Form Rw-171 - Vermont Withholding Tax Return For Transfer Of Real Property Page 3
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4VERMONT WITHHOLDING TAX RETURN
FOR TRANSFER OF REAL PROPERTY (Form RW-171)
4. The seller is a mortgagor conveying the mortgaged
GENERAL INFORMATION
property to a mortgagee in a foreclosure or transfer in
PURPOSE OF FORM - A 2.5% withholding obligation is
lieu of foreclosure, with no additional consideration.
imposed on the buyer or other transferee (referred to herein as
Please check the applicable box on the Property Transfer Tax
“buyer”) when Vermont real property is acquired from a
Return Withholding Certification section (page 3 of the form) if
nonresident of Vermont. The buyer must withhold 2.5% of the
one of these exemptions applies.
consideration paid for the property. If the buyer fails to withhold,
the buyer will be personally liable for the amount required to be
WITHHOLDING CERTIFICATE ISSUED BY THE
withheld.
COMMISSIONER OF TAXES - A withholding certificate may
be issued by the Commissioner of Taxes to reduce or eliminate
WHO MUST FILE - A buyer of a Vermont real property interest,
withholding on transfers of Vermont real property interests by
including a corporation, limited liability company, partnership or
nonresidents. A certificate may be issued if:
fiduciary that is required to withhold tax, must file Form RW-171.
If two or more persons are joint buyers, each of them is
1. No tax is due on the gain from the transfer;
obligated to withhold. However, the obligation of each will be
2. The seller or buyer has provided adequate security to
met if one of the joint buyers withholds and transmits the
cover the tax liability;
required amount to the Commissioner of Taxes.
3. Reduced withholding is appropriate because the 2.5%
A nonresident individual is one who is domiciled outside the
amount exceeds the seller’s maximum tax liability;
state at the time of closing. A Partnership, Limited Liability
Company or a Subchapter S Corporation is deemed to be a
4. Reduced withholding is appropriate to reflect the gain
nonresident of Vermont if the controlling interest is held by
allocated to a Vermont resident when there are both
nonresidents. A Corporation (other than a Subchapter S
Vermont resident and nonresident sellers.
Corporation) that was incorporated outside Vermont is a
To obtain a certificate that no tax is due, or that a reduced
nonresident unless it has its principal place of business in
amount may be withheld, call (802) 828-6680.
Vermont and does no business in the state of incorporation.
LINE-BY-LINE INSTRUCTIONS
WHEN TO FILE - A buyer must report and transmit the tax
withheld to the Commissioner of Taxes within 30 days after the
(Use Blue or Black ink Only)
date of transfer.
Form RW-171 is a two-page form. Please submit page 1
WHERE TO FILE - File Form RW-171 directly with the
(signature page) and page 2 (Schedule A) together. Failure to
Commissioner of Taxes, Vermont Department of Taxes, 133
do so will result in form being returned to buyer.
State Street, Montpelier, VT 05633. Do not file this return with
Lines 1-8. Enter the name, address, social security number or
the town clerk.
federal ID number of each withholding agent (buyer).
EXEMPTIONS - The buyer is not required to withhold or file this
Line 9. Enter the location of the property, including town and
return if one of the following applies:
street address.
1. At the time of the transfer, the seller certifies to the
Line 10. Enter the date the property was acquired by the seller.
buyer on the Property Transfer Tax Return, under
Line 11. Enter the date of this transfer.
penalty of perjury, the transferor’s social security
number and the fact that each seller is a Vermont
Line 12. Enter the total contract sales price.
resident or an estate.
Line 13. Check the appropriate box to indicate the amount
2. The buyer or seller has obtained a certificate from the
withheld. If the parties obtained a withholding certificate from
Commissioner of Taxes in advance of the sale, stating
the Commissioner of Taxes authorizing a reduced rate of
that no income tax is due or that the parties have
withholding, enter the certificate number and attach a copy of
provided adequate security to cover the liability.
the certificate to the return.
3. The buyer certifies on the Property Transfer Tax
Line 14. Enter the dollar amount withheld.
Return that this is a transfer without consideration. A
Line 15. Enter the number of Schedule “A”s filled out for this
transaction is NOT exempt if consideration is paid.
property transfer. A separate Schedule “A” is required for each
Consideration paid includes the value of services or
individual or entity receiving proceeds from the transfer.
goods, forgiveness of debt, or other items which are
deemed consideration under the Internal Revenue
Code.
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