Kate Schubel
Vermont state tax: Overview
Vermont has four income tax brackets, and the state still taxes Social Security benefits for some filers. Property taxes are high when compared to most other states, and Vermont also has an estate tax.
However, the sales tax rate in Vermont is about average, and many types of essential items are tax-exempt.
[Data for this state tax guide was gathered from a number of sources including the Census Bureau, the state’s government website, the Sales Tax Handbook, and the Tax Foundation. Property taxes are cited as a rate percentage rather than the assessed value.]
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Vermont income tax
Vermont has a graduated state individual income tax rate ranging from 3.35% to 8.75%, according to the Tax Foundation.
Vermont tax on retirement benefits: Social Security benefits are exempt for joint filers with an adjusted gross income (AGI) of $65,000 or less.
Additionally, Vermont offers a deduction of up to $10,000 for some types of retirement income. However, income requirements apply. Railroad Retirement benefits are tax-exempt in Vermont.
Vermont sales tax
Vermont's state sales tax rate is 6%. Localities can add up to 0.366% in additional sales taxes.
However, the average combined sales tax rate in Vermont is 6.366%, according to the Tax Foundation. Several types of products are exempt from sales tax.
- Groceries: Exempt
- Clothing: Exempt
- Prescription drugs: Exempt
How much are Vermont property taxes?
Vermont has an average effective property tax rate of 1.56%.
Vermont Property Tax Breaks for Retirees
Vermont offers a property tax credit of up to $8,000 to eligible homeowners. Homeowners must meet all of the following requirements to qualify for the credit in 2025.
- Your property must qualify as a homestead (as of April 1), and you must have filed a Homestead Declaration for the current year's grand list.
- You must have been domiciled in Vermont for all of the previous calendar year.
- You must not have been claimed as a dependent on a 2024 tax return.
- Your household income must not have exceeded $115,000 in 2024.
Vermont gas tax
Gasoline: $0.12 per gallon
Diesel: $0.28 per gallon.
Vermont taxes on alcohol and tobacco
| Product | Tax Amount |
| Cigarettes | $3.08 per pack |
| Cigars | $20-$40 per 10 cigars |
| Tobacco/Snuff | $2.57 per ounce |
Source: Sales Tax Handbook
| Product | Tax Amount |
| Wine | $0.55 per gallon |
| Beer | $0.26 per gallon |
| Liquor | state-controlled |
Source: Sales Tax Handbook
Vermont estate and inheritance taxes
Vermont has an estate tax with an exemption of $5 million. The tax rate is a flat 16%.
Related Content
-
'The Best Is Yet to Come' — Four Things You Gain in RetirementRetirement should be a time of exploration, expansion and delight. So if you've done your planning well, enjoy these four retirement perks.
-
What's Up With the 10-Year Treasury Bond: Four Financial Experts Weigh InA financial professional and three colleagues explain the fluctuations in the 10-year Treasury bond and what investors should do.
-
Ten Cheapest Places To Live in New YorkProperty Tax If you’re planning a move in New York, here are the counties with the lowest property tax bills in the Empire State.
-
‘My Etsy Shop is Dead’: Vendors Cry for Help Amid Trump’s TariffsTariffs Small businesses are struggling to thrive as they absorb the Trump administration’s new wave of tariffs.
-
Three Things Star Wars Fans Taught Me About TaxTax Tips May the force be with you and your taxes this Star Wars Day 2025.
-
Retirees: Don’t Miss These Valuable State Tax Breaks in 2025Retirement Planning Selecting the right state for retirement can significantly impact your financial well-being.
-
10 Cheapest Places To Live in FloridaProperty Tax Make your Florida vacation spot a place for daily living — these counties have the lowest property tax bills in the state.
-
Missed Tax Day? Nearly One Million Taxpayers Still Can File and Claim Valuable Tax RefundsTax Refunds As many as one million taxpayers could be missing out on a significant tax refund.
-
Which Generation Pays the Most Tax in the US?Tax Burden Polls show that most people feel like taxes are unfair. But which age group bears the brunt of the tax burden in the United States?
-
Tax Day 2025: Don’t Miss These Freebies, Food Deals and DiscountsTax Day You can score some sweet deals on April 15 in some select restaurants like Burger King, Shake Shack, and more.
