Vermont State Tax Guide for Businesses & Individuals 2026
Vermont imposes a range of taxes on businesses and individuals, including corporate income tax, individual income tax, sales tax, and property tax — making it essential for business owners and residents to understand their full compliance obligations. This comprehensive Vermont state tax guide covers all 2026 rates, filing deadlines, credits, and registration requirements for operating in the Green Mountain State. For streamlined tax filing and business compliance, visit filings.us/tax.
Quick Reference: Vermont Tax Rates at a Glance
| Tax Type | Rate / Detail |
|---|
| State Corporate Income Tax | 6.0% – 8.5% (graduated) |
| State Individual Income Tax | 3.35% – 8.75% (graduated) |
| State Sales Tax Base Rate | 6% |
| Average Combined Sales Tax | ~6.36% |
| SUI/SUTA Rate Range | 0.4% – 5.4%; New Employer: 1.0% |
| Effective Property Tax Rate | ~1.78% (average) |
| Estate / Inheritance Tax | Yes — Estate Tax; threshold $5,000,000 |
Vermont Business Tax Nexus
What is Tax Nexus in Vermont?
Nexus in Vermont determines whether a business has a sufficient connection to the state to be subject to Vermont tax obligations. Nexus can be established physically or economically.
Physical Nexus
- Maintaining an office, store, or other place of business in Vermont
- Having employees, agents, or representatives working in Vermont
- Storing inventory in Vermont (including FBA fulfillment centers)
- Owning or leasing real or personal property in Vermont
- Operating vehicles or equipment in Vermont
Economic Nexus (Remote Sellers)
| Threshold Type | Detail |
|---|
| Sales Threshold | $100,000 in Vermont sales |
| Transaction Count Threshold | 200 or more separate transactions |
| Effective Date | July 1, 2018 |
Click-Through & Affiliate Nexus
Vermont enforces click-through and affiliate nexus. Any out-of-state seller with Vermont-based affiliates or referral agreements generating more than $10,000 in Vermont sales per year is considered to have nexus and must collect and remit Vermont sales tax.
Vermont State Income Tax
Corporate Income Tax
| Vermont Taxable Income | Tax Rate |
|---|
| $0 – $10,000 | 6.0% |
| $10,001 – $25,000 | 7.0% |
| $25,001 – $250,000 | 8.0% |
| Over $250,000 | 8.5% |
- Apportionment Formula: Single sales factor (effective for tax years beginning on or after January 1, 2021)
- Combined/Unitary Reporting: Vermont requires combined unitary reporting for affiliated groups
- Minimum Corporate Tax: $300 minimum corporate income tax applies
Individual Income Tax
| Filing Status | Income Bracket | Tax Rate |
|---|
| Single | $0 – $45,400 | 3.35% |
| Single | $45,401 – $110,050 | 6.6% |
| Single | $110,051 – $229,550 | 7.6% |
| Single | Over $229,550 | 8.75% |
| Married Filing Jointly | $0 – $75,850 | 3.35% |
| Married Filing Jointly | $75,851 – $183,400 | 6.6% |
| Married Filing Jointly | $183,401 – $279,450 | 7.6% |
| Married Filing Jointly | Over $279,450 | 8.75% |
- Standard Deduction: $7,000 (single); $14,050 (married filing jointly) — Vermont uses its own deduction amounts
- Personal Exemption: $4,500 per exemption
- Federal Conformity: Rolling conformity — Vermont conforms to the IRC on a rolling basis with certain modifications
Filing Deadlines
| Filing Type | Due Date |
|---|
| Corporate Return (Form CO-411) | 15th day of 3rd month after tax year end (March 15 for calendar year) |
| Individual Return (Form IN-111) | April 15 |
| Extension Period | 6 months (automatic with federal extension) |
| Estimated Payments (Corporate) | March 15, June 15, September 15, December 15 |
| Estimated Payments (Individual) | April 15, June 15, September 15, January 15 |
Vermont Sales Tax
State Sales Tax Rate
Vermont's state sales tax rate is 6%. The average combined state and local rate is approximately 6.36%, as Vermont has limited local sales taxes.
