Do you have business operations in Vermont? The state has recently made some significant changes in how corporations will be calculating and filing their taxes. These changes will be effective for the tax year beginning on or after January 1, 2023.
Changes to the Corporate Minimum Tax — Under previous Vermont tax law, a corporation with no (or negative) taxable income was subject to a three-tiered minimum tax based on gross receipts.
This change brings Vermont in line with most other New England states. The only remaining New England state using a three-factor apportionment formula is Massachusetts — although single-factor apportionment is allowed in Massachusetts for certain types of businesses.
Repeal of Throwback Rule — Under previous Vermont tax law, if a corporation sold into a state where it had no nexus, the corporation had to count those sales as Vermont sales to determine their sales apportionment factor. The new legislation repeals that rule.
If you have questions about how these changes will impact your future corporate tax filings — or any concerns about your corporate taxes — don’t hesitate to contact Mason + Rich for assistance.