Next Up: The Vermont Data Privacy and Online Surveillance Act
On June 16, 2026, Vermont’s Governor signed the Vermont Data Privacy and Online Surveillance Act (the “VDPOSA”) into law, making Vermont the most recent state to enact a comprehensive state privacy law. The VDPOSA takes effect January 1, 2028. Vermont’s law departs from the standard playbook for comprehensive state privacy laws in several meaningful ways, including a standalone sensitive data applicability trigger, expanded definitions of sensitive data and publicly available information, novel consumer health data obligations that apply without any minimum processing threshold, and enhanced rights and assessments relating to profiling.
Applicability
The VDPOSA applies to any person or entity that conducts business in Vermont or produces products or services targeted to Vermont residents and that, during the preceding calendar year, satisfied at least one of the following thresholds:
Controlled or processed the personal data of not fewer than 35,000 Vermont residents, excluding personal data controlled or processed solely for the purpose of completing a payment transaction;
Controlled or processed the sensitive data of not fewer than 3,000 Vermont residents, excluding personal data controlled or processed solely for the purpose of completing a payment transaction; or
Offered for sale in trade or commerce the personal data of not fewer than 3,000 Vermont residents.
Vermont is only the second state, after Connecticut, to include a standalone sensitive data threshold that is independent of any revenue or general processing threshold (Connecticut’s sensitive data threshold takes effect July 1, 2026). The practical effect is that businesses handling even limited quantities of sensitive data, such as health, biometric, or precise geolocation information, may be subject to the VDPOSA even if they would otherwise fall below the 35,000-person threshold.
Further, with respect to the VDPOSA’s provisions concerning consumer health data, the above applicability thresholds do not apply. Rather, the VDPOSA’s consumer health data provisions apply to any person or entity that does business in Vermont or targets products or services to Vermont residents without any data processing, revenue, or similar thresholds.
Exemptions
The VDPOSA’s exemptions depart from many other comprehensive state privacy laws in notable ways. For example, while the VDPOSA provides entity-level exemptions for HIPAA covered entities and business associates, and data-level exemptions for protected health information and other federally regulated data categories, it does not include a blanket nonprofit exemption or any exemption for institutions of higher education. Nonprofit organizations benefit only from narrow carve-outs for those established to detect and prevent insurance fraud, those providing enrollment data reporting services for postsecondary institutions for limited purposes, and the noncommercial activities of certain enumerated media entities.
The VDPOSA’s treatment of financial institutions similarly diverges from most peer laws. The law provides only a data-level GLBA exemption. The entity-level financial institution exemption is limited to state and federally chartered banks, credit unions, and certain affiliates principally engaged in financial activities, which is a narrower carve-out than the entity-level GLBA exemptions found in many other comprehensive state privacy laws. Certain financial institutions must therefore analyze which personal data they collect and process qualifies for the data-level exemption.
As with other comprehensive state privacy laws, personal data processed in an employment or contractor context falls outside the VDPOSA’s scope.
Key Definitions
Consumer: The VDPOSA defines “consumer” to mean an individual who is a Vermont resident acting only in an individual or household context. Individuals acting in an employment or contractor context are excluded, meaning employee personal data and business-to-business personal data fall outside the VDPOSA’s scope.
Sensitive Data: Controllers must obtain affirmative consent before processing sensitive data. Separately, controllers must also obtain affirmative consent before selling sensitive data. The VDPOSA uniquely and broadly defines “sensitive data” to include:
personal data revealing racial or ethnic origin, religious beliefs, sex life, sexual orientation, status as nonbinary or transgender, citizenship or immigration status, mental or physical health conditions, diagnosis, disability, or treatment;
consumer health data;
genetic or biometric data or information derived therefrom;
precise geolocation data;
personal data collected from a known child;
neural data;
a consumer’s financial account number, financial account login credentials, or credit or debit card number that, in combination with any required access or security code, password, or credential, would allow access to a consumer’s financial account; and
government-issued identification numbers, including Social Security numbers, passport numbers, state identification card numbers, and driver’s license numbers, that applicable law does not require to be publicly displayed.
Sale of Personal Data: The VDPOSA defines “sale of personal data” as the exchange of personal data for monetary or other valuable consideration by a controller to a third party. Standard exemptions apply for disclosures to processors or affiliates, consumer-directed disclosures, and transfers in connection with mergers and acquisitions.
Publicly Available Information: The VDPOSA’s definition of “publicly available information” is significantly narrower than in many other comprehensive state privacy laws. Importantly, information that is collated and combined into a consumer profile that is made available to users of a publicly available website, whether for payment or free of charge, loses its publicly available classification under the VDPOSA, as do inferences derived from such profiles. The law also excludes from the definition genetic data, biometric data collected without a consumer’s knowledge, personal data created by combining personal data with publicly available information, information shared with a restricted audience, and nonconsensual intimate images. This narrowed definition has particular significance for data brokers and information aggregators.
