Vermont
Taxes and business formation • USA 2025–2026
TL;DR
Vermont at a glance — 2026 figures
State filing fees and tax position for individuals and companies registered in Vermont.
| Parameter | Value |
|---|---|
| Personal income tax | See the income tax section below |
| LLC formation fee | $155.00 |
| LLC annual report fee | $45.00 |
| LLC annual report deadline | March 31 |
| LLC dissolution fee | $20.00 |
| Corporation formation fee | $155.00 |
| Corporation annual report fee | $60.00 |
State filing fees are set by the Secretary of State and change without notice — the official source is linked in each section below. Federal figures for tax year 2026 are on the 2026 tax cheat sheet.
Updated: August 2026
Corporation in Vermont
Tax system of Vermont
Income Tax
Vermont applies a progressive personal income tax scale for individuals, with rates ranging from 3.35% to 8.75% depending on income level and filing status. Income from wages, business, investments, and rentals is subject to taxation. A tax on capital gains also applies and is included in the overall taxable base, although a partial exclusion may be granted for long-term holdings. The state offers standard and individual deductions, tax credits, and support programs for low-income families.
Sales Tax
Vermont's base sales tax rate is 6%, and municipalities may add up to 1% in local tax, bringing the total rate to 7%. The tax applies to most goods, as well as to digital products, cloud services, and certain services. Groceries, prescription medications, and certain medical devices are exempt from taxation. Determining the taxable base and applying the sales tax rate can be quite complex and requires a professional approach and knowledge of state law. Our firm provides services for obtaining a Sales Tax Certificate, as well as for preparing and filing the Sales and Use Tax Return. We advise business owners on matters related to this tax, including registration, calculation, and reporting.
Property Tax
Property tax is levied at the city and school district level. The average effective rate is about 1.71% of market value, which is one of the highest in the country. The rate can vary depending on the area, the purpose the property is used for, and decisions by local authorities. Individuals may receive tax reductions (homestead exemption), and renters can obtain a partial refund of tax through a return.
Business Taxes
Vermont imposes a Corporate Income Tax on owners of C-corporations on a progressive scale: 6.0% on the first $10,000 of profit, 7.0% from $10,001 to $25,000, and 8.5% on profit above $25,000. A Minimum Annual Tax also applies to C-corporations, ranging from $100 to $100,000 depending on gross income. The minimum tax for S-corporations, LLCs, and partnerships is $250 per year. An Annual Report is required for all legal entities (LLCs, corporations, and others). Filing deadlines: within 3 months after the end of the fiscal year for LLCs, and 2.5 months for corporations.
Excise Taxes
Vermont levies excise taxes on alcohol, tobacco, gasoline, medical equipment, and sugary beverages. In addition, there are taxes on car rentals and hotel services.
Estate / Inheritance Tax
Vermont has no gift tax, but it does have an estate tax. The exemption threshold in 2025 is $5 million. Rates start at 16% and can reach 20% depending on the amount exceeding the threshold. This tax applies regardless of the federal estate tax.
Favorable Tax Conditions
The minimum tax on pass-through business is just $250 per year — less than, for example, in New York ($25–$4,500) or California ($800/year). There is also no tax on personal tangible property.
Compared to Other States
Property tax is high, comparable to New Jersey or Illinois. Personal income tax is above the U.S. average, especially for high earners. In addition, an estate tax exists, unlike in most states. Mandatory annual reporting and minimum business taxes also add to the burden.
Frequently asked questions
Does Vermont have a personal income tax?+
Yes. Vermont levies a personal income tax on residents. The current rates and brackets are set out in the income tax section on this page, with a link to the state tax authority — rates are revised by the legislature, so always check the official source before filing.
How much does it cost to register an LLC in Vermont?+
The state filing fee in Vermont is $155.00. On top of that you need a registered agent with a physical address in the state, and FinTaxes charges from $299 for the formation service itself.
When is the annual report due for a Vermont LLC?+
The Vermont annual report fee is $45.00, due March 31. Missing it typically triggers a late penalty and, if left unresolved, administrative dissolution of the company.
Do I need to live in Vermont to open an LLC there?+
No. You do not need to live in Vermont — or in the United States at all — to own an LLC registered there. Non-residents can form and own a US LLC; what the state requires is a registered agent with a physical in-state address. Your own tax residency is a separate question and decides which returns you file.
Can FinTaxes file my Vermont state return remotely?+
Yes. FinTaxes prepares and e-files federal and Vermont state returns entirely remotely, for clients anywhere in the US or abroad, as an Authorized IRS e-file Provider.
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