Vermont Tax Burden

Yes — Vermont ranks #5 nationally for total tax burden at 12.78%, placing it among the 10 highest-taxed states in America. The state income tax rate of 4.483% is among the higher rates nationally, significantly impacting residents' take-home pay.

Property taxes are a major factor here — at 1.80% effective rate, homeowners in Vermont pay significantly more than the national median of ~1.1%. On a $300,000 home, that's approximately $540,000/year in property taxes alone. With a median household income of $69,689, the average Vermont resident pays approximately $8,906 per year across all state and local taxes.

High income tax state: At 4.483%, Vermont's income tax takes a significant bite. Consider maximizing pre-tax retirement contributions (401k, IRA, HSA) to reduce your state tax bill. If you're nearing retirement, evaluate whether relocating to a no-income-tax state could save you significantly on withdrawals.

Property tax protest: With an effective rate of 1.80%, property tax appeals are worth pursuing in Vermont. Homeowners who formally protest their assessed value often achieve reductions of 5–15%. On a $300,000 home, that's a potential savings of $54,000/year. Check your county assessor's deadline — most states allow annual appeals.

High sales tax (6.36%): For major purchases — vehicles, appliances, furniture — calculate whether buying across state lines (if near a border) saves meaningful money. A $30,000 car purchase costs an extra $190,800 in sales tax in Vermont.

For retirees: At 4.483% income tax, all retirement withdrawals are potentially taxable. Check whether Vermont offers any exemptions for Social Security or pension income — many states do.