Vermont Statutes Title 32. Taxation and Finance, § 7401. Purpose

(a) This chapter is intended to conform the Vermont estate tax laws with the estate and gift tax provisions of the U.S. Internal Revenue Code, except as otherwise expressly provided, in order to simplify the taxpayer's filing of returns, reduce the taxpayer's accounting burdens, and facilitate the collection and administration of these taxes. Because federal estate and gift tax law does not recognize a civil union in the same manner as Vermont law, and because a reduction in the Vermont estate tax liability for parties to a civil union based upon the federal marital deduction would not reduce the total estate tax liability, estates of parties to a civil union shall be subject to tax based on their actual federal estate tax liability and, notwithstanding the provisions of section 7442a of this title, the actual federal credit for state death taxes as provided under the Economic Growth and Tax Relief Reconciliation Act of 2001.  1 Beginning with estates of decedents with a date of death on or after January 1, 2005, this chapter shall apply to parties to a civil union and surviving parties to a civil union as if federal estate tax law recognized a civil union in the same manner as Vermont law.

(b) It is intended that taxpayers shall be taxed only upon the Vermont taxable estate or upon Vermont taxable gifts for any calendar year, but that the rate at which the Vermont taxable estate or Vermont taxable gifts are taxed under this chapter shall reflect the taxpayer's ability to pay as measured by the value of his or her federal taxable estate or federal taxable gifts for the taxable year.