Vermont

The Facts on Vermont's Tax Climate

Here are some basic facts on Vermont's tax system and how it compares to other states:

Tax Freedom Day Arrives on April 10 in Vermont
Tax Freedom Day is the day when Americans finally have earned enough money to pay off their total tax bill for the year. In 2011, Vermont taxpayers work until April 10 to pay their total tax bill, ranking it 18th highest in the nation. This is 2 days earlier than the national Tax Freedom Day of April 12. The Tax Freedom Days of neighboring states are: New Hampshire, April 9 (ranked 22nd); New York, April 24 (ranked 3rd); and Massachusetts, April 14 (ranked 10th).
Full study of Tax Freedom Day, nationwide and in each state

Vermont's State and Local Tax Burden Among Nation's Highest
Vermont's state and local tax burden is currently estimated at 10.2% of income (8th nationally), above the national average of 9.8%. Compared to the 1977 data, Vermont had a tax burden of 11.6% (6th nationally), decreasing 1.4% overall. Currently Vermont taxpayers pay $4,181 per capita in state and local taxes.
Vermont's State-Local Tax Burden, 1977-Present
Other States' State/Local Tax Burdens
Map of U.S. Showing all State's Burdens and Ranks
Historical Chart Comparing All States' State/Local Tax Burdens from 1977 to 2009

Vermont's 2012 Business Tax Climate Ranks 47th
Vermont ranks 47th in the Tax Foundation's State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property. Ranks of neighboring states are as follows: New Hampshire (6th), New York (49th) and Massachusetts (24th).
50-State Comparison of Business Tax Climates (data only)
2012 State Business Tax Climate Index (full study)

Vermont's Individual Income Tax System
Vermont's income tax system is composed of five brackets with a top rate of 8.95% kicking in at $373,650. Among states levying individual income taxes, Vermont's top rate ranks 8th highest nationally. Vermont's 2008 state-level individual income tax collections were $1,004 per person, which ranked 18th highest nationally.
50-State Table of Individual Income Tax Rates
50-State Table of State Individual Income Tax Collections
50-State Table of State and Local Individual Income Tax Collections Per Capita

Vermont's Corporate Income Tax System
Vermont's corporate tax system has three brackets and a top rate of 8.5% on income over $25,000. This top rate ranks 11th highest nationally. In 2006, state-level corporate tax collections (excluding local taxes) were $137 per capita, which ranked 25th highest nationally.
50-State Table of Corporate Income Tax Rates, 2000-2009
50-State Table of State and Local Corporate Income Tax Collections Per Capita and Per Household, 2005
50-State Table of State Corporate Income Tax Collections Per Capita, 2006

Vermont's Sales and Excise Taxes
Vermont's sales tax rate stands at 6%, slightly above the national median of 5.85%. In 2007 combined state and local general and selective sales tax collections were $1,380 per person, which ranks 24th highest nationally. Vermont's gasoline tax stands at 24.5 cents per gallon, which ranks 36th highest nationally. Vermont's cigarette tax stands at $2.24 per pack of twenty and ranks 8th highest nationally.
50-state table of sales, cigarette, gas, beer, wine, and spirits tax rates
50-State Table of State and Local General and Selective Sales Tax Collections Per Capita

Vermont Property Taxes: Comparatively High
Vermont is one of the 37 states that collect property taxes at both the state and local levels. Like most states, local governments collect a majority of the tax. Vermont's localities collected $522.29 per capita in property taxes in fiscal year 2006, which is the latest year the Census Bureau published state-by-state property tax collections. At the state level, Vermont collected $1,329.09 in per capita property taxes during FY 2006, making its combined state/local property taxes $1,851.37 per capita, which ranks 6th highest nationally.
State property tax collections per capita by state

Federal Tax Burdens and Expenditures: Vermont is a Beneficiary State
Vermont taxpayers benefit slightly more than the average state from federal spending. Per dollar of Federal tax collected, Vermont citizens receive approximately $1.08 in the way of federal spending. This ranks Vermont 26th among all states. In 1995, Vermont received $1.03 in federal spending for every dollar of collected federal taxes (ranked 29th highest). Neighboring states and the amount of federal spending received compared to federal taxes paid were: Massachusetts ($0.82), New Hampshire ($0.71), and New York ($0.79).
Comparing the amount of federal taxes sent to Washington with the amount of federal spending coming back to the state

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