Yes, a Document Preparation Fee ("Doc Prep Fee" or "Doc Fee") can be charged by dealers to offset costs related to processing paperwork for vehicle sales. Dealers may pass this fee to consumers if it meets specific criteria.
Question: Is the Document preparation fee taxable?
Answer: The doc fee is taxable and must be clearly stated in the vehicle sale transaction. Vermont regulations require that any advertised vehicle price include the doc prep fee but exclude taxes and optional charges for title preparation or registration assistance.
More information can be found here.
__________________
Lease Buy Outs
Question: Does a Vt dealership have an obligation from the state to charge a doc fee, collect sales tax, and register/title the vehicle when processing a “lease buyout.”
Answer: No, the only time a VT dealer would be required to collect and submit documentation and fees to the State would be if the dealer is issuing a registration for the vehicle.
More information can be found here.
__________________
Agreements to Arbitrate
Question: “Agreement to Arbitrate” documents; are they valid in Vermont.
Answer: Yes, arbitration agreements are valid in Vermont if they meet certain legal requirements. The agreement must include a clearly visible acknowledgment signed by all parties. However, these agreements cannot prevent someone from going to court to protect their constitutional or civil rights. Additional information can be found here.
__________________
Overtime Compensation
Question: Are there rules regarding overtime compensation.
Answer: Yes. In Vermont, overtime compensation is primarily governed by 21 V.S.A. § 384 and the federal Fair Labor Standards Act (FLSA).
It is important to note that even if an employee is exempt from overtime under Vermont state law, they may still be entitled to overtime pay under federal law. A summary of Vermont’s Wage and Hour Laws can be found here.
__________________
EV Infrastructure Fees
Question: What types of transactions require the EV Infrastructure fee?
Answer: The applicable EV Infrastructure fee is due on all new registrations, renewals and on some transfers. When a registration is being transferred from an ICE (Internal Combustion Engine) vehicle to a BEV or PHEV; the full applicable EV Infrastructure fee is due. When a registration is being transferred from an EV to another EV (regardless if is a BEV or PHEV) the EV Infrastructure fee is NOT due. Current EV Infrastructure fees can be found here.
__________________
Residency Requirements for Registrations
Question: Does my customer need to be a VT resident to register/title a vehicle in VT.
Answer: Yes, only out-of-State persons with legitimate connections to the State of Vermont are allowed to register their motor vehicle(s) here. More information can be found here.
__________________
Used Vehicle Inspection Form
Question: When is the Used Vehicle Inspection form required?
Answer: Starting July 1, 2025, Vermont requires dealerships to have buyers of used vehicles sign a disclosure form at the time of sale. The form must state the vehicle's last inspection date, the expiration of the inspection sticker, or clearly note if it hasn’t been inspected. Buyers must also be informed of their right to an independent inspection at their own cost.
Question: Is the form required for vehicles sold at auction?
Answer: Yes, if the vehicle is sold by a Vt dealer to a consumer.
No, if the buyer is another dealer.
Question: Is the form required for dealer-to-dealer (wholesale) transactions?
Answer : No.
More information can be found here.