32 V.S.A. § 5937: Priorities in claims to setoff

(a) Priority in multiple claims to refunds allowed to be set off under the provisions of this chapter shall be in descending order of magnitude.

(b) Notwithstanding the priority set forth in subsection (a) of this section, the Department may apply a refund to the outstanding Vermont State tax liability of a taxpayer, including a taxpayer’s liability for interest, penalties, and fees, before any portion of a refund is transferred to a claimant agency.