32 V.S.A. § 5831 Name of tax
5831. Name of tax
The tax imposed by this subchapter shall be known as the Vermont Corporate Income Tax.
Added 1966, No. 61 (Sp. Sess.), § 1, eff. Jan. 1, 1966.
Taxation of Corporations
V.S.A. tit. 32, ch. 151, subch. 3
in effect32 V.S.A. § 5832 Tax on income of corporations
5832. Tax on income of corporations
A tax is imposed for each calendar year, or fiscal year ending during that calendar year, upon the income earned or received in that taxable year by every taxable corporation, reduced by any Vermont net operating loss allowed under section 5888 of this title, such tax being the greater of:
(1) an amount determined in accordance with the following schedule:
Vermont net income of the corporation | Tax
for the taxable year allocated or
apportioned to Vermont
under section 5833 of this title
$ | 0-10,000.00 | 6.00%
10,001.00-25,000.00 | $600.00 plus 7.0% of the
excess over $10,000.00
25,001.00 and over | $1,650.00 plus 8.5% of the
excess over $25,000.00
or
(2)(A) $75.00 for small farm corporations. “Small farm corporation” means any corporation organized for the purpose of farming, which during the taxable year is owned solely by active participants in that farm business and receives less than $100,000.00 Vermont gross receipts from that farm operation, exclusive of any income from forest crops; or
(B) An amount determined in accordance with section 5832a of this title for a corporation that qualifies as and has elected to be taxed as a digital business entity for the taxable year; or
(C) For C corporations with Vermont gross receipts from $0.00–$500,000.00, the greater of the amount determined under subdivision (1) of this section or $100.00; or
(D) For C corporations with Vermont gross receipts from $500,001.00–$1,000,000.00, the greater of the amount determined under subdivision (1) of this section or $500.00; or
(E) For C corporations with Vermont gross receipts from $1,000,001.00–$5,000,000.00, the greater of the amount determined under subdivision (1) of this section or $2,000.00; or
(F) For C corporations with Vermont gross receipts from $5,000,001.00–$300,000,000.00, the greater of the amount determined under subdivision (1) of this section or $6,000.00; or
(G) For C corporations with Vermont gross receipts greater than $300,000,000.00, the greater of the amount determined under subdivision (1) of this section or $100,000.00.
Added 1966, No. 61 (Sp. Sess.), § 1, eff. Jan. 1, 1966; amended 1969, No. 144, § 10, eff. June 1, 1969; 1973, No. 270 (Adj. Sess.), § 1, eff. date, see note set out below; 1983, No. 144 (Adj. Sess.), § 3, eff. April 12, 1984; 1983, No. 144 (Adj. Sess.), § 6(b), eff. Jan. 1, 1988; 1991, No. 32, § 31, eff. May 18, 1991; 1991, No. 67, § 26c, eff. June 19, 1991; 1997, No. 60, § 73, eff. June 26, 1997; 2003, No. 152 (Adj. Sess.), §§ 3, 4, eff. June 7, 2004; 2005, No. 207 (Adj. Sess.), §§ 14, 16, eff. May 31, 2006; 2009, No. 1 (Sp. Sess.), § H.52, eff. Jan. 1, 2010; 2011, No. 143 (Adj. Sess.), § 16, eff. May 15, 2012; 2019, No. 51, § 7, eff. Jan. 1, 2019; 2021, No. 148 (Adj. Sess.), § 2, eff. Jan. 1, 2023.
32 V.S.A. § 5832a Digital business entity franchise tax
5832a. Digital business entity franchise tax
(a) There is imposed upon every business entity that qualifies as and has elected to be taxed as a digital business entity an annual franchise tax equal to:
(1) the greater of 0.02 percent of the current value of the tangible and intangible assets of the company or $250.00, but in no case more than $500,000.00; or
(2) where the authorized capital stock does not exceed 5,000 shares, $250.00; where the authorized capital stock exceeds 5,000 shares but is not more than 10,000 shares, $500.00; and the further sum of $250.00 on each 10,000 shares or part thereof.
(b) In no case shall the tax on any corporation for a full taxable year, whether computed under subdivision (a)(1) or (2) of this section, be more than $500,000.00 or less than $250.00.
(c) In the case of a corporation that has not been in existence during the whole year, the amount of tax due, at the foregoing rates and as provided, shall be prorated for the portion of the year during which the corporation was in existence.
(d) In the case of a corporation changing during the taxable year the amount of its authorized capital stock, the total annual franchise tax payable at the foregoing rates shall be arrived at by adding together the franchise taxes calculated pursuant to subdivision (a)(2) of this section as prorated for the several periods of the year during which each distinct authorized amount of capital stock was in effect.
