After significant debate in the Vermont legislature, a major corporate income tax reform bill was passed this year, impacting corporations for tax years beginning on or after January 1, 2023. Five major changes were enacted, namely: (1) a shift from a three-factor formula to a single sales factor, making Vermont the last state in New England to adopt single sales factor; (2) repeal of the “80/20” rule to require all U.S. corporations to be included in the unitary group and to exclude all foreign corporations; (3) repeal of the “throwback rule” for sales originating in Vermont to the federal government or to a state where such sales are not taxable; (4) a shift from Joyce to Finnigan for purposes of computing the sales factor in a unitary group; and (5) revisions to the minimum tax thresholds, shifting from three tiers of $300, $500 and $750 to five tiers of $100, $500, $2,000, $6,000 and $100,000. Act 148 requires that the Department of Taxes adopt new combined filing rules and to report on such rules and any necessary legislation to House Ways and Means and Senate Finance on or before January 15, 2024. RYP’s Kathryn Michaelis testified regarding these provisions before the Senate Finance Committee in February of 2022. For a full text of the bill, please see Act 148.