There are only few states in the United States where state income relies heavily on tourism industry, and Vermont is one of them. Vermont has the advantage in possessing spectacular landscape, clean environment, and attractive agriculturally based rural community, which provide an excellent opportunity for tourism industry development. Vermont economy also benefits from the tourists' activities because: (1) tourists contribute significant amount of income to Vermont economy, especially from ski business; (2) tourists' expenditures in Vermont become a significant source of state tax income; and (3) to sustain tourism industry in Vermont helps to preserve rural community environment as well as nature beauty in Vermont. Although tourism industry is very important to Vermont, there is limited information associated with the economic impacts from the tourism industry to Vermont economy. The objectives of this article include: (1) to quantify the economic activities of tourism-related sectors in Vermont in order to create a tourism industry; and (2) to estimate the economic impacts of the tourism industry on Vermont economy in terms of total output, Gross State Product (GSP), employment, and dependency and inter-industry linkages between tourism industry and other industries in Vermont. Three surveys have been designed to gather data for tourists' activities and expenditures: (1) a nation-wide visitor survey in order to understand the profiles and expenditures of Vermont tourists; (1) a lodging business survey to estimate total revenue and cost structures for three sizes of the lodging businesses - small, medium, and large; and (3) a ski resort survey to estimate ski total revenue and cost structure and its contribution to recreation industry in Vermont. Further analysis in tourism impacts on Vermont economy is carried out by running a input-output model using Impact analysis for PLANing (IMPLAN) software. Several interesting results are concluded from this study. For the profile of the visitors, the majority tourists coming to Vermont are domestic pleasure travelers, every visiting domestic household spends approximately $323.66 for every trip to Vermont, and 75% of the domestic pleasure travelers stay over night with either lodging businesses or private residents. For lodging businesses, Bed and Breakfast counts for 36% in Vermont lodging industry, more than 50% lodging businesses in Vermont has 10 rooms or less (defined as small), annual average occupancy rate is 38%, different sizes of the lodging businesses has significantly different revenue and cost structures, and finally but not the least - higher percentages of the total inputs purchased by small lodging businesses are from local market relative to large lodging businesses. For ski businesses in Vermont, 34% of the skiers come from Vermont and 69% of the skiers come from New England region, ski area on average hire 130 full time year-round employees with average salary of $29,000, and finally winter average revenue for a ski area is $19 millions of dollars ($4.3 millions of dollars in summer/fall). The impacts of tourism industry on Vermont economy include: (1) tourism industry counts for 15% of the total state output value, 22% of the state employment, and 26% of the indirect business tax; (2) for every million dollars spent by tourists in Vermont - 35 jobs are created, additional 690 thousands of dollars worth output will be generated, employment compensation will increase by $540,546 dollars, and indirect business tax will increase by $127,807 dollars. It has been shown that Tourism industry contributes significantly to Vermont economy relative to Agriculture and Manufacturing industries.