The Vermont Statutes Online

Title 32: Taxation and Finance

Chapter 190: Estate and Gift Taxes

• Subchapter 001: PURPOSE; DEFINITIONS

• § 7401. Purpose

  (a) This chapter is intended to conform the Vermont estate tax laws with the estate and gift tax provisions of the U.S. Internal Revenue Code, except as otherwise expressly provided, in order to simplify the taxpayer’s filing of returns, reduce the taxpayer’s accounting burdens, and facilitate the collection and administration of these taxes. Because federal estate and gift tax law does not recognize a civil union in the same manner as Vermont law, and because a reduction in the Vermont estate tax liability for parties to a civil union based upon the federal marital deduction would not reduce the total estate tax liability, estates of parties to a civil union shall be subject to tax based on their actual federal estate tax liability and, notwithstanding the provisions of section 7442a of this title, the actual federal credit for state death taxes as provided under the Economic Growth and Tax Relief Reconciliation Act of 2001. Beginning with estates of decedents with a date of death on or after January 1, 2005, this chapter shall apply to parties to a civil union and surviving parties to a civil union as if federal estate tax law recognized a civil union in the same manner as Vermont law.

  (b) It is intended that taxpayers shall be taxed only upon the Vermont taxable estate or upon Vermont taxable gifts for any calendar year, but that the rate at which the Vermont taxable estate or Vermont taxable gifts are taxed under this chapter shall reflect the taxpayer’s ability to pay as measured by the value of his or her federal taxable estate or federal taxable gifts for the taxable year. (Added 1969, No. 269 (Adj. Sess.), § 1, eff. date, see note below; amended 1999, No. 91 (Adj. Sess.), § 22; 2001, No. 140 (Adj. Sess.), § 17, eff. June 21, 2002.)

• § 7402. Definitions

  As used in this chapter unless the context requires otherwise:

  (1) “Commissioner” means the Commissioner of Taxes appointed under 3 V.S.A. § 2251.

  (2) “Executor” means the executor or administrator of the estate of the decedent or, if there is no executor or administrator appointed, qualified, and acting within Vermont, then any person in actual or constructive possession of any property of the decedent.

  (3) “Federal estate tax liability” means for any decedent’s estate the federal estate tax payable by the estate under the laws of the United States after the allowance of all credits against the estate tax provided by the laws of the United States.

  (4) [Repealed.]

  (5) “Federal gross estate” means the gross estate as determined under the laws of the United States.

  (6) “Federal taxable estate” means the taxable estate as determined under the laws of the United States.

  (7) “Federal taxable gifts” means taxable gifts as determined under the laws of the United States.

  [Subdivision (8) shall apply to taxable years on and after January 1, 2023.]

  (8) “Laws of the United States” means the U.S. Internal Revenue Code of 1986, as amended through December 31, 2023. As used in this chapter, “Internal Revenue Code” has the same meaning as “laws of the United States” as defined in this subdivision. The date through which amendments to the U.S. Internal Revenue Code of 1986 are adopted under this subdivision shall continue in effect until amended, repealed, or replaced by act of the General Assembly.

  (9) “Nonresident of Vermont” means a person whose domicile is not Vermont.

  (10) “Resident of Vermont” means a person whose domicile is Vermont.

  (11) “Taxpayer” means the executor of an estate, the estate itself, the donor of a gift, or any person or entity or combination of these who is liable for the payment of any tax, interest, penalty, fee, or other amount under this chapter.

  (12) [Repealed.]

  (13) “Vermont gross estate” means for any decedent the value of the federal gross estate as provided under 26 U.S.C. § 2031, excluding the value of property that has its situs outside Vermont.

  (14) “Vermont taxable estate” means the federal taxable estate as provided under 26 U.S.C. § 2051, without regard to whether the estate is subject to the federal estate tax:

  (A) Increased by the amount of the deduction for state death taxes allowed under 26 U.S.C. § 2058, to the extent deducted in computing the federal taxable estate.

  (B) Increased by the amount of the deduction for foreign death taxes allowed under 26 U.S.C. § 2053(d), to the extent deducted in computing the federal taxable estate.

  (C) Increased by the aggregate amount of taxable gifts as defined in 26 U.S.C. § 2503, made by the decedent within two years of the date of death. For purposes of this subdivision (14), the amount of the addition equals the value of the gift under 26 U.S.C. § 2512 and excludes any value of the gift included in the federal gross estate.

  (15) “Situs of property” means, with respect to:

  (A) real property, the state or country in which it is located;

  (B) tangible personal property, the state or country in which it was normally kept or located at the time of the decedent’s death or for a gift of tangible personal property within two years of death, the state or country in which it was normally kept or located when the gift was executed;

  (C) a qualified work of art, as defined in 26 U.S.C. § 2503(g)(2), owned by a nonresident decedent and that is normally kept or located in this State because it is on loan to an organization, qualifying as exempt from taxation under 26 U.S.C. § 501(c)(3), that is located in Vermont, the situs of the art is deemed to be outside Vermont; and

  (D) intangible personal property, the state or country in which the decedent was domiciled at death or for a gift of intangible personal property within two years of death, the state or country in which the decedent was domiciled when the gift was executed. (Added 1969, No. 269 (Adj. Sess.), § 1, eff. date, see note under § 7401 of this title; amended 2001, No. 140 (Adj. Sess.), § 13, eff. June 21, 2002; 2015, No. 146 (Adj. Sess.), § 1, eff. Jan. 1, 2016; 2017, No. 113 (Adj. Sess.), § 188; 2019, No. 51, § 6, eff. Jan. 1, 2019; 2019, No. 175 (Adj. Sess.), § 14, eff. Jan. 1, 2020; 2021, No. 9, § 23a, eff. Jan. 1, 2021; 2021, No. 73, § 24, eff. Jan. 1, 2021; 2021, No. 105 (Adj. Sess.), § 557, eff. July 1, 2022; 2021, No. 148 (Adj. Sess.), § 8, eff. January 1, 2022; 2023, No. 72, § 2, eff. January 1, 2023; 2023, No. 144 (Adj. Sess.), § 4, eff. January 1, 2024.)

