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 0.36% in additional sales taxes.
However, the average combined sales tax rate in Vermont is 6.36%, 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 2024.
- 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 2023 tax return.
- Your household income must not have exceeded $128,000 in 2023.
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
-
Is Costco Stock Still a Buy After Earnings?Costco stock is slightly higher Friday after the warehouse club beat expectations for its fiscal first quarter. Here's what Wall Street has to say.
-
Broadcom Stock Is the Best S&P 500 Stock After EarningsBroadcom stock is soaring Friday after the chipmaker beat earnings expectations for its most recent quarter, fueled by AI demand. Here's what you need to know.
-
Retirement Abroad? Three Countries Without Inheritance TaxRetirement Taxes These 2025 top-retiree-friendly countries have an added benefit: potential tax savings for you and your heirs.
-
Five Tax-Savvy Ways To Donate This Holiday SeasonCharitable Donations Food pantries, toy drives, and animal sanctuaries are popular ways to support others year-round.
-
Tax Pros: Is Someone Fraudulently Filing Returns With Your PTIN?Tax Filing An unmonitored preparer tax identification number (PTIN) can lead to serious issues.
-
Are You a Renter? You Could Save on TaxesTax Breaks With these tax savings at your fingertips, rent may be more affordable
-
2025 Open Enrollment: Some DACA Recipients Can Purchase Affordable Care Act Health InsuranceOpen Enrollment Your eligibility to purchase health insurance from the federal marketplace may have changed. Here's what you need to know.
-
Holiday Office Party Taxes: Know Before You GoTax Tips The IRS could tax your gifts from Christmas raffles, Secret Santa, and White Elephant. Here’s how.
-
New Mexico Small Business Saturday Tax Holiday 2024Tax Holiday Here's how you can save on taxes during New Mexico’s Small Business Saturday.
-
Holiday Shopping Tax Tips for Business OwnersTax Deductions Before hitting the sales, businesses should know these key deductions and look out for overspending.
