How does Vermont’s tax code compare? Vermont has a graduated state individual income tax, with rates ranging from 3.35 percent to 8.75 percent. Vermont has a graduated corporate income tax, with rates ranging from 6.0 percent to 8.5 percent. Vermont also has a 6.00 percent state sales tax rate and an average combined state and local sales tax rate of 6.39 percent. Vermont has a 1.42 percent effective property tax rate on owner-occupied housing value.
Vermont has an estate tax. Vermont has a 31.39 cents per gallon gas tax rate and a $3.08 cigarette excise tax rate (per pack of 20 cigarettes). The State of Vermont collects $8,158 in state and local tax collections per capita. Vermont has $5,806 in state and local debt per capita and a 67 percent funded ratio of public pension plans. Vermont’s tax system ranks 42nd overall on the 2026 State Tax Competitiveness Index.
Each state’s tax code is a multifaceted system with many moving parts, and Vermont is no exception. The first step toward understanding Vermont’s tax code is knowing the basics. How does Vermont collect tax revenue? Click the tabs below to learn more! You can also explore our state tax maps, which are compiled from our annual publication, Facts & Figures 2025: How Does Your State Compare?
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The State Tax Competitiveness Index enables policymakers, taxpayers, and business leaders to gauge how their states’ tax systems compare. While there are many ways to show how much state governments collect in taxes, the Index evaluates how well states structure their tax systems and provides a road map for improvement.
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