State-by-State Guide to Taxes on Middle-Class Families
Tool | November 2020

Vermont State Tax Guide for Middle-Class Families

State tax rates and rules for income, sales, gas, property, cigarette, and other taxes that impact middle-class families.

Vermont

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The Bottom Line
Flag of Vermont

Not Tax-Friendly

Just across the Connecticut River from no-tax New Hampshire, Vermont is a different place altogether, with income tax rates that reach 8.75%. While sales taxes in the Green Mountain are modest, it's an expensive place to own a home (as well as heat it).

Income Tax Range

Low: 3.35% (on up to $40,350 of taxable income for singles and up to $67,450 for joint filers)

High: 8.75% (on taxable income over for $204,000 for singles and up to $248,350 for joint filers)

Sales Tax

6% state levy. Municipalities can add 1% to that, but the average combined state and local rate is 6.24%, according to the Tax Foundation.

Groceries: Exempt
Clothing: Exempt
Motor Vehicles: Exempt from ordinary sales tax, but taxable under special 6% purchase and use tax
Prescription Drugs: Exempt

Real Property Taxes

In Vermont, the median property tax rate is $1,861 per $100,000 of assessed home value.

Motor Fuel Taxes

Gasoline: 30.48¢ per gallon (29.68¢ per gallon effective July 1, 2021).
Diesel: 32¢ per gallon.

Sin Taxes

Cigarettes: $3.08 per pack
Snuff & other smokeless tobacco: $2.57 per ounce
Cigars: Variable by price; as high as $4 per cigar
Other tobacco products: 92% of wholesale price
Vapor products: 92% of wholesale price

Beer: $0.27 per gallon
Wine: $0.55 per gallon
Liquor: $7.72 per gallon
Liquor tax is an estimate by the Distilled Spirits Council of the United States and published by the Tax Foundation.

Marijuana: Effective March 1, 2022, 14% excise tax, plus general sales tax

Annual Car Taxes and Fees

No annual vehicle tax or fee is imposed.

Estate and Inheritance Taxes

Vermont has an estate tax with an exemption of $5 million for 2021. The tax rate is a flat 16%.


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