Vermont Business Magazine Kiplinger has released its ranking of the best and worst states for taxes. Kiplinger’s fourth annual Tax Map—available at Kiplinger.com/links/taxmap—reveals income taxes, sales taxes, gas taxes, “sin” taxes (for products such as alcohol and tobacco) and other tax rules and exemptions across all 50 states and Washington, DC. Vermont is among the Top Ten Least Tax-Friendly states, with relatively high income and property taxes leading the way.
“Where you live can have a dramatic impact on your wallet and savings. The Tax Map is an extremely valuable resource—especially for those considering a move to a different state,” said Sandra Block, senior associate editor at Kiplinger’s Personal Finance. “It’s worth pointing out, though, that there are tradeoffs to living in a state with lower taxes—since there are likely less funds going to roads, bridges, schools and various other public services we may otherwise take for granted.”
The 10 Most Tax-Friendly States:
1. Wyoming
2. Alaska
3. Florida
4. Nevada
5. Arizona
6. Louisiana
8. South Dakota
9. Mississippi
10. Delaware
The 10 Least Tax-Friendly States:
1. California
2. Hawaii
3. Connecticut
4. New York
5. New Jersey
6. Minnesota
7. Maine
8. Vermont
9. Illinois
10. Rhode Island
The 2016 Kiplinger Tax Map features comprehensive tax profiles of each state, a list of the 10 most tax-friendly states and a list of the 10 least tax-friendly states, as well as additional roundups including states with the highest and lowest gas taxes, no income taxes, highest beer taxes and more.
Kiplinger Tax Map
SOURCES: State tax departments, the American Petroleum Institute, the Tax Foundation, the American Hotel & Lodging Association and the Distilled Spirits Council of the United States.
Vermont
The Bottom Line
Least Tax-Friendly
Vermont’s effective tax rates are lower than those imposed in nearby New York, but it’s a pricey place to live if you’re wealthy — among other policies, Vermont limits deductions for high-incomers. Also, Vermont's property taxes are among the ten highest in the U.S., according to the Tax Foundation. It's one of Kiplinger's top ten least tax-friendly states.
Sales Tax
6% state levy. Municpalities can add 1% to that, but the average combined rate is 6.17%. A wide range of clothing as well as nonprescription drugs are exempt. Soda, however, is taxable.
Income Tax Range
Low: 3.55% (on up to $39,900 of taxable income for singles and up to $69,900 for joint filers)
High: 8.95% (on taxable income over $415,600 for single filers and over $421,900 for joint filers)
Motor Fuel Taxes
Gasoline: Gasoline: $0.31 per gallon.
Diesel: Diesel: $0.32 per gallon.
Property Taxes
The median property tax on Vermont's median home value of $214,600 is $3,797.
Vehicle Taxes
Sales tax due on purchases.
Sin Taxes
Cigarettes: $3.08 per pack
Snuff & other smokeless tobacco: $1.87 per ounce
Cigars: Variable by price; as high as $4 per cigar
Beer: $0.27 per gallon (6% alcohol and above, $0.55 per gallon)
Wine: $0.55 per gallon
Liquor: $7.71 per gallon.
Vermont directly controls the distribution and sale of alcohol. Liquor tax is an estimate by the Distilled Spirits Council of the United States and published by the Tax Foundation.
Travel Taxes
Hotel: Lodging tax is 9%, paid in lieu of sales tax. Many municipalities add 1%. The cities of Burlington and Rutland have their own lodging taxes.
Rental cars: 9%
Taxes On Wireless Service
8.5%
Inheritance and Estate Taxes
Vermont has no inheritance tax, but it does have an estate tax if property exceeds $2.75 million. The maximum estate tax rate is 16%.
Kiplinger Tax Map collection
Kiplinger
For nine decades, the Kiplinger organization has led the way in personal finance and business forecasting. Founded in 1920 by W.M. Kiplinger, the company developed one of the nation's first successful newsletters in modern times. The Kiplinger Letter, launched in 1923, remains the longest continuously published newsletter in the United States. In 1947, Kiplinger created the nation's first personal finance magazine. Kiplinger.com is the fastest growing Web site in the personal finance space. Located in the heart of our nation's capital, the Kiplinger editors remain dedicated to delivering sound, unbiased advice for your family and your business in clear, concise language. Become a fan of Kiplinger on Facebook or Kiplinger.com and follow Kiplinger on Twitter, LinkedIn and Tumblr.