📅 2026 Update: Changes in Vermont Tax Laws and New State Tax Measures

Since the original article was written, several changes in tax laws have taken place across the U.S., including new legislation in multiple states. These changes affect how taxes are processed, specifically regarding Pass-Through Entity Taxes (PTET) that have been introduced in various states. The earlier article continues further down the page.

🏛️ New Pass-Through Entity Taxes

Many states, including Iowa, Indiana, and Kentucky, have enacted legislation establishing Pass-Through Entity Taxes similar to Illinois' entity-level tax. This change may impact businesses operating in these states by altering how income is taxed at the entity level instead of the individual level.

  • 📊 Hawaii introduced its PTET on June 1, 2023.
  • 📅 Maine will implement its PTET starting January 1, 2026.

⚖️ Changes in Tax Filing Forms

The IRS has updated several tax forms that taxpayers must be aware of for accurate filing. For example, Form 3911 is used to trace refunds that have not been received, while Form 8716 requests an automatic extension for certain business returns.

  • 📄 Taxpayers must file Form 1065 for partnerships to report income and deductions.
  • 📑 Form 4506 allows taxpayers to request copies of their tax returns.

⏰ Important Deadlines

Understanding deadlines for tax forms is crucial to avoid penalties.

  • ⏳ Form 3911 should be submitted as soon as a refund is determined to be missing.
  • 📅 Form 8716 must be filed by the due date of the return for which the extension is requested.

💰 Current Fees and Costs

As of October 2026, Connecticut's DMV has introduced fees for vehicle title services. Taxpayers should be aware of these costs to avoid surprises during tax season.

📌 Key Takeaways

  • 🏛️ Several states have enacted PTETs similar to Illinois' tax model.
  • 📄 Important IRS forms have been updated for tax filing.
  • ⏰ Deadlines for tax forms are critical to avoid penalties.
  • 💰 New fees have been introduced in Connecticut for DMV services.

💡 Tips for Navigating Vermont Tax Laws

Review the details of your tax situation with an attorney to ensure compliance and accuracy.

📋 Stay Informed on State Tax Resources

Each state has its tax agency that provides resources and assistance. It's important to familiarize yourself with these resources to help with your tax filing.

🗓️ Keep Track of Important Deadlines

Mark important deadlines on your calendar for tax forms, especially for extensions and partnership filings. Missing deadlines can lead to penalties and interest charges.

🔄 Use Free Tax Assistance Programs

Programs like VITA and TCE offer free help to eligible individuals. These programs can assist with tax preparation and filing, ensuring a smoother process.

📄 Request Copies of Past Returns

If you need copies of your past tax returns, use Form 4506. This form is essential for verifying your previous income and deductions.

📊 Utilize IRS Free File

Eligible taxpayers can take advantage of IRS Free File for free tax preparation and filing services. This can be a cost-effective way to handle your taxes.

🏆 Tax Services Ranked by User Reviews (2026)

This section highlights tax preparation services based on user reviews. These services help taxpayers navigate the complexities of tax filings and debt resolution. The following rankings and reviews are based on Trustpilot data from October 2026, and ratings may change over time.

Ratings are just one indicator, as unhappy customers often leave more reviews.

🥇 1. TaxSlayer

TaxSlayer has been rated 4.0. It is known for its online tax preparation software and affordable pricing. However, some users have reported occasional software glitches that can disrupt the filing process.

🥈 2. KBO Tax & Accounting Services

KBO Tax & Accounting Services holds a rating of 4.5. This service is noted for its nationwide tax preparation and bookkeeping services. The main drawback is its limited in-person office locations, which may not be convenient for everyone.

🥉 3. Advanta Tax

Advanta Tax averages a score of 4.3. It is recognized for providing nationwide tax services, including IRS resolution and state tax debt assistance. Some clients have reported delays in service, which could affect timely filing.

4️⃣ SMAART Tax

SMAART Tax has been rated 4.4. It is known for its virtual tax services, accessible in all 50 states. The limitation is that it primarily offers online services, with fewer options for in-person consultations.

5️⃣ Libre Tax Service

Libre Tax Service holds a rating of 4.1. It specializes in online tax preparation and IRS audit defense. However, some users find the website navigation challenging, which could complicate the filing process.

6️⃣ Jackson Hewitt Tax Service

Jackson Hewitt Tax Service has been rated 4.2. It is recognized for its tax preparation services and has numerous nationwide locations. Some complaints regarding customer service responsiveness have been reported.

🆓 Free Tax Assistance Options

Free tax assistance is available through programs like IRS Free File, VITA, and TCE. These services provide support to eligible taxpayers, ensuring they receive the help they need for tax preparation and filing.

🔎 What to Compare When Choosing Tax Services

  • 📈 User ratings and reviews for reliability.
  • 💵 Pricing structure and available discounts.
  • 🕒 Processing times for tax filings and refunds.
  • 📞 Availability of customer support.
  • 📄 Range of services offered, including audits and debt assistance.

❓ Frequently Asked Questions

❓ What is a Pass-Through Entity Tax?

A Pass-Through Entity Tax allows businesses to pay taxes at the entity level instead of having individual owners pay taxes on their income. This can affect how income is reported and taxed.