(e) For the purpose of computing the taxes imposed by this section, the authorized capital stock of a corporation shall be considered to be the total number of shares that the corporation is authorized to issue without regard to whether the number of shares that may be outstanding at any one time is limited to a lesser number.
(f) The franchise tax under this section shall be reported and paid in the same manner as the tax under subdivision 5832(2)(B) of this title; provided, however, that an electing corporation shall also provide the Commissioner with a copy of its federal tax return.
Added 2009, No. 1 (Sp. Sess.), § H.53, eff. Jan. 1, 2010.
32 V.S.A. § 5833 Allocation and apportionment of income
5833. Allocation and apportionment of income
(a) If the income of a taxable corporation is derived from any trade, business, or activity conducted entirely within this State, the Vermont net income of the corporation shall be allocated to this State in full. If the income of a taxable corporation is derived from any trade, business, or activity conducted both within and outside this State, the amount of the corporation’s Vermont net income that shall be apportioned to this State, so as to allocate to this State a fair and equitable portion of that income, shall be determined by multiplying that Vermont net income by the gross sales, or charges for services performed, within this State, expressed as a percentage of such sales or charges whether within or outside this State.
(1) Sales of tangible personal property are made in this State if: the property is delivered or shipped to a purchaser, other than the U.S. government, who takes possession within this State, regardless of f.o.b. point or other conditions of sale.
(2) Sales, other than the sale of tangible personal property, are in this State if the taxpayer’s market for the sales is in this State. The taxpayer’s market for sales is in this State:
(A) in the case of sale, rental, lease, or license of real property, if and to the extent the property is located in this State;
(B) in the case of rental, lease, or license of tangible personal property, if and to the extent the property is located in this State;
(C) in the case of sale of a service, if and to the extent the service is delivered to a location in this State; and
(D) in the case of intangible property:
(i) that is rented, leased, or licensed, if and to the extent the property is used in this State, provided that intangible property utilized in marketing a good or service to a consumer is “used in this State” if that good or service is purchased by a consumer who is in this State; and
(ii) that is sold, if and to the extent the property is used in this State, provided that:
(I) a contract right, government license, or similar intangible property that authorizes the holder to conduct a business activity in a specific geographic area is “used in this State” if the geographic area includes all or part of this State;
(II) receipts from intangible property sales that are contingent on the productivity, use, or disposition of the intangible property shall be treated as receipts from the rental, lease, or licensing of such intangible property under subdivision (i) of this subdivision (2)(D); and
(III) all other receipts from a sale of intangible property shall be excluded from the numerator and denominator of the receipts factor.
(3) If the state or states of assignment under subdivision (2) of this subsection cannot be determined, the state or states of assignment shall be reasonably approximated.
(4) If the taxpayer is not taxable in a state to which a receipt is assigned under subdivision (2) or (3) of this subsection, or if the state of assignment cannot be determined under subdivision (2) of this subsection or reasonably approximated under subdivision (3) of this subsection, such receipt shall be excluded from the denominator of the receipts factor.
(5) The Commissioner of Taxes shall adopt rules as necessary to carry out the purposes of this section.
(6) A taxable corporation subject to apportionment under this section shall report to the Commissioner of Taxes:
(A) the average of the value of all the real and tangible property within this State at the beginning of the taxable year and at the end of the taxable year, provided the Commissioner may require the use of the average of the value on the 15th or other day of each month in cases where the Commissioner determines that the computation is necessary to more accurately reflect the average value of property within Vermont during the taxable year, expressed as a percentage of all property both within and outside this State; and
(B) the total wages, salaries, and other personal service compensation paid to employees within this State during the taxable year, expressed as a percentage of all compensation paid, whether within or outside this State.
(b) If the application of the provisions of this section does not fairly represent the extent of the business activities of a corporation within this State, the corporation may petition for, or the Commissioner may require, with respect to all or any part of the corporation’s business activity, if reasonable:
(1) separate accounting;
(2) the exclusion or modification of any or all of the factors;
(3) the inclusion of one or more additional factors that will fairly represent the corporation’s business activity in this State; or
(4) the employment of any other method to effectuate an equitable allocation and apportionment of the corporation’s income.
Added 1966, No. 61 (Sp. Sess.), § 1, eff. Jan. 1, 1966; amended 1971, No. 73, §§ 15, 16, eff. April 16, 1971; 1987, No. 82, § 6, eff. June 9, 1987; 2003, No. 152 (Adj. Sess.), § 5, eff. June 7, 2004; amended 2019, No. 51, § 8, eff. Jan. 1, 2020; 2021, No. 148 (Adj. Sess.), § 3, eff. Jan. 1, 2023; 2023, No. 6, § 378, eff. July 1, 2023.
