State Income Tax
: 3.55% to 8.95% State Sales Tax
: 6% Estate Tax/Inheritance Tax
Vermont doesn't pander to retirees. There are no exemptions for retirement income in the Green Mountain State, except for Railroad Retirement benefits, which are exempt in every state. Social Security benefits and out-of-state pensions are fully taxed. Vermont exempts prescription and nonprescription drugs from its 6% state sales tax, but it imposes a 9% tax on prepared foods and restaurant meals and a 10% tax on alcoholic beverages served in restaurants. The Tax Foundation lists Vermont's property taxes among the ten highest in the nation.
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