🕒 How can I track my tax refund?

To track your tax refund, you can use Form 3911 to initiate a trace if your refund has not been received. Processing times for this form may vary.

📅 What forms do I need to file for my partnership?

Partnerships must file Form 1065 with the IRS to report income and deductions. This form is essential for complying with tax regulations.

💰 Are there fees associated with tax services?

Some tax services may charge fees for their assistance. It's important to review their pricing structure and any additional costs for specific services.

📞 Where can I find free tax help?

Free tax help is available through programs like VITA and TCE. These programs assist with tax preparation, especially for those who qualify based on income or age.

📋 How do I request a copy of my tax return?

To request a copy of your tax return, you can file Form 4506. This form allows you to obtain copies of previous tax filings as needed.

⚖️ Recent Court Cases Related to Vermont Tax

Recent court rulings have addressed various tax issues that relate to state and federal tax laws, impacting taxpayers in Vermont and beyond.

Browse more rulings on the news page to stay updated on the latest developments.

End of October 2026 Update






Individual Income Tax Forms



Form IN-111 Income Tax Return



Corporate Income Tax Forms

Vermont Tax


Form BI-471 Business Income Tax Return



Form CO-411 Corporate Income Tax Return



Sales Tax Forms



Form SMWA-1 Application for Refund



Form SU-452 Use Tax Return



Property Tax Forms



Form LG-1 Land Gains Withholding Tax Return



Form LG-2 Land Gains Tax Return (Transferor)



Form RW-171 Withholding Tax Return for Transfer of Real Property



Form Change of Ownership



Form HS-145 Property Tax Adjustment Claim



Form HS-131 Homestead Declaration



Vermont is well known as a progressive state. Vermont taxes are among the highest in the nation. Overall, the Vermont tax burden amounts to about 10.3% of each citizen's income. Vermont is active in providing its underprivileged citizens with Green Mountain Care, the state's health insurance assistance program. Vermonters pay good money for their government services, paying about $4,410 per capita each year. Vermont taxes income, property, sales, use, and selective sales taxes. 



In response to the Great Recession of the present, Vermont has cut their capital gains and estate taxes. This may seem like a departure from the liberal tax policies for which Vermont came to be known but it is part and parcel of creating an economic means to an end. Businesses in Vermont need to grow and cracking down on the wealthy would be counterproductive to growth. The Vermont legislature maintained their liberal integrity by chipping away at small scale taxes to appease the rich in lieu of completely reforming their approach to income tax. 



Income Taxes 



Vermont taxes on income are based on a bracket system. The higher the income, the greater the percentage of earnings withheld. Vermont income taxes top off at 8.95% on people who make $373,650 and more. The lowest income tax percentage is 3.6% on those who make 32,550 and below. 



Everyone who works will have a percentage of wages withheld to pay the Vermont state tax on income. Taxable income includes money won on the stock market or gifted money. Capital gains taxes are money earned as a result of selling an asset at an increased value. Essentially, capital gains taxes are imposed on any type of profit. Corporations and businesses do not like the idea of capital gains taxes because they allege that it constitutes double taxation on the company's earnings. 



Capital gains taxes do not only affect businesses but those who profit off the selling of land. Vermont taxes on corporate income apply a top rate of 8.5% on businesses that make $25,000 and over. Taxable income applies to businesses that are making $25,000 a year in profits. If a company fails to put its budget into the black, it does not have to pay as much corporate income tax. 



Sales Taxes



The Vermont state tax on sales stands at a rate of 6%. Vermont applies its sales tax on digital downloads of movies, books, and music. Sales taxes apply to most goods and services available in the retail sector. On one day out of each calendar year, the Vermont state tax on consumption of goods and services is exempt on the Sales Tax Holiday. 



On the Vermont State sales tax holiday, any item under $2,000 is exempt from taxation. The Vermont state legislature passed the resolution for the sales tax holiday in 2008. The resolution first took effect in 2009, on August 22. The date changes every year. 



Vermont retailers saw a large boost in sales and profits on the tax holiday and it was popular with the people. The only non-exempt goods and services on tax holidays are amusement charges, telecommunications taxes, cable television taxes, and digital downloads of music, movies, and books. 



Vermont taxes on select items include taxes on Cigarettes, Gas, and alcoholic beverages. The Gasoline tax in Vermont is about average at 24 cents per gallon, affecting the overall price at the pump. The State of Vermont has made a strong statement against cigarette smoking with a special sales tax on cigarettes at $2.24 per pack of twenty. Vermont taxes on table wine, spirits, and beer are low with per gallon taxes at $0.55, $0.68, and $0.265 respectively. 



Property Taxes   



Vermont property taxes are comparatively higher than most of its regional neighbors. The Vermont state tax on property ownership averages to about $522.29 per capita. Appraisals are conducted at the local level. County real estate appraisers determine the market value of properties and tax accordingly. Commercial, industrial, and residential zones are taxed the same according to market value. 



The state of Vermont takes a small portion of property taxes while the local governments use most of the revenue from the property tax. Property taxes pay a large portion of public schooling in Vermont as a well as local police and fire departments.  If you need legal advice and assistance, contact Vermont lawyers.