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 6.36 percent. Vermont has a 1.56 percent effective property tax rate on owner-occupied housing value.
Vermont has an estate tax. Vermont has a 32.61 cents per gallon gas tax rate and a $3.08 cigarette excise tax rate. The State of Vermont collects $7,527 in state and local tax collections per capita. Vermont has $7,299 in state and local debt per capita and has a 63 percent funded ratio of public pension plans. Vermont’s tax system ranks 43rd overall on the 2025 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 towards 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 2024: 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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Facts & Figures serves as a one-stop state tax data resource that compares all 50 states on over 40 measures of tax rates, collections, burdens, and more.
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Tax burdens rose across the country as pandemic-era economic changes caused taxable income, activities, and property values to rise faster than net national product. Tax burdens in 2020, 2021, and 2022 are all higher than in any other year since 1978.
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Individual income taxes are a major source of state government revenue, accounting for more than a third of state tax collections. How do income taxes compare in your state?
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Graduated corporate rates are inequitable—that is, the size of a corporation bears no necessary relation to the income levels of the owners.
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Retail sales taxes are an essential part of most states’ revenue toolkits, responsible for 32 percent of state tax collections and 13 percent of local tax collections (24 percent of combined collections).
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Krispy Kreme may have started the vaccine incentive ball rolling, but many states are putting big money into the effort with vaccine lotteries. Unlike a normal lottery, no one is paying for tickets—but the tax collector still gets paid when someone wins.
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State taxation of GILTI is unconventional and economically uncompetitive and will become even more so if the federal government adopts a more aggressive approach to taxing GILTI, as outlined in the American Jobs Plan Act.
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A landmark comparison of corporate tax costs in all 50 states, Location Matters provides a comprehensive calculation of real-world tax burdens, going beyond headline rates to demonstrate how tax codes impact businesses and offering policymakers a road map to improvement.
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Tax cut legislation is not just a red state phenomenon, and tax reductions come in many forms other than rate reductions. The American Rescue Plan Act’s state tax cuts limitation is a problem for more states than you think.
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The legalization and taxation of recreational marijuana remains one of the hottest trends in state taxation.
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