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A Focus On Vermont

Monika Miles

The gold standard for fall foliage takes us to Vermont. With 75% of the state covered in forest and having the most land coverage of maple trees per capita, Vermont’s foliage season is the most vibrant. With its thousands of acres of alpine terrain, it is a popular destination for snowboarders and skiers. Trout fishing, lake fishing, ice fishing and hunting are also popular pastimes for residents and tourists alike. In the fall, hikers can catch some unforgettable views.

Vermont is attractive for more than just its environment. Vermont is also known for the manufacture and sale of artisan foods, fancy foods and novelty items such as Cabot Cheese, the Vermont Teddy Bear Company (where visitors can build their own Teddy Bear), Burton Snowboards and Ben and Jerry’s Ice Cream (where tours end by tasting your favorite flavor).

Each year, maple lovers travel to St. Albans to celebrate everything maple at the Vermont Maple Festival. Besides syrup, sugar makers also create maple jelly, maple granola, maple mustard, maple coated nuts, maple grilling sauce and maple BBQ sauce, just to name a few.

As an historic leader in U.S. snow sports, Vermont is home to America’s first alpine snow tow, built over 8 decades ago on Woodstock farm in 1934. The state also had the first chairlift in the nation, built on Mt. Mansfield in 1940.

Business Climate

As of 2015, Vermont continued to be the leading producer of maple syrup in the U.S. producing over 1.3 million gallons of maple syrup. This relatively small state generates 42% of the country’s maple syrup.

Tourism is an important industry in Vermont and is strongly encouraged by the state. Some of the largest ski slopes in the U.S. are located in Vermont. A true winter destination, Vermont is home to 19 alpine ski resorts, boasting both alpine and Nordic trails. Other areas designed to attract tourists are Vermont’s state parks, historic sites, museums, golf courses, and boutique hotels with spas. In 2011, the state government earned $274 million in taxes and fees from tourism with 89% of the money from out-of-state visitors. Tourism supported over 26,000 jobs and 7.21% of the total employment.

Tax Climate

Vermont’s individual income tax system consists of 5 brackets with a top rate of 8.95%. The top rate ranks 6th among states that levy an individual income tax, resulting in state and local tax collections amounting to $1,057 per person in 2013, the 21st highest nationally.

The corporate income tax system has 3 brackets with the top bracket at 8.5%. The top rate ranks 10th highest among states levying a corporate income tax. Actual corporate tax collections ranked lower, at 15th nationwide.

Vermont levies a 6% general sales or use tax on consumers, which is nearly identical to the national median of 5.95%. Vermont’s state and local governments collect $571 per person in general sales taxes and $1,029 per person in excise taxes, for a combined figure of $1,599. This is the 20th highest nationally.

Looking at the complete picture of tax collections, Vermont rates very high nationally- 5th highest. Rounding out the picture for personal taxes, state and local governments collected approximately $2,331 per person in property taxes in 2013.

Tax Incentives and Credits

Tax credits provide incentives to support business growth and activities in Vermont. These include:

Investment Tax Credit-This incentive encourages investment in rehabilitation projects, energy, qualifying advanced coal projects, qualifying gasification projects, and qualifying advanced energy project credits. The project must be eligible for and receive the federal tax credit to receive the Vermont tax credit. Under this credit, businesses receive 24% of the investment tax credit attributable to the Vermont property portion of the investment.

Machinery and Equipment– This is for businesses that contribute substantially to the economy of a Vermont Rural Economic Area Partnership (REAP) Zone. To qualify, the business must:

  • Be located in a REAP Zone
  • Create, produce, or process tangible personal property for sale
  • Propose to make qualified capital expenditures

Research and Development (R&D) Credit– Companies may qualify for the state R&D credit on eligible expenditures for Research and Development activities in Vermont. This credit can be taken in an amount equal to 27% of the federal tax credit allowed in the taxable year. This credit applies to personal income tax, business or corporate income tax. Any unused credit may be carried forward up to 10 years.

Vermont Entrepreneur’s Seed Capital Fund– The aim of this credit is to increase the amount of investment capital available to businesses to aid in their expansion. The amount of credit is the first $7.15 million of capitalization contributed by taxpayers on or before January 1, 2020, and has a four year carryforward period. This credit limitation is the lessor of 4% of the business’ contribution or 50% of their tax liability prior to receiving this credit. However, the total amount of this credit taken over four years cannot exceed 20% of the taxpayer’s contribution to the initial $7.15 million capitalization of the fund. The credit is nontransferable except from an involuntary transfer of interest in the credit.

For more information on these tax credits, see the Vermont Department of Taxes.

Random Facts

  • The Vermont Teddy Bear Factory, located in Shelburne, is one the most popular attractions in the state.
  • Vermont is known for having over 100 19th Century covered bridges.
  • It is the 7th coldest state in the country.
  • The state receives between 2,000 – 2,400 hours (83 to 100 days) of sunshine annually.
  • Lake Champlain, the major lake in Vermont, is the sixth largest body of fresh water in the United States.
  • The name Vermont likely comes from the French les Vets Monts, meaning “the Green Mountains.”
Monika Miles

Monika founded Miles Consulting Group which focuses on multi-state tax consulting, helping clients navigate state tax issues such as sales tax and income tax in interstate commerce, including e-commerce.

Prior to forming the firm, Monika worked for 12 years combined in Big 4 Public Accounting and private industry. Monika has provided such services as federal and state income/franchise tax compliance and consulting, sales/use tax consulting, audit support, and credits and incentives reviews. She has served clients in a variety of industries including manufacturing, technology, telecommunications, construction, utility, retail and financial institutions.

Monika graduated from the University of Texas at El Paso (UTEP) with a BBA in Accounting/Finance and has a Masters in Taxation from San Jose State University.