BILL AS INTRODUCED H.77
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H.77 1
Introduced by Representatives McCann of Montpelier, Cordes of Lincoln, 2
Dodge of Essex, Goldman of Rockingham, Headrick of 3
Burlington, Logan of Burlington, Pouech of Hinesburg, 4
Priestley of Bradford, Tomlinson of Winooski, and Waszazak 5
of Barre City 6
Referred to Committee on 7
Date: 8
Subject: Taxation; income tax; marginal tax brackets 9
Statement of purpose of bill as introduced: This bill proposes to create a new 10
marginal tax bracket to generate revenue for education and transportation. 11
An act relating to creating a new income tax bracket 12
It is hereby enacted by the General Assembly of the State of Vermont: 13
Sec. 1. 32 V.S.A. § 5822 is amended to read: 14
§ 5822. TAX ON INCOME OF INDIVIDUALS, ESTATES, AND TRUSTS 15
(a) A tax is imposed for each taxable year upon the taxable income earned 16
or received in that year by every individual, estate, and trust, subject to income 17
taxation under the laws of the United States, in an amount determined by the 18
following tables, and adjusted as required under this section: 19 BILL AS INTRODUCED H.77
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(1) Married individuals filing joint returns and surviving spouses: 1
If taxable income is: The tax is: 2
Not over $64,600.00 $79,950.00 3.35% of taxable income 3
Over $64,600.00 $79,950.00 but $2,164.00 $2,678.00 plus 6.6% of the 4
not over $156,150.00 $193,300.00 amount of taxable income over 5
$64,600.00 $79,950.00 6
Over $156,150.00 $193,300.00 but $8,206.00 $10,159.00 plus 7.6% of 7
not over $237,950.00 $294,600.00 the amount of taxable income over 8
$156,150.00 $193,300.00 9
Over $237,950.00 $294,600.00 but $14,423.00 $17,858.00 10
not over $1,217,350.00 plus 8.75% of the amount of taxable 11
income over $237,950.00 12
$294,600.00 13
Over $1,217,350.00 $98,599.00 plus 12.75% of the 14
amount over $1,217,350.00 15
(2) Heads of households: 16
If taxable income is: The tax is: 17
Not over $51,850.00 $64,200.00 3.35% of taxable income 18
Over $51,850.00 $64,200.00 but $1,737.00 $2,151.00 plus 6.6% of the 19
not over $133,850.00 $165,700.00 amount of taxable income over 20
$51,850.00 $64,200.00 21 BILL AS INTRODUCED H.77
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Over $133,850.00 $165,700.00 but $7,149.00 $8,850.00 plus 7.6% of the 1
not over $216,700.00 $268,350.00 amount of taxable income over 2
$133,850.00 $165,700.00 3
Over $216,700.00 $268,300.00 $13,446.00 $16,647.00 plus 8.75% of 4
but not over $1,108,675.00 the amount of taxable income over 5
$216,700.00 $268,300.00 6
Over $1,108,675.00 $90,180.00 plus 12.75% of the 7
amount of taxable income over 8
$1,108,675.00 9
(3) Unmarried individuals (other than surviving spouse or head of 10
household): 11
If taxable income is: The tax is: 12
Not over $38,700.00 $47,900.00 3.35% of taxable income 13
Over $38,700.00 $47,900.00 but $1,296.00 $1,605.00 plus 6.6% of the 14
not over $93,700.00 $116,000.00 6.6% of the amount of taxable 15
income over $38,700.00 $47,900.00 16
Over $93,700.00 $116,000.00 but $4,926.00 $6,099.00 plus 7.6% of the 17
not over $195,450.00 $242,000.00 amount of taxable income over 18
$93,700.00 $116,000.00 19
Over $195,450.00 $242,000.00 but $12,659.00 $15,675.00 plus 8.75% of 20
not over $1,000,000.00 the amount of taxable income over 21 BILL AS INTRODUCED H.77
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$195,450.00 $242,000.00 1
Over $1,000,000.00 $82,000.00 plus 12.75% of the 2
amount of taxable income over 3
$1,000,000.00 4
(4) Married individuals filing separate returns: 5
If taxable income is: The tax is: 6
Not over $32,300.00 $39,975.00 3.35% of taxable income 7
Over $32,300.00 $39,975.00 but $1,082.00 $1,339.00 plus 6.6% of the 8
not over $78,075.00 $96,650.00 amount of taxable income over 9
$32,300.00 $39,975.00 10
Over $78,075.00 $96,650.00 but $4,103.00 $5,080.00 plus 7.6% of the 11
not over $118,975.00 $147,300.00 amount of taxable income over 12
$78,075.00 $96,650.00 13
Over $118,975.00 $147,300.00 but $7,212.00 $8,929.00 plus 8.75% of 14
not over $608,675.00 the amount of taxable income over 15
$118,975.00 $147,300.00 16
Over $608,675.00 $49,299.00 plus 12.75% of the 17
amount of taxable income over 18
$608,675.00 19 BILL AS INTRODUCED H.77
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(5) Estates and trusts: 1
If taxable income is: The tax is: 2
$2,600.00 $3,200.00 or less 3.35% of taxable income 3
