Selling a business in Vermont: what the state takes (2026)
Vermont’s top individual income tax rate is 8.75%. Here is what an owner selling company stock pays, with 2026 rules from official sources and worked examples at $10 million, $25 million and $50 million.
- 8.75%
- Top Vermont income tax rate (2026)
- $2,156,875
- State tax on a $25M long-term gain
- 32.4%
- Combined federal and state rate on $25M
- 10 of 51
- Rank by total tax on $25M (1 = highest)
How Vermont taxes a business sale
- Income tax
- Top rate 8.75%: Over $249,700 (single, 2025 schedule).
- Long-term capital gains
- Gain on assets held more than three years (private company stock qualifies; publicly traded securities do not) can be 40% excluded, but the exclusion is capped at the lesser of $350,000 or 40% of federal taxable income. At a $10M+ gain the cap binds, so almost all gain is taxed at 8.75%. Filers with AGI over $150,000 pay the greater of the schedule tax or 3% of AGI, which does not bind here.
- Relief that applies only in some sales
- The 40% exclusion requires a holding period of more than three years; otherwise only a flat $5,000 exclusion is available. From tax year 2026 Vermont adds back gain excluded federally under IRC Sec. 1202 (QSBS), though that gain may count toward the capped exclusion.
- Local taxes
- No local income taxes.
Three worked examples
| Long-term gain | $10,000,000 | $25,000,000 | $50,000,000 |
|---|---|---|---|
| Federal capital gains tax (20%) | $2,000,000 | $5,000,000 | $10,000,000 |
| Net investment income tax (3.8%) | $380,000 | $950,000 | $1,900,000 |
| Vermont tax | $844,375 | $2,156,875 | $4,344,375 |
| Total tax | $3,224,375 | $8,106,875 | $16,244,375 |
| Effective combined rate | 32.24% | 32.43% | 32.49% |
| Net proceeds after tax | $6,775,625 | $16,893,125 | $33,755,625 |
| Extra tax versus Texas | $844,375 | $2,156,875 | $4,344,375 |
Seller’s tax calculator
Estimate federal and state tax on a stock sale and what is left before fees and debt.
- Long-term capital gain
- $25,000,000
- Federal capital gains tax (20%)
- $5,000,000
- Net investment income tax (3.8%)
- $950,000
- Vermont tax
- $2,156,875
- Gain excluded or deducted
- $350,000
- Taxable gain at 8.75%
- $2,156,875
- Total tax
- $8,106,875
- Effective rate on the gain
- 32.43%
- Net proceeds after tax
- $16,893,125
Illustration, not tax advice. Assumes a resident individual, the whole gain long-term, top marginal rates, no state credits, installment terms, QSBS exclusion or other planning, and no local taxes. Net proceeds are before transaction fees, debt repayment, escrows and earn-outs. Rates are for tax year 2026 where published; see the methodology.
Compare with other states
Neighboring states
- Massachusetts32.6% combined, $16.84M net
- New Hampshire23.8% combined, $19.05M net
- New York34.1% combined, $16.48M net
Common comparisons
- California37.1% combined, $15.72M net
- Texas23.8% combined, $19.05M net
- Florida23.8% combined, $19.05M net
- Nevada23.8% combined, $19.05M net
- Washington33.5% combined, $16.63M net
- Tennessee23.8% combined, $19.05M net
Methodology and sources
Vermont figures are for tax year 2026. 2026 rate schedules not yet published; 2025 Vermont schedules used (brackets indexed annually; rates unchanged). Exclusion rules from 32 V.S.A. 5811(21) as in force for 2026 and the 2025 IN-153 instructions. The examples assume a resident individual selling privately held stock for a long-term gain equal to the sale price (zero basis), with every dollar taxed at the top marginal rates, the federal 20% capital gains rate and the 3.8% net investment income tax, and no planning, credits or local taxes. Full assumptions are in the report methodology.
All 50 states and DC with source URLs.
- 1Vermont Department of Taxes, 2025 Rate Schedules
- 2Vermont 2025 Schedule IN-153 Instructions (capital gains exclusion)
- 332 V.S.A. 5811 (taxable income; 2026 versions of (21)(A)(v) and (21)(B)(ii))
- 4Tax Foundation, State Individual Income Tax Rates and Brackets, 2026. Secondary source
Data last updated October 26, 2026.
Cite this research
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Citation
Laurent Capital Research, “The Seller’s Tax Map: What Selling a Business Costs in Every State (2026): Vermont,” 2026, https://laurent.capital/research/seller-tax-map/vermontLink (HTML)
<a href="https://laurent.capital/research/seller-tax-map/vermont">The Seller’s Tax Map: What Selling a Business Costs in Every State (2026): Vermont</a> (Laurent Capital)Planning a sale and weighing the tax cost?
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