Act 136 (H.717) of the 2006 Vermont Legislature exempts wages derived from services performed by direct sellers from the definition of employment. As a result, businesses that contract with direct sellers will no longer be assessed unemployment insurance taxes on the basis of wages paid to those direct sellers.
DEFINITION OF DIRECT SELLER
A direct seller must meet all of the following conditions.
1. An individual engaged in one of the following trades or businesses.
a. Selling or soliciting the sale of consumer products, including services, either-
i. In a home or other place that is not a permanent retail establishment, or
ii. To any buyer on a buy-sell basis or a deposit-commission basis for resale in a home or other place that is not a permanent retail establishment.
b. Delivering or distributing newspapers or shopping news (including any services directly related to that trade or business).
2. Substantially all the individual’s pay for the services described in (1) is directly related to sales or other output (including the performance of services rather than to the number of hours worked.
3. The services are performed under a written contract between the individual and the person for whom the services are performed, and the contract provides that the individual will not be treated as an employee for federal and state tax purposes.
This law became effective July 1st , 2006.