The State of Vermont has no inventory tax, county tax, local sales tax or local corporate net worth tax. In addition, there is no sales tax on manufacturing equipment if purchased for use in a direct manufacturing process. There is a 6% Vermont Sales Tax (as of October 1, 2003), and a 9% Rooms and Meals Tax and 10% tax on alcoholic beverages. Property taxes will depend upon the individual community in which the business is located.

The corporate income tax is a tax on the income earned or received in Vermont by every taxable corporation. This tax is a percentage of the corporation's apportioned net income as prescribed by statute, but not less than minimum tax of $250. Small farm corporations have a minimum tax of $75.No tax is due if the corporation did not earn or receive any income during the year, but a return must be filed if the corporation is required to file a corporate tax return. Every taxable corporation must register with the Vermont Department of Taxes, and any corporation that is incorporated in Vermont is a taxable corporation. A foreign corporation is taxable if it derives income from a trade, business, or activity in Vermont. The Vermont corporate tax rate is broken down into the following brackets:

C Corporation Income Tax

Corporations doing business in other states determine the percentage of total income to Vermont income by using 3 factors – payroll, property and sales.  The double-weighted sales factor calculation uses payroll, property, sales twice then divide by 4 to arrive at the percentage of Vermont income. 

Vermont's corporate income tax is a tax on the "Vermont net income" of a corporation that is attributable to Vermont. "Vermont net income" generally means federal taxable income, which includes interest from other state and local obligations in other states other than Vermont. State and local income taxes paid to other jurisdictions and deducted from federal income are added back as taxable Vermont income. If a corporation's income is derived in part from activities conducted outside the state, the percentage of its "Vermont net income" that is attributable to Vermont is determined by applying the standard three-factor apportionment formula that compares the corporation's Vermont property, payroll, and sales to its total property, payroll, and sales. Depreciable property is included in the property factor at net book value. Income tax withholding is the deduction of the Vermont individual income tax from wages or payments that are subject to the Vermont income tax.  Vermont's personal income tax is calculated as a function of federal income tax is calculated as a function of federal income tax.