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Vermont Use Tax not calculated correctly using AGI method

The Vermont state return software calculates VT Use Tax incorrectly using the AGI method.  The program correctly asks for items that cost greater than $1,000, but an additional amount for items under $1000 is supposed to be determined using the Use Tax Reporting Table based on AGI. However, if there are no items over $1000, turbo tax is returning an an amount of $0 regardless of AGI.

I found a way to manually override the incorrect entry, but that defeats the purpose of the software - I didn't want to manually fill in forms!

Is there a plan to correct this bug?
  • I have encountered this same bug.  However, in previous years it was clear that the worksheet was only for purchases over $1000 when using the AGI method. This year, both the guided and help screens seem to indicate that all purchases need to be entered, regardless of which method is used.  If you say 'yes' to having purchased items for which no tax was paid and you select the AGI method, it takes you to the worksheet where it says to list purchases individually, or enter a sum of all purchases.  If you enter a number which is greater than $1000, it ignores the AGI tax table and uses a straigth 6%.  If you enter '0', it says no use tax is owed - which is wrong given that you indicated that you made purchases for which no tax was paid.  If you enter a series of line items each less than $1000 or even a single line item for $1, then the AGI tax table is used.  Unfortunately, this is also wrong.  If the worksheet is truly for individual purchases over $1000, then use of the AGI tax table should NOT depend on entries there.  It should be based on answering 'yes' to the question about having made purchases where no tax was collected.  

    Using the AGI method, and assuming you've said 'yes' for having made purhases for which no tax was collected, it should start by using the AGI tax table.   The worksheet should then be clear about ONLY listing individual purchases over $1000.   If items are listed, the individual use tax of 6% should be calculated and added to the number obtained from the AGI tax table.

    At least that's my understanding of how it should work - but I'm not a tax accountant.  Not sure why TT can't seem to get this right.  There were errors in last year's forms as well.
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We are aware of this issue and it will be fixed in the next release. The next Vermont update will be available around 4/6/2012.
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