Bank Franchise Tax

Overview

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.  Beginning January 1, 2017, tax is paid monthly, with a return filed quarterly. This tax is in lieu of corporate income tax.

Effective January 1, 2017: Monthly Payments, Quarterly Returns

Bank Franchise Tax is estimated and paid monthly, with a payment due on the 25th day of the following month. For example, the first monthly payment is due by February 25th, unless 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.

In order 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

Mandate for Electronic Filing of Returns
Filing the Bank Franchise Tax Return online through the Vermont Department of Taxes online system, myVTax, has been mandated by the Commissioner of Taxes. 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 detail required to review Bank Franchise Tax credits.

Filing Deadlines

Bank Franchise Tax is estimated and paid monthly, with a payment due on the 25th day of the following month.

Print Due Dates

   
Period Ending Due Date Submit
12/31/2019 1/27/2020 Submit Return together with Payment for the Quarter ending 12/31/2019 in myVTax.
3/31/2020 2/27/2020 Estimated Payment for Jan. 2020
3/31/2020 3/25/2020 Estimated Payment for Feb. 2020
3/31/2020 4/27/2020 Submit Return and Reconciled Payment for the quarter ending 3/31/2020 in myVTax
6/30/2020 5/26/2020 Estimated Payment for Apr. 2020
6/30/2020 6/25/2020 Estimated Payment for May 2020
6/30/2020 7/27/2020 Submit Return and Reconciled Payment for the quarter ending 6/30/2020 in myVTax
9/30/2020 8/25/2020 Estimated Payment for Jul. 2020
9/30/2020 9/25/2020 Estimated Payment for Aug. 2020
9/30/2020 10/26/2020 Submit Return and Reconciled Payment for the quarter ending 9/30/2020 in myVTax
12/31/2020 11/26/2020 Estimated Payment for Oct. 2020
12/31/2020 12/28/2020 Estimated Payment for Nov. 2020
12/31/2020 1/25/2021 Submit Return and Reconciled Payment for the quarter ending 12/31/2020 in myVTax