• § 7403. Repealed. 1987, No. 278 (Adj. Sess.), § 4, eff. June 21, 1988.

• Subchapter 002: GIFT TAX

• §§ 7411-7418. Repealed. 1979, No. 140 (Adj. Sess.), § 2, eff. date, see note below.

• Subchapter 003: ESTATE TAX

• § 7441. Name of tax

  The tax imposed by this subchapter shall be known as the Vermont estate tax. (Added 1969, No. 269 (Adj. Sess.), § 1, eff. date, see note under § 7401 of this title.)

• § 7442. Repealed. 1979, No. 140 (Adj. Sess.), § 3, eff. date, see note below.

• § 7442a. Imposition of a Vermont estate tax and rate of tax

  (a) A tax is hereby imposed on the transfer of the estates of decedents as prescribed by this chapter.

  (b) The tax shall be computed as follows. The following rates shall be applied to the Vermont taxable estate:

  Amount of Vermont Taxable Estate Rate of Tax

  Under $5,000,000.00 None

  $5,000,000.00 or more 16 percent of the

  excess over

  $5,000,000.00

  The resulting amount shall be multiplied by a fraction not greater than one, where the numerator of which is the value of the Vermont gross estate plus the value of gifts under subdivision 7402(14)(C) of this title with a Vermont situs, and the denominator of which is the federal gross estate plus the value of gifts under subdivision 7402(14)(C) of this title.

  (c) All values shall be as finally determined for federal estate tax purposes.

  (d) [Repealed.] (Added 1979, No. 140 (Adj. Sess.), § 1; amended 1995, No. 29, § 11, eff. April 14, 1995; 2001, No. 140 (Adj. Sess.), § 12, eff. June 21, 2002; 2009, No. 1 (Sp. Sess.), § H.31; 2009, No. 160 (Adj. Sess.), § 33a; 2015, No. 146 (Adj. Sess.), § 2, eff. Jan. 1, 2016; 2017, No. 73, § 8, eff. Jan. 1, 2016; 2017, No. 113 (Adj. Sess.), § 189; 2019, No. 71, § 5, eff. Jan. 1, 2020; 2019, No. 71, § 6, eff. Jan. 1, 2021.)

• § 7443. Estate tax reduction for estate of a farmer

  The amount of tax determined under section 7442a of this chapter on an estate that qualifies for installment payment of estate taxes under 26 U.S.C. § 6166, and in which the closely held business is the business of farming in Vermont, shall be reduced by the percentage that the value of the closely held farm business, as determined for federal estate tax purposes, bears to the value of the federal adjusted gross estate. (Added 2001, No. 140 (Adj. Sess.), § 21, eff. June 21, 2002; amended 2003, No. 70 (Adj. Sess.), § 51, eff. March 1, 2004.)

• § 7444. Return by executor

  (a) An executor shall submit a Vermont estate tax return to the Commissioner, on a form prescribed by the Commissioner, when a decedent has an interest in property with a situs in Vermont and one or both of the following apply:

  (1) a federal estate tax return is required to be filed under 26 U.S.C. § 6018; or

  (2) the sum of the federal gross estate and federal adjusted taxable gifts, as defined in 26 U.S.C. § 2001(b), made within two years of the date of the decedent’s death exceeds $2,750,000.00.

  (b) If the executor is unable to make a complete return as to any part of the gross estate of the decedent, the executor shall include in the executor’s return, to the extent of the executor’s knowledge or information, a description of such part and the name of every person holding a legal or beneficial interest therein. Upon notice from the Commissioner, such person shall in like manner make a return as to such part of the gross estate. A return made by one of two or more joint fiduciaries shall be sufficient compliance with the requirements of this section. A return made pursuant to this section shall contain a statement that the return is, to the best of the knowledge and belief of the fiduciary, true and correct. (Added 1969, No. 269 (Adj. Sess.), § 1, eff. date, see note under § 7401 of this title; amended 2003, No. 70 (Adj. Sess.), § 52, eff. March 1, 2004; 2009, No. 1 (Sp. Sess.), § H.32; 2015, No. 146 (Adj. Sess.), § 3, eff. Jan. 1, 2016; 2021, No. 105 (Adj. Sess.), § 558, eff. July 1, 2022.)

• § 7445. Copies of federal estate tax returns to be filed

  It shall be the duty of the executor of every person who may die a resident of Vermont or a nonresident with real estate or tangible personal property having an actual situs in Vermont to file with the Commissioner a duplicate of all federal estate tax returns that he or she is required to make to the federal authorities or, if no federal estate tax return is required, a pro forma federal estate tax return for the estate of a decedent with a Vermont estate tax liability shall be filed with the Commissioner. (Added 1969, No. 269 (Adj. Sess.), § 1, eff. date, see note under § 7401 of this title; amended 2009, No. 1 (Sp. Sess.), § H.33.)

• § 7446. When returns to be filed

  The estate tax return required under section 7444 of this title shall be filed within nine months of the death of the decedent. Prior to expiration of the filing period, executors may apply for a six-month extension. (Added 1969, No. 269 (Adj. Sess.), § 1, eff. date, see note under § 7401 of this title; amended 2009, No. 1 (Sp. Sess.), § H.34.)

• § 7447. When tax payable

  The tax imposed by this subchapter shall be due and payable by the executor at the time the Vermont estate tax return is required to be filed under section 7446 of this title, without extension. (Added 1969, No. 269 (Adj. Sess.), § 1, eff. date, see note under § 7401 of this title; amended 1995, No. 29, § 12, eff. April 14, 1995; 2003, No. 70 (Adj. Sess.), § 53, eff. March 1, 2004.)

