Category: Vermont

Vermont Credits and Incentives

As we’ve mentioned before, our Georgia clients frequently ask us to investigate potential credits and incentives in other states where they have operations, potential acquisitions or strong relationships with customers or vendors. In addition, private equity groups ask us about potential $$ for their portfolio companies.

We were recently asked about credits and incentives in Vermont, and their state economic development professionals gave us some details (Vermont Agency of Commerce and Community Development (ACCD) site click here).

Vermont does not offer much in the way of credits and incentives for new and existing businesses.  CNBC ranked Vermont #42 in their 2015 America’s Top States for Business survey (Georgia was #5 in the same survey).

Incentives and Credits include:

Vermont Employment Growth Incentive (VEGI) — for business recruitment, growth and expansion, VEGI can provide a cash payment, based on the revenue return generated to the State by prospective qualifying job and payroll creation and capital investments, to businesses that have been authorized to earn the incentive and who then meet performance requirements.  Pre-approval required, of course.

Research and Development Tax Credit — Vermont companies that make eligible research and development expenditures in Vermont can claim a tax credit equal to 27 percent of the federal tax credit allowed in the taxable year. Eligible research and development investments are the same as those defined by the federal R&D tax credit under Section 41(a) of the IRS Code which are made in Vermont. If the tax credit cannot be applied in the year earned, the taxpayer can carry forward the credit for up to 10 years.

Percentage of Federal Investment Tax Credit — Provides tax credits for energy, qualifying advanced coal, qualifying gasification, and qualifying advanced energy projects.  Credit is 24% of investment tax credit attributable to the Vermont-property portion of the investment.

Compared to Georgia, Vermont has:

  • Higher corporate and personal income tax rates.
  • A far narrower range of incentives.
  • Pre-approval required for growth incentives

To summarize, Vermont is below average for business tax incentives, but who cares?  It’s a beautiful state.

Do any of your clients have Vermont connections?  If so, you will need to start collecting information and planning early, and good luck!