Taxable vs. Exempt Goods & Services
| Category | Status | Notes |
|---|
| Tangible Personal Property | ✅ Taxable | Most tangible goods subject to 6% rate |
| SaaS / Digital Products | ✅ Taxable | Electronically delivered software and digital goods are taxable |
| Groceries / Food | ❌ Exempt | Unprepared food for home consumption is exempt; prepared food is taxable |
| Prescription Drugs | ❌ Exempt | Prescription medicines are fully exempt |
| Clothing | ✅ Taxable | Clothing is generally taxable in Vermont |
| Manufacturing Equipment | ⚠️ Partial | Machinery used directly in manufacturing may qualify for exemption |
| Professional Services | ❌ Exempt | Most professional services are not subject to sales tax |
Sales Tax Permits & Registration
- Registering Agency: Vermont Department of Taxes — tax.vermont.gov
- Cost to Register: No fee to obtain a Vermont Sales Tax Permit
- Renewal Requirement: No renewal required; permit remains active as long as business is operating
Filing Frequency & Deadlines
| Annual Tax Liability | Filing Frequency | Due Date |
|---|
| Less than $500/year | Annual | January 25 following tax year |
| $500 – $2,999/year | Quarterly | 25th of month following quarter end |
| $3,000 or more/year | Monthly | 25th of following month |
Local Sales Tax Rates (Top Counties/Cities)
| Jurisdiction | Local Rate | Combined Rate |
|---|
| Burlington | 1% | 7% |
| Montpelier | 1% | 7% |
| Rutland | 1% | 7% |
| South Burlington | 1% | 7% |
| Statewide (no local tax) | 0% | 6% |
Vermont Payroll Tax & Compliance
Employer Payroll Tax Obligations
| Tax Type | Detail |
|---|
| State Income Tax Withholding | 3.35% – 8.75% based on employee's Form W-4VT and wages |
| SUI/SUTA Rate Range | 0.4% – 5.4% |
| SUI Taxable Wage Base | $14,100 per employee (2026) |
| New Employer SUI Rate | 1.0% |
| Workers' Compensation | Private insurance required; Department of Labor oversees |
| Paid Family Leave | State Voluntary Program; employers may opt in — rate varies |
| State Disability Insurance | No mandatory state disability insurance program |
Withholding Registration & Filing
- Registration Agency: Vermont Department of Taxes — tax.vermont.gov
- Filing Frequency: Semi-weekly (liability $6,000+/quarter); monthly (under $6,000/quarter); quarterly (under $600/quarter)
- Annual Reconciliation Deadline: January 31 (Form WHT-436)
- New Hire Reporting Deadline: Within 10 days of hire to Vermont New Hire Reporting Center
Minimum Wage
| Category | Rate |
|---|
| Standard Minimum Wage | $14.01 per hour (2026) |
| Tipped Employee Rate | $6.99 per hour (must reach minimum with tips) |
| Youth / Training Wage | 85% of minimum wage for employees under 18 for first 90 days |
| Next Scheduled Increase | January 1, 2027 (CPI-indexed adjustment) |
Vermont Property Tax
- Assessment Ratio: 100% of fair market value (listed value)
- Effective Average Rate: ~1.78%
- Assessment Cycle: Annual reappraisal; conducted by town listers
- Appeal Deadline: Within 14 days of receiving grievance notice from town listers
Business Personal Property Tax
Vermont does tax business personal property including equipment and inventory. Businesses must file a personal property declaration with their town or city annually. The filing deadline is typically April 1 each year. There is no universal statewide exemption threshold, though municipalities may offer limited exemptions.