Compliance
Controllers subject to the VDPOSA must provide consumers with a reasonably accessible privacy notice disclosing the categories of personal data processed, the purposes of processing, the categories of personal data shared with third parties, and the process by which consumers may exercise their rights. The VDPOSA adds a disclosure requirement found in recent amendments to Connecticut’s law, namely that the privacy notice must include whether a controller collects, uses, or sells personal data for the purpose of training large language models. Like Connecticut’s law, the VDPOSA does not specify what qualifies as “training large language models,” creating ambiguity that controllers will need to navigate carefully.
The VDPOSA requires controllers to conduct and document data protection assessments for processing activities that present a heightened risk of harm to consumers, including targeted advertising, the sale of personal data, the processing of sensitive data, and profiling activities that present a reasonably foreseeable risk of unfair or deceptive treatment, financial, physical, or reputational injury, intrusion upon seclusion, or other substantial injury. Assessment obligations apply prospectively to processing activities created or generated after January 1, 2028.
Further, the VDPOSA requires a separate impact assessment when a controller engages in profiling for making decisions with legal or similarly significant effects on consumers. This impact assessment carries prescribed content requirements, including purpose disclosure, risk analysis, categories of data used, performance metrics, transparency measures, and post-deployment monitoring. All assessments are confidential but may be requested by the Vermont Attorney General.
Consumer Rights and Requests
The VDPOSA grants Vermont residents the following rights:
Right to Access: Consumers may confirm whether a controller is processing their personal data, access that data, and access inferences derived from their personal data. Consumers may also confirm whether a controller is processing their personal data for profiling purposes in furtherance of a decision with a legal or similarly significant effect. Facilitating this right may prove difficult for controllers.
Right to Correction: Consumers may request correction of inaccuracies in their personal data.
Right to Deletion: Consumers may request deletion of personal data provided by or obtained about them.
Right to Data Portability: Consumers may obtain a copy of personal data they previously provided in a portable and, to the extent technically feasible, readily usable format.
Right to Opt Out of Sale: Consumers may opt out of the sale of their personal data and may request a list of the specific third parties to whom their personal data was sold, or, if the controller does not maintain such a list, a list of all third parties to whom the controller has sold personal data.
Right to Opt Out of Targeted Advertising: Consumers may opt out of the processing of their personal data for targeted advertising purposes.
Right to Opt Out of Profiling and Enhanced Profiling Rights: Consumers may opt out of profiling in furtherance of decisions that produce legal or similarly significant effects. Where a controller uses profiling to produce such a decision, consumers may also question the result, be informed of the reasons for the decision, and review the personal data processed for such decision. For profiling decisions concerning housing specifically, consumers have the additional right to correct inaccurate personal data and to have the profiling decision reevaluated on the basis of corrected data.
Controllers must respond to requests within 45 days of receipt, with the ability to extend by an additional 45 days when reasonably necessary. Controllers must establish a conspicuously available appeal mechanism and respond to appeals within 60 days. If an appeal is denied, the controller must provide the consumer with information enabling them to contact the Vermont Attorney General to submit a complaint.
Consumer Health Data
As noted above, the VDPOSA’s consumer health data provisions apply more broadly than the general law. The VDPOSA defines “consumer health data” expansively as any personal data that a controller uses to identify a consumer’s physical or mental health condition, diagnosis, or status, including gender-affirming health data and reproductive or sexual health data. This definition may capture data not traditionally associated with health, including fitness application data, inferred health conditions, and advertising segments tied to health interests. Notably, the consumer health data obligations do not apply to HIPAA covered entities processing personal data for purposes covered by HIPAA.
Among other obligations, the VDPOSA prohibits any person or entity subject to the consumer health data provisions from:
Granting any employee or contractor access to consumer health data without a contractual or statutory duty of confidentiality;
Granting any processor access to consumer health data without a compliant data processing agreement;
Using geofencing technology to establish a virtual boundary within 1,850 feet of any healthcare facility, including any mental health facility or reproductive or sexual health facility, for the purpose of identifying, tracking, collecting data from, or sending notifications to consumers regarding their consumer health data; and
Selling or offering to sell consumer health data without first obtaining the consumer’s affirmative consent.
Enforcement
The VDPOSA does not include a private right of action. The Vermont Attorney General has exclusive enforcement authority. A violation of the VDPOSA constitutes a violation of the Vermont Consumer Protection Act, with civil penalties up to $10,000 per violation. Notably, the law states that the Vermont General Assembly may add a private right of action in the future if adequate enforcement resources are not appropriated to the Attorney General’s office.
From January 1, 2028 through June 30, 2029, the Attorney General must give violators 60 days to cure before initiating any enforcement action, but only if a cure is possible. This cure period will not be available after June 30, 2029.
Conclusion
The enactment of the VDPOSA continues the national trend of state-level data privacy regulation and introduces several provisions that set Vermont apart from many of its peers. Businesses should pay particular attention to the VDPOSA’s unique requirements.
Businesses should assess their compliance programs promptly and ensure they are updated before the VDPOSA takes effect on January 1, 2028, and fully mature before the cure period sunsets on June 30, 2029. If you would like assistance with, or have any questions about, complying with the VDPOSA or other data privacy laws, or need assistance reviewing your data privacy practices, please contact one of our Data Protection attorneys. Check out our U.S. State Privacy Laws page for more information.
