Vermont is a state known for its commitment to sustainability, innovation, and small-business support.  The state provides a range of economic development incentives to foster business growth, encourage job creation, and attract new investments, especially in sectors such as technology, manufacturing, agriculture, and renewable energy.  Below are some of the key incentives available for businesses in Vermont.

Vermont Employment Growth Incentive (VEGI)

Overview

The VEGI program is designed to encourage businesses to create high-quality jobs and invest in capital in Vermont.  The program offers performance-based incentives to businesses that meet specific job creation and investment criteria.

Eligibility

• The business must create at least 10 new full-time jobs or 5 jobs in economically distressed areas.

• Jobs must meet or exceed the state’s average wage threshold.

• The business must make substantial capital investments in Vermont.

Incentive Value

• The program offers rebates on the business’s Vermont income tax liability, based on the number of jobs created, wages paid, and the capital investment made.

• The amount of the rebate is negotiated but can cover up to 40% of eligible tax liabilities, with incentives up to $1 million or more.

Application Process

Businesses must apply through the Vermont Economic Development Authority (VEDA), providing details on their project, job creation plans, and investment strategies.

Vermont Renewable Energy and Energy Efficiency Tax Credit

Overview

Vermont offers a tax credit for businesses that invest in renewable energy and energy efficiency projects.  This program is part of the state’s commitment to reducing energy consumption and promoting sustainability.

Eligibility

• The business must be involved in a renewable energy project (e.g., solar, wind, geothermal) or an energy-efficient improvement (e.g., energy-efficient lighting or building upgrades).

• The business must be located in Vermont and invest in eligible energy systems or improvements.

Incentive Value

• The tax credit can cover up to 25% of the costs for qualifying renewable energy and energy-efficient projects.

• The maximum credit available is up to $50,000 for businesses.

Application Process

Businesses must apply through the Vermont Department of Public Service, submitting a proposal and energy plan for review and approval.

Vermont New Worker Credit

Overview

The New Worker Credit provides an incentive for businesses that hire new employees and create job opportunities in Vermont.  This credit aims to boost employment and reduce unemployment rates in specific areas.

Eligibility

• The business must hire new employees and create permanent full-time jobs.

• The jobs must meet certain wage requirements, typically above the state’s average wage for the area.

• The business must be located in Vermont and conduct operations that support the creation of new jobs.

Incentive Value

• Businesses can receive a credit of up to $2,000 per new worker hired, with a maximum of 500 new hires eligible for the credit.

• The total available credit will depend on the number of new hires and the business’s specific economic impact.

Application Process

Businesses must apply to the Vermont Department of Taxes (VDT), providing documentation of new hires and wage data.

Vermont Investment Tax Credit

Overview

The Vermont Investment Tax Credit (ITC) is designed to help businesses offset the costs of purchasing and installing new equipment and machinery.  The goal is to encourage businesses to reinvest in their infrastructure and expand their operations within the state.

Eligibility

• The business must be engaged in manufacturing or similar industries, with a significant portion of its revenue coming from the sale of products.

• The business must invest in new, tangible personal property, including equipment and machinery.

Incentive Value

• The tax credit offers up to 24% of the investment made in new equipment, machinery, and related assets.

• The credit is spread over a 5-year period, with businesses able to claim a portion each year.

Application Process

Businesses must apply through VDT, submitting proof of investment and related expenditures.

Vermont Film Incentive Program

Overview

Vermont offers an incentive program for film, television, and digital media projects to encourage media production in the state.  The program provides tax credits to businesses in the film and media industry, reducing production costs and promoting Vermont as a location for film and media projects.

Eligibility

• The business must be producing a qualifying film, television show, or digital media project in Vermont.

• The production must meet certain budgetary and employment requirements, with a minimum spend within the state.

Incentive Value

• The program offers a 25% tax credit on eligible production expenditures, including labor costs, equipment rentals, and location fees.

• The credit applies to both in-state and out-of-state expenditures.

Application Process

Businesses must apply through the Vermont Film and Media Office, submitting a production budget and other required documentation.

Vermont Sales and Use Tax Exemption for Manufacturing

Overview

Vermont provides a sales and use tax exemption for manufacturing equipment, machinery, and materials used in production.  This incentive is intended to lower the upfront costs for businesses engaged in manufacturing or similar activities.

Eligibility

• The business must be engaged in manufacturing or processing activities.

• The equipment or machinery must be used directly in the manufacturing process.

Incentive Value

• The sales tax exemption applies to qualifying machinery, equipment, and raw materials used in manufacturing.

• Businesses can reduce or eliminate the costs associated with these purchases.

Application Process

Businesses must apply through VDT, providing documentation of purchases and their intended use in the manufacturing process.

Vermont Downtown and Village Center Tax Credit

Overview

Vermont provides tax credits for businesses that invest in the revitalization of designated downtowns and village centers.  This program encourages businesses to improve commercial properties in targeted areas, enhancing the vibrancy of local communities.

Eligibility

• The business must be located in a designated downtown or village center in Vermont.

• The business must make improvements to a commercial property within the designated area.

Incentive Value

• The tax credit provides up to 25% of eligible project costs, including the costs for renovation, restoration, or improvement.

• The maximum credit available is $50,000 per project.

Application Process

Businesses must apply to the Vermont Division for Historic Preservation, submitting plans and estimates for the proposed project.

Vermont Research and Development (R&D) Tax Credit

Overview

Vermont’s R&D Tax Credit is aimed at supporting businesses that engage in research and development activities within the state.  This incentive helps companies invest in innovation and technological advancement.

Eligibility

• The business must be conducting R&D activities in Vermont.

• The activities must result in the development of new or improved products, processes, or technologies.

Incentive Value

• The credit is worth up to 5% of eligible R&D expenditures made in Vermont.

• There are no maximum limits on the credit, so businesses can apply for credits based on their actual investment in R&D.

Application Process

Businesses must apply to VDT, submitting detailed information on their R&D activities and expenditures.