If you are a resident or nonresident of Vermont and receive taxable income individually from property owned or business transacted in Vermont, you are subject to tax on net income. Therefore, if you are operating your business as an S corporation, partnership, limited liability company, or sole proprietorship, you will be subject to a personal income tax on your business income that passes through to you.
For the 2009, tax year, the income tax is imposed at rates ranging from 3.55% to 9.4% in six tax brackets. In 2010 the tax will be imposed at rates ranging from 3.55% to 8.95%. The following marginal tax rates and income brackets apply for 2009 (income brackets are adjusted annually):
| Single Individuals |
| Taxable Income |
Marginal Tax Rate |
| Up to $33,950 |
3.55% of taxable income |
| Over $33,950 to $82,250 |
7.0% |
| Over $82,250 to $171,550 |
8.25% |
| Over $171,550 to $372,950 |
8.9% |
| Over $372,950 |
9.4% |
| Married Filing Jointly and Qualifying Widow(er) |
| Taxable Income |
Marginal Tax Rate |
| Up to $56,700 |
3.55% of taxable income |
| Over $56,700 to $137,050 |
7.0% |
| Over $137,050 to $208,850 |
8.25% |
| Over $208,850 to $372,950 |
8.9% |
| Over $372,950 |
9.4% |
| Married Filing Separately |
| Taxable Income |
Marginal Tax Rate |
| Up to $28,350 |
3.55% of taxable income |
| Over $28,350 to $68,525 |
7.0% |
| Over $68,525 to $104,425 |
8.25% |
| Over $104,425 to $186,475 |
8.9% |
| Over $186,475 |
9.4% |
| Heads of Households |
| Taxable Income |
Marginal Tax Rate |
| Up to $45,500 |
3.55% of taxable income |
| Over $45,500 to $117,450 |
7.0% |
| Over $117,450 to $190,200 |
8.25% |
| Over $190,200 to $372,950 |
8.9% |
| Over $372,950 |
9.4% |