• § 7448. Extension of time for payment

  (a) If the Commissioner finds that the payment on the due date of any part of the amount determined by the executor as the tax imposed by this subchapter would result in undue hardship to the estate, he or she may extend the time for payment for a reasonable period not in excess of five years from the date prescribed by section 7447 of this title.

  (b) For good cause shown, the Commissioner may extend the time for the payment of any tax liability, but the taxpayer shall pay, at the time the tax liability is paid, without assessment or demand, interest computed at the rate per annum established from time to time by the Commissioner pursuant to section 3108 of this title on the unpaid amount of that tax liability from the time when the liability was originally due to the time of payment. However, no interest shall be required in the case of an extension granted in case of hardship under subsection (a) of this section. (Added 1969, No. 269 (Adj. Sess.), § 1, eff. date, see note under § 7401 of this title; amended 1979, No. 105 (Adj. Sess.), § 16; 1981, No. 191 (Adj. Sess.), § 7.)

• § 7449. Probate Division to send Commissioner notice of estate

  The Probate Division shall send to the Commissioner by mail at the time of granting letters of administration in any estate and upon forms to be furnished by the Commissioner the name of the decedent, the date of his or her death, and the name and address of the administrator or executor. (Added 1969, No. 269 (Adj. Sess.), § 1, eff. date, see note under § 7401 of this title; amended 2017, No. 28, § 7, eff. May 10, 2017.)

• § 7450. Powers and duties of executor or administrator appointed for nonresident

  When real or personal estate within Vermont or any interest therein belonging to a person who is not a resident of Vermont shall pass by will or otherwise so that it may be subject to tax under the provisions of this subchapter and an executor or administrator of the estate of the decedent is appointed by a Probate Division of the Superior Court of Vermont upon ancillary proceedings or otherwise, such executor or administrator shall, for the purpose of this subchapter, have the same powers and be subject to the same duties and liabilities with reference to such estate as though the decedent had been a resident of Vermont. (Added 1969, No. 269 (Adj. Sess.), § 1, eff. date, see note under § 7401 of this title; amended 2009, No. 154 (Adj. Sess.), § 238a, eff. Feb. 1, 2011.)

• § 7451. Appointment of resident administrator for nonresident’s estate

  In the absence of administration in Vermont upon the estate of a nonresident, the Commissioner may, at the request of an executor or administrator duly appointed and qualified in the state of the decedent’s domicile or at the request of a donee, devisee, legatee, distributee, or grantee under a conveyance or transfer made during the grantor’s lifetime, and upon satisfactory evidence furnished him or her by such executor, administrator, donee, devisee, legatee, distributee or grantee, or otherwise, determine whether or not any part of the estate of such decedent within Vermont is subject to tax under the provisions of this subchapter and may apply to the proper Probate Division of the Superior Court for the appointment of an administrator in Vermont. (Added 1969, No. 269 (Adj. Sess.), § 1, eff. date, see note under § 7401 of this title; amended 2009, No. 154 (Adj. Sess.), § 238a, eff. Feb. 1, 2011.)

• § 7452. Personal liability of recipient of property; effect of transfer of property to bona fide purchaser, etc

  If the estate taxes imposed by this subchapter are not paid when due, then the spouse, transferee, trustee, surviving tenant, person in possession of the property by reason of the exercise, nonexercise, or release of a power of appointment, or beneficiary, who receives, or has on the date of the decedent’s death property included in the federal gross estate to the extent of the value, at the time of the decedent’s death, of such property, shall be personally liable for such tax. Any part of such property transferred by, or transferred by a transferee of, such spouse, transferee, trustee, surviving tenant, person in possession of property by reason of the exercise, nonexercise, or release of a power of appointment, or beneficiary, to a bona fide purchaser, mortgagee, or pledgee for an adequate and full consideration in money or money’s worth shall be divested of the lien provided by law and a like lien shall then attach to all the property of such spouse, transferee, trustee, surviving tenant, person in possession, beneficiary, or transferee of any such person, except any part transferred to a bona fide purchaser, mortgagee, or pledgee for an adequate and full consideration in money or money’s worth. (Added 1969, No. 269 (Adj. Sess.), § 1, eff. date, see note under § 7401 of this title.)

• § 7453. Reimbursement of person other than executor paying tax

  (a) If the tax or any part thereof imposed by this subchapter is paid by, or collected out of, that part of the estate passing to, or in possession of, any person other than the executor in his or her capacity as such, such person shall be entitled to reimbursement out of any part of the estate still undistributed or by a just and equitable contribution by the persons whose interest in the estate of the decedent would have been reduced if the tax had been paid before the distribution of the estate or whose interest is subject to equal or prior liability for the payment of taxes, debts, or other charges against the estate, it being the purpose and intent of this subchapter that, so far as is practicable and unless otherwise directed by the will of the decedent, the tax shall be paid out of the estate before its distribution.

  (b) Any person entitled to reimbursement or contribution under this section may enforce his or her right thereto by action brought in the courts of this State. (Added 1969, No. 269 (Adj. Sess.), § 1, eff. date, see note under § 7401 of this title.)

• § 7454. Discharge of executor; income tax clearance; notice of proceedings in court

  (a) Upon the final settlement of the account of an administrator, executor, or trustee, the Probate Division of the Superior Court shall make the amount of estate taxes imposed by this chapter a part of the final decree of distribution, a copy of which decree shall be sent forthwith to the Commissioner by the judge of probate. An administrator, executor, or trustee shall not be finally discharged or relieved from his or her bond until he or she has paid such taxes as he or she is required to pay to the Commissioner and has filed with the Probate Division of the Superior Court a receipt issued by the Commissioner for the receipt of such taxes.

