Taxes in Montpelier
Montpelier and Vermont's real, current 2026 tax picture runs in two opposite directions: a genuinely HIGH graduated state income tax (3.35%-8.75% top rate) weighed against a genuinely below-average local property tax rate and a modest combined sales tax.
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Learn moreA Genuinely High, Graduated State Income Tax
Vermont levies a real, current, graduated state individual income tax running from 3.35% on the first $45,400 of taxable income up to a top marginal rate of 8.75% on income above $229,550 for 2026 -- among the higher top rates of any state that levies an income tax at all, the opposite direction from several of this project's low-income-tax Tier A+ markets.
A Combined Sales Tax of 7.0%
Vermont's state sales tax rate is 6.0%, and the City of Montpelier adds a real, current 1% Local Options Tax, for a combined rate of 7.0% -- the maximum combined rate available under Vermont's local-option framework.
Property Tax Runs the Opposite Direction From the Income Tax
As detailed on the property-taxes topic page, Montpelier's own cited median effective property tax rate (~0.79%) runs BELOW both the national comparison figure and Vermont's own statewide median -- a real, honest counterpoint to the state's high-income-tax reputation, though this record flags the citation as single-sourced this pass.
Key takeaways
- Vermont's graduated state income tax runs genuinely high (3.35%-8.75% top rate for 2026) -- a real, current cost factor to budget for.
- Montpelier's combined sales tax rate runs 7.0% (6.0% state + 1.0% local option).
- Property tax runs the opposite direction: Montpelier's own cited median effective rate (~0.79%) runs below both national and Vermont statewide comparison figures.
- Confirm a specific property's actual property tax rate directly with the City of Montpelier -- this record's property-tax citation is single-sourced this pass.
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