What is Vermont’s franchise tax?

Vermont does not impose a traditional franchise tax on general business corporations. For most businesses, Vermont's recurring tax obligation is the corporate income tax, which includes a minimum tax based on Vermont gross receipts that applies regardless of profitability—similar to what other states call a franchise tax.

For the vast majority of businesses, Vermont's recurring tax obligation is the corporate income tax under 32 V.S.A. Chapter 151, which includes a minimum tax based on Vermont gross receipts that applies regardless of profitability — similar to what other states call a franchise tax.

Who must file Vermont’s franchise tax?

This tax applies to: 

• C corporations (domestic and foreign) - Must file Form CO-411 and pay at least the minimum tax
• S corporations - File informational Form BI-471; generally not subject to minimum tax
• Partnerships - File informational Form BI-471; generally not subject to minimum tax
• LLCs - Follow federal election (corporations file CO-411, partnerships file BI-471)

The minimum tax table applies specifically to C corporations filing Form CO-411. S corporations and partnerships filing Form BI-471 are generally outside that table unless subject to specific business-income or composite tax obligations.

Vermont franchise tax filing requirements

Every C corporation files a return and pays at least the minimum, even when showing a loss. S corporations and partnerships file informational returns (BI-471) but generally don't pay the minimum tax.

Your entity type determines your form: 

• C corporations use Form CO-411
• S corporations, partnerships, and LLCs taxed as either file Form BI-471. 

Every return needs a complete copy of your federal return since Vermont builds on federal taxable income. Multistate businesses must attach the sales-factor apportionment schedule showing their Vermont income share. Vermont uses single-sales-factor apportionment based solely on sales, not the previous three-factor formula.

File through the myVTax portal for the smoothest experience. It automatically attaches payments, confirms receipt instantly, and eliminates mail delays. 

Due dates and deadlines

Vermont aligns its corporate tax deadlines with federal due dates:

• C corporations file Form CO-411 by the federal corporate return due date (typically April 15 for calendar-year filers)
• S corporations and partnerships file Form BI-471 by the federal partnership/S-corp return due date (typically March 15 for calendar-year filers)

Vermont automatically grants a filing extension when you obtain a federal extension—30 days beyond the federal extended due date for C corporations, or seven months beyond the original due date for business income returns. However, tax payments are still due by the original deadline.

How is Vermont's franchise tax actually calculated?

For tax years beginning January 1, 2023, or later, Vermont uses three graduated brackets:

• First $10,000: 6%
• $10,001–$25,000: 7%
• Above $25,000: 8.5%

C corporations must also pay a minimum tax based on Vermont gross receipts:

Your final tax liability is the greater of: the calculated income tax based on the graduated brackets above, or the minimum tax based on your Vermont gross receipts.

How to file

Vermont gives you three ways to file your corporate return, each starting with the same core forms: 

• CO-411 for C corporations
• BI-471 for S corporations and partnerships 
• BA-403, if you need an extension.

The fastest route is the state's myVTax portal. You can upload returns, attachments, and payments in one session, and the system instantly time-stamps your submission. 

Step-by-step online workflow:

1. Gather your signed federal return, Vermont apportionment schedules, and gross-receipt figures for the minimum tax.
2. Log in to myVTax and choose "Business Income Tax Return."
3. Follow the wizard to enter identification data, income figures, and minimum tax calculations.
4. Upload required PDFs, review the automatic error check, and certify the return.
5. Authorize payment or schedule refunds, then submit.

Prefer hard copies? You can print the same forms and mail them to the Vermont Department of Taxes. The envelope must be postmarked by the original due date: March 15 for S corporations and partnerships, and April 15 for C corporations. The exact mailing address appears on each form's instructions, so check before sealing the packet.

Penalties and compliance

Vermont imposes a 5% penalty if the return is filed within 15 days after the due date, or a 25% penalty if filed later. Late payment triggers an additional $50 per month penalty (capped at $500), plus daily compounding interest from the original due date.

Beyond financial penalties, you risk losing good-standing status with the Secretary of State. Persistent non-compliance can lead to dissolution of your corporation or revocation of your authority to do business in the state.

Exceptions and special cases

Tax-exempt entities including nonprofits with federal exemption and state-created public corporations are exempt from Vermont's corporate income tax. Financial institutions pay a dedicated bank franchise tax instead of standard corporate income tax.

Extensions and amendments

If you only need a Vermont extension, submit Form BA-403 through myVTax or by mail no later than the original due date. To file an amended return, submit a corrected Form CO-411 or BI-471 through myVTax, clearly marked "Amended."

Discern automates your Vermont compliance and beyond

Vermont's corporate income tax—with graduated brackets, minimum tax calculations, and federal-Vermont reconciliation—requires professional tax expertise for accurate filing.

While Discern does not file Vermont corporate income taxes directly, Discern can file your Vermont annual reports with the Secretary of State, provide registered agent services, notify you when tax obligations are due, and help you track compliance across all your entities.

Ready to simplify your multi-state compliance? Book a demo to see how Discern streamlines entity management across all 50 states and DC.