  (b) A final account of an administrator, executor, or trustee shall not be allowed unless such account shows and the judge of probate finds that all income taxes imposed by chapter 151 of this title, which have become payable, have been paid. The certificate of the Commissioner and the receipt for the amount of tax therein certified shall be conclusive as to the payment of the tax, to the extent of such certificate. On behalf of the State, for the purpose of facilitating the settlement and distribution of estates, the Commissioner may agree upon the amount of income taxes at any time due from such administrator, executor, or trustee under the provisions of chapter 151 of this title, and payment in accordance with such agreement shall be full satisfaction of the taxes to which the agreement relates. (Added 1969, No. 269 (Adj. Sess.), § 1, eff. date, see note under § 7401 of this title; 2009, No. 154 (Adj. Sess.), § 238a, eff. Feb. 1, 2011.)

• §§ 7455-7459. [Reserved for future use]

• § 7460. Generation-skipping transfers

  (a) As used in this section, unless the context indicates otherwise:

  (1) “Generation-skipping transfer” means every transfer subject to the federal generation-skipping transfer tax in which the original transferor is a resident of the State at the date of original transfer or the property transferred is real or personal property in the State.

  (2) “Original transferor” means any grantor, donor, settlor, or testator who by grant, gift, trust, or will makes a transfer of real or personal property that results in federal generation-skipping transfer tax.

  (b) A tax is hereby imposed upon every generation-skipping transfer in which the original transferor is a resident of the State at the date of original transfer, in an amount equal to the amount allowable as a credit for State death taxes under 26 U.S.C. § 2604, as in effect on January 1, 2001.

  (c) A tax is hereby imposed upon every generation-skipping transfer in which the original transferor is not a resident of the State at the date of the original transfer, in an amount equal to the amount allowable as a credit, with regard to the real or tangible personal property in Vermont, for State death taxes under 26 U.S.C. § 2604, as in effect on January 1, 2001.

  (d) Every person required to file a return reporting a generation-skipping transfer under applicable federal law and regulations shall file with the Commissioner, on or before the last day prescribed for filing the federal return, a return in such form as the Commissioner may prescribe, including a duplicate copy of the federal return.

  (e) The person liable for payment of the federal generation-skipping transfer tax shall be liable for the tax imposed by this section, which tax is due upon a taxable distribution or taxable termination as determined under the applicable provisions of the federal generation-skipping transfer tax and shall be paid to the Commissioner.

  (f) Any person failing to file any payment of tax required by this section when due shall be subject to the interest and penalty provision of section 3202 of this title.

  (g) If, after a duplicate copy of the federal return of a generation-skipping transfer has been filed with the Commissioner, the amount of the federal generation-skipping transfer tax is increased or decreased by the federal government, an amended return shall be filed with the Commissioner showing all changes made in the original return and the amount of increase or decrease in the federal generation-skipping transfer tax and in the State death tax credit relating thereto. (Added 1999, No. 49, § 57, eff. June 2, 1999; amended 2001, No. 140 (Adj. Sess.), § 16, eff. June 21, 2002; 2021, No. 105 (Adj. Sess.), § 559, eff. July 1, 2022.)

• Subchapter 004: GENERAL PROVISIONS

• § 7470. Administration of chapter

  The Commissioner shall administer and enforce this chapter. (Added 1969, No. 269 (Adj. Sess.), § 1, eff. date, see note under § 7401 of this title.)

• § 7471. Regulations

  The Commissioner may adopt, prescribe, and from time to time alter and amend and enforce reasonable rules, orders, and regulations for the purpose of implementing this title. (Added 1969, No. 269 (Adj. See.), § 1, eff. date, see note under § 7401 of this title.)

• § 7472. Abatement of tax liabilities

  The Commissioner may, upon making a record of his or her reasons therefor, waive, reduce, or compromise any of the taxes, penalties, or interest or other amounts provided in this chapter. (Added 1969, No. 269 (Adj. Sess.), § 1, eff. date, see note under § 7401 of this title.)

• § 7473. Allocation of payments

  (a) Any payment received by the Commissioner from any taxpayer with respect to a tax liability of the taxpayer may be applied to any tax liability in the following order of priority, notwithstanding any direction by the taxpayer to the contrary:

  (1) first, against any portion of any tax liability initially incurred with respect to a preceding taxable year, with the portion incurred with respect to the earliest preceding taxable year to be satisfied before any portion incurred with respect to any succeeding taxable year; and

  (2) next, against any portion of any tax liability incurred with respect to the current taxable year.

  (b) As to each portion, the payment shall be applied as follows:

  (1) first, to the amount of any interest;

  (2) next, to the amount of any penalty;

  (3) next, to the amount of any fee; and

  (4) next, to the amount of any unpaid tax, incurred with respect to the taxable year. (Added 1969, No. 269 (Adj. Sess.), § 1, eff. date, see note under § 7401 of this title; amended 2021, No. 105 (Adj. Sess.), § 560, eff. July 1, 2022.)

• § 7474. Inconsistent provisions

  Notwithstanding any provisions of the statutes of this State to the contrary, no person or other taxpayer, and no item of gift or of an estate, shall be exempt from taxation under this chapter unless the person or other taxpayer or item of gift or of an estate, as the case may be, is expressly exempted from taxation by this chapter. (Added 1969, No. 269 (Adj. Sess.), § 1, eff. date, see note under § 7401 of this title.)

• § 7475. Repealed. 2015, No. 146 (Adj. Sess.), § 4, eff. January 1, 2016.

• § 7476. Additional returns

  When the Commissioner is of the opinion that a taxpayer has failed to file any return required by this chapter or to include in any return so filed, either intentionally or through error, information by which the taxpayer’s tax liability may correctly be determined, the Commissioner may, by written notice to the taxpayer, require that the taxpayer file that return or an additional supplementary return containing such information, verified as provided in section 7480 of this title, in such form as the Commissioner shall prescribe. The filing of that return shall not relieve the taxpayer from any of the penalties to which he or she may be liable under this chapter. (Added 1969, No. 269 (Adj. Sess.), § 1, eff. date, see note under § 7401 of this title.)

• § 7477. Failure to file a return; petition and computation of tax

  (a) Upon the failure of a taxpayer to file any return required under this chapter within 15 days of the date of a notice to the taxpayer under section 7476 of this title, the Commissioner may petition a judge of the Superior Court in the county wherein the taxpayer resides or has a place of business or, if the taxpayer neither resides nor has a place of business in this State, the Commissioner may petition the Washington Superior Court, and upon the petition of the Commissioner and a hearing, the judge shall issue a citation requiring the taxpayer and, if the taxpayer is a corporation, any principal officer of such corporation, to file a proper return in accordance with this chapter, upon pain of contempt. The order of notice upon the petition shall be returnable not later than 20 days after the filing of the petition. The petition shall be heard and determined on the return day or on such day thereafter as the court shall fix, having regard to the speediest possible determination of the case consistent with the rights of the parties. The judgment shall include costs in favor of the prevailing party.

  (b) Upon the failure of a taxpayer to file any return required under this chapter within 15 days after the date of a notice to the taxpayer under section 7476 of this title, whether or not a petition has been or will be filed under subsection (a) of this section, the Commissioner may compute the tax liability of the taxpayer with respect to which the return was required to be filed, according to the Commissioner’s best information and belief. Upon that computation, the Commissioner shall notify the taxpayer of his or her deficiency with respect to the payment of that tax liability, and may assess any penalty or interest with respect thereto, under sections 3202 and 3203 of this title. (Added 1969, No. 269 (Adj. Sess.), § 1, eff. date, see note under § 7401 of this title; amended 1973, No. 193 (Adj. Sess.), § 3, eff. April 9, 1974; 2019, No. 14, § 82, eff. April 30, 2019.)

• § 7478. Examination of records and witnesses

  The Commissioner, for the purpose of ascertaining the correctness of any return or for the purpose of making a determination of the tax liability of any taxpayer, may examine or cause to be examined by any agent or representative designated by him or her for that purpose, any books, papers, records, or memoranda of the taxpayer bearing upon the matters required to be included in any return. The Commissioner or such officers as he or she may designate may require the attendance of the taxpayer or of any other person having knowledge in the premises, at any place in the county where the taxpayer or person resides or has a place of business, or in Washington County if the taxpayer is a nonresident individual, estate, or trust or is a corporation not having a place of business in this State, and may take testimony and require proof material for his or her information, and may administer oaths or take acknowledgment in respect of any return or other information required by this title or the rules, regulations, and decisions of the Commissioner. (Added 1969, No. 269 (Adj. Sess.), § 1, eff. date, see note under § 7401 of this title.)

• § 7479. Supplemental information; changes in federal tax liability or in taxable gifts or estate

  (a) If, after the time for filing any return required by this chapter, a taxpayer:

  (1) becomes aware of any information that makes that return materially false, inaccurate, or incomplete; or

  (2) is notified of any assertion by the United States, whether under section 6212 of the Internal Revenue Code of 1986 or otherwise, that his or her taxable gifts or taxable estate, or any tax liability under the laws of the United States, is other than the amount stated in the return; or

  (3) files an amended return under the laws of the United States, the taxpayer shall, within 30 days of the receipt of that information or notification of that assertion or filing that amended return, notify the Commissioner thereof, and of such particulars as may be relevant to the amount of any tax liability of the taxpayer under this chapter.

  (b) Any notice required to be given to the Commissioner under this section shall be considered to be a return for purposes of this chapter, and a taxpayer required to file any such return shall be subject, with respect thereto, to the provisions of this chapter, including the provisions governing fees for failure to file a return, except as those provisions conflict with the express provisions of this section. (Added 1969, No. 269 (Adj. Sess.), § 1, eff. date, see note under § 7401 of this title.)

• § 7480. Form and verification of returns

  The returns required to be filed under this chapter shall be in such form and manner as the Commissioner prescribes in order to ensure payment of the taxes imposed by this chapter and shall be filed at the main office of the Department of Taxes. Those returns shall be verified by written declarations that the statements therein are made subject to the pains and penalties of perjury. When a return is made by a corporation, the person signing it shall be considered to be the person who is subject to the pains and penalties of perjury. The Commissioner shall cause to be prepared blank forms for the returns and shall cause them to be distributed throughout the State and to be furnished upon application, but failure to secure or receive such a form shall not relieve a taxpayer from the obligation of filing any return herein required. (Added 1969, No. 269 (Adj. Sess.), § 1, eff. date, see note under § 7401 of this title.)

• § 7481. Extension of time for filing of returns

  For good cause shown, the Commissioner may extend the time within which a taxpayer is required to file a return. An extension of the time in which to file a return will result in a corresponding extension of the time for the payment of the tax liability with respect to which the return is filed, provided that the taxpayer shall pay, at the date that tax liability is paid, without assessment or demand, interest computed at the rate per annum established from time to time by the Commissioner pursuant to section 3108 of this title on the unpaid amount of that tax liability from the time when the tax liability was originally required to be paid to the time of payment. (Added 1969, No. 269 (Adj. Sess.), § 1, eff. date, see note under § 7401 of this title; amended 1979, No. 105 (Adj. Sess.), § 17; 1981, No. 191 (Adj. Sess.), § 7.)

• § 7482. Repealed. 1997, No. 156 (Adj. Sess.), § 37, eff. January 1, 1999.

• § 7483. Method of payment

  All tax liabilities imposed by this chapter may be paid pursuant to section 3110 of this title. A tax liability may be paid with uncertified check, but if an uncertified check is not honored by the bank on which it is drawn, the taxpayer shall remain liable for the payment of the tax and for all lawful penalties and interest in the same manner as if the check had not been tendered. (Added 1969, No. 269 (Adj. Sess.), § 1, eff. date, see note under § 7401 of this title; amended 2021, No. 73, § 6.)

• §§ 7484, 7485. Repealed. 1997, No. 156 (Adj. Sess.), § 37, eff. January 1, 1999.

• § 7486. Time limitation on notices of deficiency and assessment of penalty and interest

  (a) The Commissioner may notify a taxpayer of a deficiency with respect to the payment of any tax liability, or assess a penalty or interest with respect thereto, in accordance with sections 3202 and 3203 of this title, at any time within three years after the date that tax liability was originally required to be paid under this chapter.

  (b) Notwithstanding subsection (a) of this section:

  (1) if the taxpayer fails to file a proper return with respect to any tax liability at the time prescribed for its filing, the notification or assessment may be made at any time before the end of three years after the taxpayer files such a return;

  (2) if the deficiency is caused by reason of fraud or the willful intent of the taxpayer to defeat or evade this chapter, the notification or assessment may be made at any time;

  (3) if the notice of deficiency or assessment is founded upon an assertion or determination by the United States that the taxable gifts or estate, or estate or gift tax liability of the taxpayer under the laws of the United States, is greater than such amount reported on any return of the taxpayer filed under the laws of the United States, the notification or assessment under sections 3202 and 3203 of this title may be made within the time prescribed under subsection (a) of this section, or at any time before the expiration of six months after the date the Commissioner is notified, in writing, by the taxpayer or by the United States of the federal assertion or determination, whichever period is the later to expire;

  (4) if the taxpayer and the Commissioner agree, the notification or assessment may be made at any time before the date so agreed upon; and

  (5) the running of the period of limitations for assessment or collection of any estate tax imposed by this chapter shall be suspended in respect of the estate of a decedent claiming a deduction under 26 U.S.C. § 2055(b)(2) as amended until 30 days after the expiration of the period for assessment or collection of the tax imposed by this chapter on the estate of the surviving spouse. (Added 1969, No. 269 (Adj. Sess.), § 1, eff. date, see note under § 7401 of this title; amended 2017, No. 113 (Adj. Sess.), § 190.)

• § 7487. Determination of deficiency, penalty, or interest

  Upon receipt of a notice of deficiency or assessment of penalty or interest under sections 3202 and 3203 of this title, the taxpayer may, within 60 days after the date of the notice or assessment, petition the Commissioner in writing for a determination of that deficiency or assessment. The Commissioner shall thereafter grant a hearing upon the matter and notify the taxpayer in writing of his or her determination concerning the deficiency, penalty, or interest. (Added 1969, No. 269 (Adj. Sess.), § 1, eff. date, see note under § 7401 of this title; amended 1975, No. 154 (Adj. Sess.), § 2, eff. date, see note below; 1989, No. 222 (Adj. Sess.), § 35; 2017, No. 113 (Adj. Sess.), § 191.)

• § 7488. Refunds; petitions for refunds

  (a) At any time within three years after the date a return is required to be filed under this chapter, or six months after a refund was received from the United States with respect to an estate or gift tax liability, or an amount of taxable gifts or of a taxable estate under the laws of the United States, reported in a return filed under the laws of the United States, whichever is later, a taxpayer may petition the Commissioner for the refund of all or any part of the amount of tax paid with respect to the return. Unless the period is extended by agreement of the Commissioner and the taxpayer, the Commissioner shall thereafter, upon notice to the taxpayer, hold a hearing on the claim and shall notify the taxpayer of his or her determination of the claim within 30 days of the hearing. The failure of the Commissioner to refund the amount claimed by a taxpayer within six months of the date of the petition for the refund, under this subsection, shall be considered to be a notification to the taxpayer of the Commissioner’s determination concerning the claim. The notification shall be considered to have been given on the date of the expiration of the six-month period.

  (b) If the Commissioner determines, on a petition for refund or otherwise, that a taxpayer has paid an amount of tax under this chapter that, as of the date of the determination, exceeds the amount of tax liability owing from the taxpayer to the State with respect to the current and all preceding taxable years, under any provision of this title, the Commissioner shall forthwith refund the excess amount to the taxpayer together with interest at the rate per annum established pursuant to section 3108 of this title. That interest shall be computed from the latest of 45 days after the date the return was filed or was due, including any extensions of time thereto or, if the taxpayer filed an amended return or otherwise requested a refund, 45 days after the date the petition or amended return was filed. (Added 1969, No. 269 (Adj. Sess.), § 1, eff. date, see note under § 7401 of this title; amended 1979, No. 105 (Adj. Sess.), § 48; 1993, No. 49, § 15, eff. May 28, 1993; 2009, No. 160 (Adj. Sess.), § 32; 2013, No. 73, § 16, eff. June 5, 2013.)

• § 7489. Procedure for hearings by Commissioner; appeals

  (a) Any hearing granted by the Commissioner under section 7487 or 7488 of this title shall be subject to and governed by 3 V.S.A. chapter 25.

  (b) Any aggrieved taxpayer may, within 30 days, appeal a determination by the Commissioner concerning a notice of deficiency, an assessment of penalty or interest, or claim to refund, to the Washington Superior Court or the Superior Court of the county in which the taxpayer resides or has a place of business. (Added 1969, No. 269 (Adj. Sess.), § 1, eff. date, see note under § 7401 of this title; amended 1971, No. 185 (Adj. Sess.), § 229, eff. March 29, 1972; 1973, No. 193 (Adj. Sess.), § 3, eff. April 9, 1974; 1979, No. 105 (Adj. Sess.), § 21.)

• § 7490. Payment and collection of deficiencies and assessments; jeopardy notices

  (a) Upon notification to a taxpayer of any deficiency, and upon assessment against the taxpayer of any penalty or interest, under sections 3202 and 3203 of this title, the amount of the assessment shall be payable forthwith and the amount of the deficiency and assessment shall be collectible by the Commissioner 30 days after the date of the notification or assessment. The collection by the Commissioner of the deficiency, penalty, or interest shall be stayed:

  (1) if within 30 days after the notification of deficiency or the assessment under sections 3202 and 3203 of this title the taxpayer files a petition for determination by the Commissioner in accordance with section 7487 of this title, collection shall be stayed until 30 days after the notification of the taxpayer of the determination; and

  (2) if within 30 days of the notification of determination the taxpayer files a notice of appeal in such manner as the Supreme Court may by rule provide, collection shall be stayed pending judgment of the Court upon the appeal; and

  (3) under such further circumstances and upon such terms as the Commissioner prescribes.

  (b) Notwithstanding subsection (a) of this section, the Commissioner, if he or she believes the collection from a taxpayer of any deficiency, penalty, or interest to be in jeopardy, may demand in writing that the taxpayer pay the deficiency, penalty, or interest forthwith. The demand may be made concurrently with or after the notice of deficiency or the assessment of penalty or interest given to the taxpayer under sections 3202 and 3203 of this title. The amount of deficiency, penalty, or interest shall be collectible by the Commissioner on the date of the demand, unless the taxpayer files with the Commissioner a bond in an amount equal to the deficiency, penalty, or interest sought to be collected as security for such amount as finally may be determined. In the event that it is finally determined that the taxpayer was not liable for the amount of the deficiency, penalty, or interest referred to in any demand under this subsection, the Commissioner shall reimburse the taxpayer promptly upon such determination for the reasonable cost to the taxpayer of any bond obtained by him or her for the purposes of this subsection. (Added 1969, No. 269 (Adj. Sess.), § 1, eff. date, see note under § 7401 of this title; amended 1971, No. 185 (Adj. Sess.), § 230, eff. March 29, 1972; 1979, No. 105 (Adj. Sess.), § 22; 2017, No. 113 (Adj. Sess.), § 192.)

• § 7491. Remedy exclusive; determination final

  (a) The exclusive remedy of a taxpayer with respect to the refund of monies paid in connection with a return filed under this chapter shall be the petition for refund provided under section 7488 of this title and the appeal from an adverse determination of the petition for refund provided under section 7489 of this title. The exclusive remedy of a taxpayer with respect to a notification of deficiency or assessment of penalty or interest under sections 3202 and 3203 of this title shall be the petition for determination of the deficiency or assessment provided under section 7487 of this title and the appeal from an adverse determination of deficiency or assessment provided under section 7489 of this title.

  (b) Upon the failure of a taxpayer to petition in accordance with section 7487 of this title from a notice of deficiency or assessment under sections 3202 and 3203 of this title, or to appeal in accordance with section 7489 of this title from a determination of a deficiency of assessment of tax liability under section 7487 of this title, the taxpayer shall be bound by the terms of the notification, assessment, or determination, as the case may be. The taxpayer shall not thereafter contest, either directly or indirectly, the tax liability as therein set forth in any proceeding, including a proceeding upon a claim of refund of all or any part of any payment made with respect to the tax liability or a proceeding for the enforcement or collection of all or any part of the tax liability. (Added 1969, No. 269 (Adj. Sess.), § 1, eff. date, see note under § 7401 of this title; amended 2017, No. 113 (Adj. Sess.), § 193.)

• § 7492. Determination of taxable gifts or estate and gift and estate tax liability under the laws of the United States

  For purposes of this chapter, a taxpayer’s taxable gifts or taxable estate or gift or estate tax liability under the laws of the United States shall be determined by reference to the judicial decisions and administrative rulings of the United States.

  (1) A determination by the United States that establishes the amount of a taxpayer’s taxable gifts or taxable estate or gift or estate tax liability under the laws of the United States shall be binding on the taxpayer and the State in calculating the taxpayer’s liability to Vermont under this chapter. For purposes of this section, “determination by the United States” means:

  (A) a decision by the Tax Court of the United States or a judgment, decree, or other order by any U.S. court of competent jurisdiction that has become final; or

  (B) a closing agreement under 26 U.S.C. § 7121.

  (2) For any taxable year, the payment to the United States by any taxpayer of an aggregate amount of gift or estate tax, whether under a claim of deficiency, demand, or otherwise, and whether under protest or otherwise, shall be prima facie evidence for purposes of this chapter that the aggregate amount, less any refunds received by the taxpayer from the United States with respect to gift or estate tax payments for that year, as the case may be, constitutes the gift or estate tax liability of the taxpayer under the laws of the United States, and that the items of gifts or of an estate, or of income, deductions, exemptions, and credits with respect to which the gift or estate tax liability was calculated are the items of gifts or of an estate, or of income, deductions, exemptions, and credits of the taxpayer under the laws of the United States.

  (3) For purposes of this section, the affidavit of any U.S. district director of internal revenue that a taxpayer:

  (A) has paid a specified aggregate amount of gift or estate tax;

  (B) has received a specified amount of refund with respect to his or her gift or estate tax payments; or

  (C) has paid any amount of tax calculated with respect to specified items of gifts or of an estate, or of income, deductions, exemptions, or credits, shall be prima facie evidence of the truth of those matters set forth in the affidavit. (Added 1969, No. 269 (Adj. Sess.), § 1, eff. date, see note under § 7401 of this title; amended 2021, No. 105 (Adj. Sess.), § 561, eff. July 1, 2022; 2023, No. 6, § 385, eff. July 1, 2023.)

• § 7493. Tax a debt to the State

  Any tax liability imposed by this chapter becomes, from the time the tax liability is due and payable, a debt of the taxpayer to the State to be recovered in an action on this title. (Added 1969, No. 269 (Adj. Sess.), § 1, eff. date, see note under § 7401 of this title.)

• § 7494. Action to collect taxes; limitations

  Action may be brought by the Attorney General of the State at the instance of the Commissioner in the name of the State to recover the amount of the tax liability of any taxpayer, if the action is brought within six years after the date the tax liability was collectible under section 7490 of this title. The action shall be returned in the county where the taxpayer resides or has a place of business, and if the taxpayer neither resides nor has a place of business in the State, the action shall be returnable in Washington Superior Court. (Added 1969, No. 269 (Adj. Sess.), § 1, eff. date, see note under § 7401 of this title; amended 1973, No. 193 (Adj. Sess.), § 3, eff. April 9, 1974.)

• § 7495. Levy for nonpayment

  When all or any portion of a tax liability imposed by this chapter is not paid within 60 days after it becomes collectible under section 7490 of this title, the Commissioner may issue a warrant under the Commissioner’s hand and official seal directed to the sheriff of any county in this State. The warrant shall command the sheriff to levy upon and sell the real and personal property of the taxpayer for the payment of the unpaid tax liability imposed by this chapter, together with allowable fees and costs. The levy and sale shall be effected in the manner, and shall be subject to the limitations, prescribed for the levy, distraint, and sale of property for the nonpayment of the taxes under sections 5191–5193 and 5253–5263 of this title. The sheriff shall return the warrant to the Commissioner and pay to the Commissioner the money collected thereunder within time specified in the warrant. (Added 1969, No. 269 (Adj. Sess.), § 1, eff. date, see note under § 7401 of this title; amended 2021, No. 105 (Adj. Sess.), § 562, eff. July 1, 2022.)

• § 7496. Liability for failure or delinquency

  An individual, fiduciary, or officer or employee of any corporation, or partner or employee of any partnership who, with intent to evade any requirement of this chapter or any lawful requirement of the Commissioner hereunder, fails to pay or remit a tax liability when due or to make, sign, verify, or file a return when required so to do, or to supply any information required by or under this chapter who, with like intent, makes, renders, signs, verifies, or files a false or fraudulent return or information, shall be fined not more than $1,000.00 or be imprisoned not more than one year, or both. (Added 1969, No. 269 (Adj. Sess.) § 1, eff. date, see note under § 7401 of this title.)

• § 7497. Tax liability as property lien

  (a) If any corporation, partnership, individual, trust, or estate required to pay or remit any tax liability under this chapter neglects or refuses to pay it in accordance with this chapter after notification or assessment thereof under sections 3202 and 3203 of this title, the aggregate amount of the tax liability then due and owing, together with any costs that may accrue in addition thereto, shall be a lien in favor of this State upon all property and rights to property, whether real or personal, belonging to the corporation, partnership, individual, trust, or estate. The lien shall arise at the time the notification or assessment is made by the Commissioner and shall continue until the aggregate tax liability with costs is satisfied in full or becomes unenforceable by reason of lapse of time. The lien shall be valid as against any subsequent mortgagee, pledgee, purchaser, or judgment creditor when notice of the lien and the sum due has been filed by the Commissioner with the clerk of the town or city in which the property subject to lien is situated or, in the case of an unorganized town, gore, or grant, in the office of the clerk of the county wherein the property is situated. In the case of a motor vehicle, the lien shall also be valid when a notation of the lien is made on the certificate of title and shall only be valid as against any subsequent mortgagee, pledgee, bona fide purchaser, or judgment creditor when such notation is made. In the case of any prior mortgage on any real or personal property so written as to secure a present debt and also future advances by the mortgagee to the mortgagor, the lien herein provided, when notice thereof has been filed in the proper clerk’s office, shall be subject to the prior mortgage unless the Commissioner also notifies the mortgagee of the recording of the lien in writing, in which case any indebtedness thereafter created from the mortgagor to the mortgagee shall be junior to the lien herein provided for.

  (b) The Commissioner shall issue to the taxpayer a certificate of release of the lien if:

  (1) the Commissioner finds that the liability for the amount demanded, together with costs, has been satisfied or has become unenforceable by reason of lapse of time; or

  (2) there is furnished to the Commissioner a bond with surety approved by the Commissioner in a sum sufficient to equal the amount demanded, together with costs, the bond to be conditioned upon the payment of any judgment rendered in proceedings regularly instituted by the Commissioner to enforce collection thereof at law or of any amount agreed upon in writing by the Commissioner to constitute the full amount of the liability; or

  (3) the Commissioner determines at any time that the interest of this State in the property has no value.

  (c) The lien provided for by this section may be foreclosed at any time after the tax liability with respect to which the lien arose becomes collectible under section 7490 of this title. In the case of real property, the lien may be foreclosed in the manner prescribed in 12 V.S.A. chapter 172 and in such rules as the Supreme Court may promulgate for the foreclosure of mortgages on real estate. In the case of personal property, the lien may be satisfied in the manner prescribed in 9A V.S.A. article 9 for the disposition of collateral under a security interest or in the manner provided by law for the foreclosure of other security interests in personal property. (Added 1969, No. 269 (Adj. Sess.), § 1, eff. date, see note under § 7401 of this title; amended 1971, No. 185 (Adj. Sess.), § 231, eff. March 29, 1972; 1989, No. 119, § 19, eff. June 22, 1989; 2017, No. 113 (Adj. Sess.), § 194; 2021, No. 105 (Adj. Sess.), § 563, eff. July 1, 2022.)