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Why Pay Taxes?

Federal and state governments have the task of raising money to provide for the common good of the people. Levying taxes is one way the government raises funds for building and maintaining roads and bridges, educating our children, keeping our environment clean, safe, and healthy, and much more. The Internal Revenue Service (IRS) administers federal taxes, and the  Vermont Department of Taxes administers state taxes.  

Taxation in Vermont

The Vermont Department of Taxes serves Vermonters by collecting about 30 state tax types to pay for the goods and services people receive from the state. In addition to personal, business, and corporate income taxes, Vermont raises tax revenue through sales and use tax, meals and rooms tax, property tax, and other smaller taxes. The Department of Taxes works to help taxpayers pay the right amount of tax, to administer the tax process as efficiently and quickly as possible, and to protect taxpayer dollars by detecting and preventing identity theft and other fraud.

Income Taxes: “Pay-As-You-Go”

Federal and state income taxes are “pay-as-you-go.” In other words, your employer deducts and pays federal and state income taxes on your behalf from each paycheck over the course of the year. This is known as income tax “withholding.” Paying a portion of your income taxes each paycheck means you don’t have to come up with the entire amount in a lump sum when you file your taxes in April of the following year. It also ensures that government gets the right amount of tax on time.

Need Resources? We're Here to Help

MyMoney.Vermont.Gov is organized to provide helpful information about paying and filing taxes. Check out these resources: