The Bank Franchise Tax is paid by banks and other financial institutions with Vermont deposits. The tax is computed monthly on average monthly deposits for the previous 12 months. Tax is paid monthly, with a return filed quarterly. This tax is instead of corporate income tax. Bank Franchise Tax is referenced in Vermont Statute, 32 V.S.A. § 5836.
Bank Franchise Tax is estimated and paid monthly, with a payment due on the 25th day of the following month. For example, for January the monthly payment is due February 25. If the due date falls on Saturday or Sunday, the next business day becomes the due date. For the first two months of each quarter, make estimated payments using myVTax. Select MAKE A PAYMENT located under the I WANT TO section.
To avoid an underpayment of your estimated tax, which may result in penalty and interest charges, your estimated monthly payments for each of the first two months of any quarter must either be:
- equal to 100% of the tax due for the previous month’s tax, or
- 90% of the month’s actual tax liability as computed at the end of the quarter.
The Bank Franchise Tax Return is filed quarterly, due the 25th day of the month following the end of the quarter. Compute tax due for each of the months in the quarter. Reconcile the amount due with amounts paid as estimates for the first two months in the quarter, and pay the third monthly payment with the Return.
How to File
Electronic Filing of Returns
The Bank Franchise Tax Return must be filed online through the Vermont Department of Taxes online system, myVTax. Register, file your return, and pay taxes due at myVTax. If you have any questions, contact us at 802-828-2551 or tax.business@vermont.gov.
Affordable Housing Tax Credits or Downtown & Village Center Tax Credits
Every bank that has Affordable Housing Tax Credits or Downtown & Village Center Tax Credits
- carried forward from a previous period, or
- newly allocated to the bank during the period reported, or
- expired/disposed of during the period, or
- applied during the period reported,
must complete the Bank Franchise Affordable Housing Tax Credits and/or Downtown & Village Center Tax Credits Worksheets, as applicable, and attach the completed worksheets to the return together with supporting documentation. These worksheets provide the detail required to review Bank Franchise Tax credits.