Over $2,600.00 $3,200.00 but $87.00 $107.00 plus 6.6% of the 4
not over $6,100.00 $7,500.00 amount of taxable income over 5
$2,600.00 $3,200.00 6
Over $6,100.00 $7,500.00 but $318.00 $391.00 plus 7.6% of the 7
not over $9,350.00 $11,550.00 amount of taxable income over 8
$6,100.00 $7,500.00 9
Over $9,350.00 $11,550.00 $565.00 $699.00 plus 8.75% of the 10
amount of taxable income over 11
$9,350.00 $11,550.00 12
(6) If the federal adjusted gross income of the taxpayer exceeds 13
$150,000.00, then the tax calculated under this subsection shall be the greater 14
of the tax calculated under subdivisions (1)–(5) of this subsection or three 15
percent of the taxpayer’s federal adjusted gross income. 16
(b) As used in this section: 17
(1) “Married individuals,” “surviving spouse,” “head of household,” 18
“unmarried individual,” “estate,” and “trust” have the same meaning as under 19
the Internal Revenue Code. 20 BILL AS INTRODUCED H.77
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(2) The amounts of taxable income shown in the tables in this section 1
shall be adjusted annually for inflation by the Commissioner of Taxes using 2
the Consumer Price Index adjustment percentage, in the manner prescribed for 3
inflation adjustment of federal income tax tables for the taxable year by the 4
Commissioner of Internal Revenue, beginning with taxable year 2003 2025; 5
provided, however, notwithstanding 26 U.S.C. § 1(f)(3), that as used in this 6
subdivision, “consumer price index” means the last Consumer Price Index for 7
All Urban Consumers published by the U.S. Department of Labor. 8
* * * 9
(f) The revenue generated by individual income taxes levied pursuant to 10
this chapter shall be deposited in the General Fund, except as follows: 11
(1) An amount equal to two percent of the taxable income taxed at the 12
highest marginal tax rate under subdivisions (1)–(4) of this section shall be 13
deposited in the Education Fund established under 16 V.S.A. § 4025. 14
(2) An amount equal to one percent of the taxable income taxed at the 15
highest marginal tax rate under subdivisions (1)–(4) of this section shall be 16
deposited in the Transportation Fund established under 19 V.S.A. § 11 for use 17
in the repair and maintenance of roads and bridges and for public 18
transportation. 19
(3) An amount equal to one percent of the taxable income taxed at the 20
highest marginal tax rate under subdivisions (1)–(4) of this section shall be 21 BILL AS INTRODUCED H.77
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deposited in the Vermont Higher Education Endowment Trust Fund 1
established under 16 V.S.A. § 2885. 2
Sec. 3. 32 V.S.A. § 435 is amended to read: 3
§ 435. GENERAL FUND 4
(a) There is established the General Fund, which shall be the basic 5
operating fund of the State. The General Fund shall be used to finance all 6
expenditures for which no special revenues have otherwise been provided by 7
law. 8
(b) The General Fund shall be composed of revenues from the following 9
sources: 10
* * * 11
(5) individual income taxes levied pursuant to chapter 151 of this title, 12
except as otherwise deposited pursuant to subsection 5822(f) of this title; 13
* * * 14
Sec. 4. 16 V.S.A. § 4025 is amended to read: 15
§ 4025. EDUCATION FUND 16
(a) The Education Fund is established to comprise the following: 17
* * * 18
(10) wind-powered electric generating facilities tax deposited pursuant 19
to 32 V.S.A. § 5402c; and 20 BILL AS INTRODUCED H.77
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(11) revenues from the short-term rental surcharge under 32 V.S.A. 1
§ 9301; and 2
(12) income tax revenue deposited pursuant to 32 V.S.A. § 5822(f). 3
* * * 4
Sec. 5. 19 V.S.A. § 11 is amended to read: 5
§ 11. TRANSPORTATION FUND 6
The Transportation Fund shall comprise the following: 7
* * * 8
(8) other miscellaneous sources including the sale of maps, plans, and 9
reports, fees collected by the Travel Information Council, leases for property at 10
State-owned airports and railroads, proceeds from the sale of State surplus 11
property under the provisions of 29 V.S.A. §§ 1556 and 1557, and proceeds 12
from the sale of recycled materials; and 13
(9) income tax revenue deposited pursuant to 32 V.S.A. § 5822(f). 14
Sec. 6. EFFECTIVE DATE 15
Notwithstanding 1 V.S.A. § 214, this act shall take effect retroactively on 16
January 1, 2025 and apply to taxable years on and after January 1, 2025. 17