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Presenter tells Ways & Means recent U.S. Supreme Court rulings limit Vermont’s ability to tax long‑standing "resident" trusts
Summary
At a Ways & Means briefing, Mark Langan told lawmakers Vermont can tax trust income only when the trust retains sufficient "nexus" to the state — a rule courts reinforced in recent U.S. Supreme Court guidance — and urged care before asserting long-term claims on out-of-state trusts.
At a Ways & Means committee briefing, Mark Langan, section chair of the Vermont Bar Association’s probate and trust section, told legislators that Vermont’s authority to tax trusts depends on a sufficient connection, or nexus, between the trust and the state.
"You have to have nexus to be able to tax that," Langan said, quoting recent judicial holdings and explaining how courts are narrowing states’ reach when beneficiaries, trustees and assets are largely out of state.
Why it matters: Vermont’s resident‑trust rule can subject trust income to state tax when a contributor was a Vermonter at the time a trust becomes irrevocable, Langan said. That rule is…
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