Homestead & Other Exemptions
| Exemption Type | Amount / Rate | Eligibility |
|---|
| Homestead Declaration | Separate homestead education tax rate (lower than non-homestead) | Vermont resident declaring primary residence by April 15 |
| Senior / Elderly | Property Tax Adjustment credit available | Income-based; age 65+ or receiving Social Security disability |
| Veteran / Disabled | Up to $40,000 reduction in assessed value | Qualifying veterans with service-connected disabilities |
| Agricultural | Current use (Act 68) — reduced assessment | Enrolled farmland assessed at agricultural use value |
Property Tax Due Dates
| Installment | Due Date |
|---|
| Installment 1 | August 15 (varies by municipality) |
| Installment 2 | November 15 (varies by municipality) |
| Early-Payment Discount | Some municipalities offer 1%–2% discount for payment by July 1 |
Other Key Vermont Taxes
Franchise / Privilege Tax
Vermont does not impose a separate franchise or privilege tax. Corporations are subject only to the corporate income tax described above. The minimum corporate income tax of $300 serves as the effective minimum tax for incorporated entities.
Gross Receipts Tax
Vermont does not impose a general gross receipts tax on businesses. Certain industries such as telecommunications are subject to specific gross receipts-based assessments, but no broad-based gross receipts tax applies.
Excise Taxes
| Product | Rate |
|---|
| Gasoline | $0.186 per gallon |
| Diesel | $0.28 per gallon |
| Cigarettes | $3.08 per pack (20 cigarettes) |
| Beer | $0.265 per gallon |
| Wine | $0.55 per gallon |
| Cannabis | 14% retail sales tax + 6% state sales tax |
Vermont Tax Credits & Incentives
| Credit / Incentive | Value / Rate | Eligibility |
|---|
| Vermont Employment Growth Incentive (VEGI) | Performance-based cash incentive | Businesses creating qualifying new payroll, jobs, and capital investment |
| Research & Development Tax Credit | Up to 27% of federal R&D credit | Qualified R&D expenditures incurred in Vermont |
| Historic Preservation Tax Credit | Up to 10% of qualified rehabilitation costs | Certified historic structures undergoing substantial rehabilitation |
| Working Lands Enterprise Initiative | Grants up to $200,000 | Agricultural and forest businesses supporting Vermont's working lands economy |
| Clean Energy Development Fund | Incentive grants vary | Renewable energy projects and energy efficiency investments |
| Affordable Housing Tax Credit | Up to $4,500,000 annually (statewide) | Qualified low-income housing projects under IRS Section 42 |
| Export Trade Assistance Program | Up to 50% reimbursement | Vermont small businesses expanding into international markets |
How to Register a Business in Vermont
- Choose a Business Structure: Select from LLC, Corporation, Partnership, Sole Proprietorship, or other entity type based on liability and tax needs.
- Register with the Secretary of State: File Articles of Organization (LLC) or Articles of Incorporation (Corporation) with the Vermont Secretary of State. Fee: $125 for LLC; $75 for Corporation. Online filing at sos.vermont.gov.
- Obtain an EIN from the IRS: Apply for a Federal Employer Identification Number at irs.gov — required for tax filing, hiring, and banking purposes.
- Register for State Tax Accounts: Register for withholding tax, sales and use tax, and business income tax with the Vermont Department of Taxes at tax.vermont.gov.
- Register for Unemployment Insurance: Register with the Vermont Department of Labor at labor.vermont.gov to establish your SUI/SUTA account.
- Obtain Required Licenses & Permits: Depending on your industry, obtain applicable state professional licenses through the relevant Vermont licensing board or agency.
- Register for Local Business License: Contact your local municipality (city or town clerk) to obtain any required local business licenses or zoning permits.
Key Vermont Tax Agencies & Resources
| Agency | Responsibility | Website |
|---|
| Vermont Department of Taxes | Corporate income tax, individual income tax, sales tax, withholding | tax.vermont.gov |
| Vermont Department of Labor | Unemployment insurance, wage law, new hire reporting | labor.vermont.gov |
| Vermont Secretary of State | Business registration, entity filings, licensing | sos.vermont.gov |
| Vermont Tax Appeals & Board of Abatement | Tax appeals, abatement requests, dispute resolution | tax.vermont.gov/appeals |
Simplify Your Vermont Tax Compliance with Filings.us
Managing Vermont's corporate income tax, sales tax, payroll obligations, and property tax requirements can be complex. Filings.us makes it simple:
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Visit filings.us to get started today.
Note: This guide is for informational purposes only and does not constitute legal or tax advice. Consult a licensed tax professional for advice specific to your situation.