32 V.S.A. § 5834 Computation of gains and losses
5834. Computation of gains and losses
For the purpose of ascertaining gain or loss from the sale or other disposition of property, real, personal, or mixed, acquired before January 1, 1931, the taxpayer may, in lieu of the adjusted basis prescribed by the applicable U.S. Internal Revenue Code, use the fair market value of such property as of January 1, 1931, adjusted for the period subsequent thereto. In all other respects, the gain or loss on the sale or other disposition of property shall be ascertained as prescribed by such Code.
Added 1966, No. 61 (Sp. Sess.), § 1, eff. Jan. 1, 1966.
32 V.S.A. § 5835 Construction of subchapter
5835. Construction of subchapter
Nothing in this subchapter shall be construed to repeal or affect any of the provisions of chapter 211 of this title.
Added 1966, No. 61 (Sp. Sess.), § 1, eff. Jan. 1, 1966.
32 V.S.A. § 5836 Franchise tax on financial institutions
5836. Franchise tax on financial institutions
(a) A tax is imposed for each calendar month or part thereof upon the franchise or privilege of doing business in this State of every corporation that is a financial institution as defined in 8 V.S.A. § 11101(32) that has a business location in this State; provided, however, that a merchant bank organized under 8 V.S.A. § 12603 and an uninsured bank organized under 8 V.S.A. § 12604 shall not be considered to be financial institutions for purposes of the tax imposed by this section.
(b) The tax imposed by this section for each taxable month shall be equal to 0.000096 of the average monthly deposit for such taxable month held in Vermont by the corporation. As used in this section, the word “deposit” shall have the same meaning as the word “deposit” as defined in 12 C.F.R. § 204.2(a)(1). The average monthly deposit for any taxable month shall be determined by the deposits held in Vermont by the corporation on the last business day of each of the 12 months directly preceding the taxable month for which the average monthly deposit is to be determined. The 12 deposits for the preceding 12 months shall be added together and divided by 12 to produce the average monthly deposit for the taxable month in question. In the event a corporation has not been doing business for 12 consecutive months prior to any taxable month for which an average monthly deposit is to be determined, the average monthly deposit for such taxable months shall be based upon the number of months (less than 12) that the bank has been doing business prior to the taxable month in question.
(c) The tax imposed by this section shall be paid monthly to the Commissioner on or before the 25th day of each month for the tax due in the previous month.
(d), (e) [Repealed.]
(f) To the extent they are not explicitly in conflict with the provisions of this section, the provisions of subchapters 6, 7, 8, and 9 of this chapter shall apply to the tax imposed by this section.
(g) A corporation that is subject to the tax imposed by this section shall not be subject to the tax imposed by section 5832 of this title.
(h) When a taxpayer, under this section, transfers all or a portion of its business assets to another corporation that is or will be subject to tax under this section, the transferee corporation shall include, and the transferor shall not include, in the computation of “average monthly deposit” for purposes of subsection (b) of this section, the transferred deposits that were held by the transferor corporation during the 12 months directly preceding the transfer.
(i) An independent trust company established pursuant to 8 V.S.A. chapter 77 is not a financial institution within the meaning of this section.
(j) The Vermont Higher Education Savings Plan shall not be subject to the tax imposed by this section.
Added 1967, No. 157, § 1; amended 1969, No. 144, § 11, eff. June 1, 1969; 1973, No. 270 (Adj. Sess.), § 2, eff. date, see note set out below; 1983, No. 144 (Adj. Sess.), § 5, eff. April 12, 1984; 1991, No. 32, § 29, eff. May 18, 1991; 1995, No. 29, § 29, eff. April 14, 1995; 1995, No. 169 (Adj. Sess.), § 16, eff. May 15, 1996; 1997, No. 60, § 75; 1997, No. 79 (Adj. Sess.), § 3; 1997, No. 98 (Adj. Sess.), § 8d, eff. April 16, 1998; 1999, No. 153 (Adj. Sess.), § 33, eff. Jan. 1, 2001; 2003, No. 152 (Adj. Sess.), § 6, eff. June 7, 2004; 2015, No. 134 (Adj. Sess.), § 37, eff. Jan. 1, 2017.
32 V.S.A. § 5837 Repealed. 2003, No. 152 (Adj. Sess.), § 8.
32 V.S.A. § 5838 Digital business entity election
5838. Digital business entity election
A corporation shall not be subject to the tax imposed by section 5832 of this title if the corporation qualifies as and elects to be taxed as a digital business entity for the taxable year.
Added 2009, No. 1 (Sp. Sess.), § H.54, eff. Jan. 1, 2010.
Source: Vermont General Assembly (legislature.vermont.gov)URL: https://legislature.vermont.gov/statutes/chapter/32/151Fetched: 10/21/2026