Flat-Fee Tax Preparation for Vermont Residents

Vermont has a graduated income tax with rates from 3.35% to 8.75% — one of the higher top rates in New England

Vermont taxes capital gains as ordinary income — no preferential long-term rate at the state level

VT partially taxes Social Security benefits for higher-income taxpayers — SS benefits are fully included above the phase-out threshold

Vermont's property transfer tax is 1.25% for buyers (0.5% on the first $100,000 of a principal residence) — a moderate transactional cost

Vermont imposes an estate tax on estates over $5M with rates from 16% — relevant for VT real estate investors and business owners

The VT pass-through entity tax election is available for eligible entities for SALT cap planning

Vermont does not conform to all federal depreciation — partial conformity creates differences between federal and VT returns

VT ski resort short-term rentals are a major market — subject to VT rooms and meals tax (9%) plus applicable municipal taxes

Vermont Real Estate Tax

Vermont's real estate market includes Burlington metro and ski resort communities (Stowe, Killington). The $5M estate tax threshold and no preferential capital gains rate make Vermont moderately tax-intensive for real estate investors. Short-term ski rentals face VT rooms and meals tax. Property appreciation in resort areas creates planning needs for long-time owners.

Vermont Business Tax

Vermont businesses face a high top income tax rate and the estate tax for larger estates. The PTET election provides SALT cap relief. VT's non-conformity with federal depreciation requires tracking separate state depreciation schedules. The ski tourism economy creates specialized short-term rental and hospitality tax obligations.

Do I need to file a Vermont state tax return?

If you are a Vermont resident or earned VT-source income above the filing threshold, you must file a VT IN-111. Vermont taxes residents on worldwide income at graduated rates up to 8.75%. Non-residents with VT-source income, including ski resort rental income and wages from VT employers, must file a VT non-resident return.

Does Vermont have an estate tax?

Yes. Vermont imposes an estate tax on taxable estates over $5 million, with a flat rate of 16%. While the $5M threshold is not as low as some states (OR at $1M, ME at $6.8M), the 16% rate is relatively high. VT business owners and real estate investors with growing asset values should plan for VT estate tax well in advance.

What makes Vermont taxes unique?

Vermont taxes capital gains as ordinary income (no preferential long-term rate), has a relatively high top income tax rate, and applies a flat 16% estate tax. The partial non-conformity with federal depreciation creates return preparation complexity. The ski tourism economy makes rooms and meals tax compliance a major ongoing obligation for resort property owners.

Does Vermont have a pass-through entity tax?

Yes. Vermont offers a pass-through entity tax election for eligible S-corps and partnerships. The entity pays VT income tax at the entity level, deductible on the federal return as a business expense. This provides SALT cap relief for VT business owners. Given VT's high top rate and the potential interaction with the estate tax, the PTET election should be evaluated alongside overall entity and estate planning.