CALCMONEY // CAPITAL GAINS // VT
Vermont adds 8.8% state tax on top of the 23.8% federal rate. On a $1M gain, total tax: $325,500.
Calculate Your Gain8.8%
32.6%
$162,750
$325,500
| Tax Component | Rate | On $500K Gain | On $1M Gain |
|---|---|---|---|
| Federal Long-Term Rate | 20.0% | $100,000 | $200,000 |
| Net Investment Income Tax (NIIT) | 3.8% | $19,000 | $38,000 |
| Vermont State Tax | 8.8% | $43,750 | $87,500 |
| Total Tax Owed | 32.6% | $162,750 | $325,500 |
| Net Proceeds (after tax) | $337,250 | $674,500 |
Federal rate assumes income in the 20% long-term bracket. NIIT applies to investors with MAGI above $200K (single) or $250K (married). State rate shown is the top applicable rate.
| Gain Amount | VT Total Tax | Zero-Tax State | VT Premium |
|---|---|---|---|
| $250,000 | $81,375 | $59,500 | +$21,875 |
| $500,000 | $162,750 | $119,000 | +$43,750 |
| $1,000,000 | $325,500 | $238,000 | +$87,500 |
| $2,500,000 | $813,750 | $595,000 | +$218,750 |
| $5,000,000 | $1,627,500 | $1,190,000 | +$437,500 |
Vermont taxes long-term capital gains at up to 8.8%. Combined with the 20% federal rate and 3.8% NIIT, a high-income VT investor faces 32.6% on a large capital event. On a $1M gain, that is $325,500 in total tax, leaving $674,500 after tax.
Vermont taxes net capital gains at a maximum 8.75% rate, one of the higher rates in New England.
The difference between realizing a gain in Vermont versus a zero-tax state like Texas or Florida is $87,500 per $1M in gains. For a $5M exit, the gap is $437,500. Domicile planning is a key lever for HNW investors ahead of a major liquidity event.
The NIIT adds 3.8% on top of the federal rate for investors with Modified Adjusted Gross Income above $200,000 (single) or $250,000 (married filing jointly). This threshold is not indexed to inflation, so it captures most HNW capital gain transactions regardless of state.
| Alaska | None |
| Florida | None |
| Nevada | None |
| New Hampshire | None |
| South Dakota | None |
| California | 13.3% |
| New Jersey | 10.8% |
| District of Columbia | 10.8% |
| Oregon | 9.9% |
| Minnesota | 9.8% |
Michigan
4.3% state rate
SDSouth Dakota
No state tax
NCNorth Carolina
4.5% state rate
KSKansas
5.7% state rate