Vermont Basic Business Taxes 2011
Vermont's economic development, finance and tax organizations provide a range of incentive programs to initiate new business and commercial investment. Specific programs include a corporate income tax, general sales tax, pollution-control equipment tax exemption, and energy and fuel conservation measures.
Vermont has a corporate income tax that applies to taxable income allocated or apportioned to Vermont as follows: $0 to $10,000, 6 percent; $10,001 to $25,000, 7 percent; $25,001 and more, 8.5 percent.
General sales tax:
Vermont's general sales tax rate is 6 percent of taxable sales, purchases, charges and rentals. Use tax applies to storage, consumption, or use of tangible personal property or services. Unless already subject to sales tax; meals and rooms taxed at 9 percent. There are 44 exemptions, including food, clothing with purchase price of $110 or less, medicines, machinery and equipment used in manufacturing, fuel and electricity used in residences, and fuels used at manufacturing sites of tangible personal property for sale.
Meals and rooms tax:
The meals and rooms tax rate is 9 percent. The tax on sale of alcoholic beverages is 10 percent.
The base education tax rate for homestead property is $0.87 per $100 assessed value. The base tax rate for nonresidential property is $1.36 per $100 of assessed value. A statewide education tax is imposed on these two classes of property at different rates (32 V.S.A. Chapter 135). The basis for this classification is the Homestead Declaration. Any property that is not a homestead is nonresidential property. The homestead education tax rate in each municipality depends upon the local per pupil spending. Both the homestead and nonresidential education tax rates are adjusted by the local common level of appraisal. Each town will receive notice on or about June 30 of the education rates to be levied.
Property transfer tax:
There is a tax of 1 1/4 percent (.0125) of the value of real property that is to be paid by the purchaser of the property. However, on the first $100,000 of the value of property purchased as a principal residence, the rate is one-half of 1 percent (.005). This lower rate may also apply to transfers of certain farm and forest lands enrolled in the state's use-value appraisal programs.
Land gains tax:
There is a land gains tax on the gain from sale or exchanges of land (not buildings or structures) if the land has been held by the seller for fewer than six years and the land is not part of the first 10 acres beneath or contiguous to the seller's principal residence. Land purchased to build a principal residence may be exempt if certain conditions are met. "Land" includes timber rights purchased and sold within six years provided that the underlying land is also sold within six years.
Pollution-control equipment tax exemption:
Real and personal property used to control air or water pollution is exempt from property taxation.
Energy and fuel conservation measures:
Alternative energy sources used to generate electricity or energy not sold or exchanged may be exempted by municipalities from property taxation.
Vermont State Contact:
Vermont Department of Economic Development
National Life Building, Drawer 20
Montpelier, VT 05620
Incentive and tax information is provided to Area Development by each state's economic development or commerce agency for information purposes only and is subject to revision at any time by the state government. Please contact the state agency directly for full requirements and offerings.