Ways & Means committee hears briefing on Vermont corporate income tax, Act 148 changes and revenue outlook

Legislative staff and the Joint Fiscal Office briefed the Ways & Means Committee on January 15 on how Vermont defines and taxes corporations, recent law changes under Act 148 of 2022, and what the changes mean for state revenue forecasts.

The briefing, led by an attorney from the Legislative Council identified in the session as Kirby and by Patrick Churchill of the Joint Fiscal Office, covered three groups that can be subject to Vermont corporate income tax: C corporations, entities (such as some LLCs) that elect to be taxed as C corporations, and nonprofit organizations when they have unrelated business income. "If it's subject to income tax as a corporation under federal law, we consider it, subject to taxation," Kirby said, summarizing Vermont's reliance on the federal classification.

Why it matters: Vermont ties its corporate tax base to the federal definition of taxable income and now uses a single sales factor to apportion multistate firms'sales into…