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Kiplinger: Vermont among 'Least Tax Friendly'

Fri, 10/13/2017 - 12:18 -- tim
Kiplinger Tax Map

Vermont Business Magazine Vermont continues to rank as a "high tax" state. Kiplinger, a national business forecasting firm, has released its rankings of the best and worst states for taxes. The list was unveiled as part of Kiplinger’s fifth annual Tax Map, which 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 has high taxes on income and property, but is relatively low on sales.

“As Congress mulls a new federal tax plan that may cut rates and eliminate deductions, Americans should also keep an eye on state and local taxes,” said Robert Long, Managing Editor at Kiplinger.com. “Depending on where you’re living, state income taxes and property taxes cost thousands of dollars every year. Now, more than ever, Kiplinger.com’s Tax Map is an essential tool for people of all ages, backgrounds and career stages.”

The 10 Most Tax-Friendly States:

  1. Wyoming
  2. Alaska
  3. South Dakota
  4. Florida
  5. Nevada
  6. North Dakota
  7. Delaware
  8. Arizona
  9. Louisiana
  10. Mississippi

The 10 Least Tax-Friendly States:

  1. Maryland
  2. Minnesota
  3. New York
  4. Illinois
  5. Maine
  6. Vermont
  7. Hawaii
  8. California
  9. Connecticut
  10. New Jersey

Vermont

The Bottom Line

Map of VermontLeast 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. Municipalities can add 1% to that, but the average combined rate is 6.17%. Clothing and shoes are exempt. No sales tax on groceries. Soda, however, is taxable.

Income Tax Range

Low: 3.55% (on up to $37,950 of taxable income for singles and up to $63,350 for joint filers)

High: 8.95% (on taxable income over $416,700 for single filers and over $421,900 for joint filers)Low: 3.55% (on up to $37,950 of taxable income for singles and up to $63,350 for joint filers)

High: 8.95% (on taxable income over $416,700)

Effective tax rate: 3.6%/individual, 5.2%/joint

Motor Fuel Taxes

Gasoline: Gasoline: $0.30 per gallon.
Diesel: Diesel: $0.32 per gallon.

Property Taxes

The median property tax on Vermont's median home value of $217,500 is $3,795.

See Kiplinger.com’s Retiree Tax Map for details on tax breaks for seniors in Vermont.

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 methodology

The 2017 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 sales taxes and more.

The Tax Map is a sister project to Kiplinger’s annual Retiree Tax Map—which reveals senior tax breaks across all 50 states, and compares taxes on income (including Social Security benefits, pensions and other forms of retirement income), property, everyday purchases, and, ultimately, your estate.

About 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. 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.

See more from the Kiplinger Tax Map collection

SOURCES: WASHINGTON, D.C. — Kiplinger. 10.6.2017. State tax departments, the American Petroleum Institute, the Tax Foundation, the American Hotel & Lodging Association and the Distilled Spirits Council of the United States.