Richard and Amy Tarrant v. Department of Taxes

Summary

The Supreme Court of Vermont held that the taxpayers could claim a credit against their 1989 Vermont income taxes for their pro rata share of corporate-level taxes paid by their S corporation to states that did not recognize pass-through taxation. The court concluded that the statutory credit provision was ambiguous, that a later enactment expressly disallowing such credits changed rather than clarified prior law, and that Vermont's policy against duplicative taxation supported the credit. Katz, specially assigned, dissenting, would have deferred to the Commissioner's reasonable interpretation and denied the credit because the taxpayers did not personally pay the out-of-state corporate taxes.