Ranking and TaxScore #45

Important Tax Facts: 

-The State of Vermont has both Corporate income tax and personal income tax with maximum rates of 8.50% and 8.75%, respectively. Vermont is also one of the few states that also has an estate tax. Read more below.

8.50%

State Income Tax

State
Income
Tax

8.75%

Cost of Setting Up A Business

state
business
tax

HIGH

Property
Taxes

6.22%

STATE & lOCAL
Sales Tax

State Income Taxes in Vermont

The state of Vermont does have an individual income tax. Like most states with income tax, it is calculated on a marginal scale, with four (4) tax brackets. It ranges from 3.35% to 8.75%. The highest bracket of 8.75% starts for income greater than $200,000.

State Business Taxes in Vermont

The state of Vermont has a Corporate Tax rate with three (3) tax brackets. It ranges from 6.00% to 8.50%. The highest tax bracket starts at only $25,000.  Corporate Tax is only assessed on C Corporation. Other flow-thru entities, such as S-Corps, LLCs and LLPs are not subject to the Corporate Tax.

However, you should be aware that the State of Vermont also has a minimum Corporate Tax that is based on the Gross Receipts of the C Corporations. The minimum Corporate Tax is:

  • Less than $2,000,000 – $300 minimum tax
  • Less than $5,000,000 – $500 minimum tax
  • Greater than $5,000,000 – $750 minimum tax

State and Local Sales Taxes in Vermont

Like many states, Vermont has multiple sales tax rates. One at the state level and another at the local level. The state rate is 6.00% the average local rate is 0.22% (total average rate for Vermont Sales Tax is 6.22%).

Property Taxes in Vermont

The average property tax rate for residential property in the state of Vermont is 1.80%. It is the 4th highest in the union as far as Property Tax as a Percent of a taxpayer’s main home (the top three are New JerseyIllinois, & New Hampshire).

Estate Taxes in Vermont

The state of Vermont has a flat estate tax of 16%. The first
$2,750,000 million of the estate is exempt from tax.

State Payroll taxes in Vermont

Payroll (Unemployment Insurance) taxes are paid by business on the behalf of their employees to fund unemployment insurance to the state. It consists of multiple factors. Below is an outline of the most common ones in Vermont –

  • Wage Base – Vermont’s wage base is $16,100
  • New Employers – UI Contribution Tax is 1.00% for all new employers.
  • UI Rates – range from 0.40% to 5.40%

Vermont Business Entities - LLCs

Vermont has an average cost of opening an LLC. Here are some important facts:

  • Vermont’s annual LLC fee is $35 a year
  • When you register with the state, you pay a one time fee of $125
  • Secretary of State of Vermont – click here
  • If you would like help setting up your LLC, we recommend using IncFile.com. They are simple and easy to use.

State #44

State #46