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.
115 min read
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.
2 min read
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.
24 min read
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?
8 min read
Graduated corporate rates are inequitable—that is, the size of a corporation bears no necessary relation to the income levels of the owners.
7 min read
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).
9 min read
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).
8 min read
The vaping industry has grown rapidly in recent decades, becoming a well-established product category and a viable alternative to cigarettes for those trying to quit smoking. US states levy a variety of tax structures on vaping products.
4 min read
Different layers of taxation on production and distribution combine to make up about 40 percent of the retail price of beer.
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Newer products like spirits-based hard seltzers and ready-to-drink cocktails have fueled growth, while also blurring the lines of a categorical tax system. The result has been a spirited competition throughout the alcohol industry for market share, including calls to reform tax policy.
3 min read
Gross receipts taxes impose costs on consumers, workers, and shareholders alike. Shifting from these economically damaging taxes can thus be a part of states’ plans for improving their tax codes in an increasingly competitive tax landscape.
7 min read
Gas tax revenues have decoupled from road expenses and have been unable to support road funding in recent years. As such, states nationwide are exploring ways to supplement or replace gas tax revenues.
8 min read
At the end of 2025, the individual tax provisions in the Tax Cuts and Jobs Act (TCJA) expire all at once. Without congressional action, most taxpayers will see a notable tax increase relative to current policy in 2026.
4 min read
States have generally tried to encourage capital investment. Throwback and throwout rules are an unfortunate example of penalizing it.
4 min read
One relatively easy but meaningful step policymakers can take to make future tax seasons less burdensome is to modernize their state’s nonresident income tax filing, withholding, and reciprocity laws.
7 min read
With proposals to adopt the nation’s highest corporate income tax, second-highest individual income tax, and most aggressive treatment of foreign earnings, as well as to implement an unusually high tax on property transfers, Vermont lawmakers have no shortage of options for raising taxes dramatically.
7 min read