32 V.S.A. § 5822 — Tax on income of individuals, estates, and trusts

(a) A tax is imposed for each taxable year upon the taxable income earned or received
in that year by every individual, estate, and trust, subject to income taxation under
the laws of the United States, in an amount determined by the following tables, and
adjusted as required under this section:
(1) Married individuals filing joint returns and surviving spouses:
If taxable income is:
The tax is:
Not over $64,600.00
3.35% of taxable income
Over $64,600.00 but
$2,164.00 plus 6.6% of
not over $156,150.00
the amount of taxable
income over $64,600.00
Over $156,150.00 but
$8,206.00 plus 7.6%
not over $237,950.00
of the amount of taxable
income over $156,150.00
Over $237,950.00
$14,423.00 plus 8.75%
of the amount of taxable
income over $237,950.00
(2) Heads of households:
If taxable income is:
The tax is:
Not over $51,850.00
3.35% of taxable income
Over $51,850.00 but
$1,737.00 plus 6.6%
not over $133,850.00
of the amount of taxable
income over $51,850.00
Over $133,850.00 but
$7,149.00 plus 7.60%
not over $216,700.00
of the amount of taxable
income over $133,850.00
Over $216,700.00
$13,446.00 plus 8.75%
of the amount of taxable
income over $216,700.00
(3) Unmarried individuals (other than surviving spouse or head of household):
If taxable income is:
The tax is:
Not over $38,700.00
3.35% of taxable income
Over $38,700.00 but
$1,296.00 plus 6.6% of
not over $93,700.00
the amount of taxable
income over $38,700.00
Over $93,700.00 but
$4,926.00 plus 7.6%
not over $195,450.00
of the amount of taxable
income over $93,700.00
Over $195,450.00
$12,659.00 plus 8.75%
of the amount of taxable
income over $195,450.00
(4) Married individuals filing separate returns:
If taxable income is:
The tax is:
Not over $32,300.00
3.35% of taxable income
Over $32,300.00 but
$1,082.00 plus 6.6% of
not over $78,075.00
the amount of taxable
income over $32,300.00
Over $78,075.00 but
$4,103.00 plus 7.6%
not over $118,975.00
of the amount of taxable
income over $78,075.00
Over $118,975.00
$7,212.00 plus 8.75%
of the amount of taxable
income over $118,975.00
(5) Estates and trusts:
If taxable income is:
The tax is:
$2,600.00 or less
3.35% of taxable income
Over $2,600.00 but
$87.00 plus 6.6% of
not over $6,100.00
the amount of taxable
income over $2,600.00
Over $6,100.00 but
$318.00 plus 7.6%
not over $9,350.00
of the amount of taxable
income over $6,100.00
Over $9,350.00
$565.00 plus 8.75%
of the amount of taxable
income over $9,350.00
(6) If the federal adjusted gross income of the taxpayer exceeds $150,000.00, then the
tax calculated under this subsection shall be the greater of the tax calculated under
subdivisions (1)-(5) of this subsection or three percent of the taxpayer’s federal
adjusted gross income.
(b) As used in this section:
(1) “Married individuals,” “surviving spouse,” “head of household,” “unmarried individual,”
“estate,” and “trust” have the same meaning as under the Internal Revenue Code.
(2) The amounts of taxable income shown in the tables in this section shall be adjusted
annually for inflation by the Commissioner of Taxes using the Consumer Price Index
adjustment percentage, in the manner prescribed for inflation adjustment of federal
income tax tables for the taxable year by the Commissioner of Internal Revenue, beginning
with taxable year 2003; provided, however, notwithstanding 26 U.S.C. § 1(f)(3), that as used in this subdivision, “consumer price index” means the last Consumer
Price Index for All Urban Consumers published by the U.S. Department of Labor.
(c) The amount of tax determined under subsection (a) of this section shall be:
(1) increased by 24 percent of the taxpayer’s federal tax liability for the taxable year
for the following:
(A) additional taxes on qualified retirement plans, including individual retirement accounts
and medical savings accounts and other tax-favored accounts;
(B) recapture of the federal investment tax credit attributable to the Vermont portion
of the investment; and
(C) tax on qualified lump-sum distributions of pension income not included in federal
taxable income; and
(2) decreased by 24 percent of the reduction in the taxpayer’s federal tax liability due
to farm income averaging.
(d)(1) A taxpayer shall be entitled to a credit against the tax imposed under this section
of 24 percent of each of the credits allowed against the taxpayer’s federal income
tax for the taxable year as follows: the credit for people who are elderly or permanently
totally disabled and the investment tax credit attributable to the Vermont-property
portion of the investment.
(2) Any unused solar energy investment tax credit under this section may be carried forward
for not more than five years following the first year in which the credit is claimed.
(3) Individuals shall receive a nonrefundable charitable contribution credit against the
tax imposed under this section for the taxable year. The credit shall be five percent
of the first $20,000.00 in charitable contributions made during the taxable year that
are allowable under 26 U.S.C. § 170. This credit shall be available irrespective of a taxpayer’s election not to itemize
at the federal level.
(e) The tax determined under subsections (a) through (d) of this section shall be reduced
by a percentage equal to the portion of adjusted gross income that is not Vermont
income; provided, however, that if a taxpayer’s Vermont income exceeds the taxpayer’s
adjusted gross income, no reduction shall be made and provided, further, that if a
taxpayer has zero or negative Vermont income and the taxpayer’s Vermont income computed
without regard to the reductions in subsection 5823(a) of this chapter does not equal
or exceed the taxpayer’s adjusted gross income, no tax shall be due under this section. (