Statutory Purposes REPORT Draft 01-07-2014 Purposes REPORT 01-15-2014.pdfExempts income related to...

STATUTORY PURPOSES REPORTJanuary 15, 2014

2013 Act No. 73 Sections 4 and 5 (see language below) required the JFC torecommend a statutory purpose for every tax exemption, exclusion, deduction orcredit by January 15, 2014. It was determined that proposals would be made onlyfor expenditures contained in Vermont statute. The JFC reviewed statutory purposeproposals during the summer and fall meetings. Attached is the catalogue list of taxexpenditures by tax type with additional background information from the biennialTax Expenditure Report and a proposed statutory purpose. As required theserecommendations are also included as draft legislation in bill form. There aredifferences in the two documents mainly due to the necessity of conforming theproposals to drafting conventions and minor editing.

2013 Act No. 73

Sec. 4. 32 V.S.A. § 312(d) is added to read:(d) Every tax expenditure in the tax expenditure report required by this section shall beaccompanied in statute by a statutory purpose explaining the policy goal behind theexemption, exclusion, deduction, or credit applicable to the tax. The statutory purposeshall appear as a separate subsection or subdivision in statute and shall bear the title“Statutory Purpose.” Notwithstanding any other provision of law, a tax expenditure listedin the tax expenditure report that lacks a statutory purpose in statute shall not beimplemented or enforced until a statutory purpose is provided.

Sec. 5. TAX EXPENDITURE PURPOSESThe Joint Fiscal Committee shall draft a statutory purpose for each tax expenditure in thereport required by 32 V.S.A. § 312 that explains the policy goal behind the exemption,exclusion, deduction, or credit applicable to the tax. For the purpose of this report, theCommittee shall have the assistance of the Department of Taxes, the Joint Fiscal Office,and the Office of Legislative Council. The Committee shall report its findings andrecommendations to the Senate Committee on Finance and the House Committee onWays and Means by January 15, 2014. The report of the Committee shall consist of awritten catalogue for Vermont’s tax expenditures and draft legislation, in bill form,providing a statutory purpose for each tax expenditure. Upon receipt of the report underthis section, the Senate Committee on Finance shall introduce a bill to adopt statutorypurposes during the 2014 legislative session.

Report prepared jointly by the Joint Fiscal Office and Legislative Council.

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DRAFT1.000 Adjustments to Federal Taxable Income

1.001 Vermont Municipal Bond Income Exemption

Statute: 32 V.S.A. §5811(21)(A)(i)Enacted: 1986Estimate: $3,700,700# Taxpayers: 5,800

Interest income from Vermont state and local government obligations is exemptfrom taxation in Vermont. However, interest income from non-Vermont state andlocal obligations is added to the amount of federal taxable income.

PURPOSE To encourage investment in Vermont state and local bonds and maintain thestate’s favorable bond rating.

1.002 Capital Gains Exclusion

Statute: 32 V.S.A. §5811(21)(B)(ii)Enacted: 2002; amended 2009, 2010Estimate: $8,544,200# Taxpayers: 22,730

Effective for tax years 2011 and after, taxpayers may reduce taxable income byup to $5,000 in adjusted net capital gain income or 40% adjusted net capital gainincome from the sale of certain business assets held for more than three years.As under prior law, the exclusion amount cannot exceed 40% of federal taxableincome.

PURPOSE The flat capital gains exclusion is to encourage savings and investment whileexempting a portion of the gain that may represent inflation. The 40% businesscapital gains exclusion mitigates the impact of one-time realizations in aprogressive tax structure.

1.100 Subtractions from Vermont Income Tax

1.101 Credit for Child and Dependent Care

Statute: 32 V.S.A. §5822(d)Enacted: 1967Estimate: $1,656,100# Taxpayers: 14,510

A taxpayer is entitled to a nonrefundable tax credit equal to 24% of the federalchild and dependent care credit applied against federal tax liability. A taxpayer

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may claim this credit or the low income child and dependent care credit, but notboth.

PURPOSE To provide tax relief to working taxpayers who must incur dependent careexpenses to stay in the workforce.

1.102 Credit for Elderly or Disabled

Statute: 32 V.S.A. §5822(d)Enacted: 1967Estimate: $2,700# Taxpayers: 90

A taxpayer is entitled to a nonrefundable tax credit equal to 24% of the federalcredit available to the elderly (age 65 or older) and permanently disabled, whichwas applied against federal tax liability.

PURPOSE To provide tax relief for seniors and persons who are disabled with little tax-exempt retirement or disability income.

1.103 Investment Tax Credit

Statute: 32 V.S.A. §5822(d)Enacted: 1967Estimate: $886,000# Taxpayers: 90

A taxpayer is entitled to a nonrefundable tax credit equal to 24% of the federalinvestment tax credit applied against federal tax liability for Vermont-propertyinvestment in the following activities: rehabilitation (IRC §47), energy (IRC§48(a)), advanced coal products (IRC §48(a)), and gasification products (IRC48B(e)).

PURPOSE To encourage Vermont business investments.

1.104 Vermont Farm Income Averaging Credit

Statute: 32 V.S.A. §5822(c)(2)Enacted: 2002Estimate: $48,500# Taxpayers: 150

A nonrefundable tax credit is available in the amount of 24% of the reduction inthe taxpayer’s federal tax liability due to farm income averaging.

PURPOSE To mitigate the adverse tax consequences of fluctuating farm incomes under aprogressive tax structure.

1.105 Vermont Business Solar Energy Credit

Statute: 32 V.S.A. §§5822(d); 5930z

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Enacted: 2002Estimate: $2,387,600# Taxpayers: 30

A taxpayer is entitled to a nonrefundable tax credit of 76% of the Vermont-property portion of the business solar energy tax credit component of the federalinvestment tax credit applied against the taxpayer’s federal tax liability. Unusedcredits may be carried forward for five years. This credit in combination with the24% Investment Tax Credit provides a total credit of 100% of the amount of thefederal business solar energy credit.

PURPOSE To provide a temporary, enhanced incentive for business solar investmentslocated in Vermont.

1.200 Adjustments to Vermont Income Tax

1.201 Military Pay

Statute: 32 V.S.A. §5823(a)(2) & (b)(3)Enacted: 1966Estimate: $2,229,700# Taxpayers: 1,700

Exempts all military pay for full-time active duty earned outside Vermont. Thisalso exempts the first $2,000 of military pay earned for commander certified unittraining in Vermont for National Guard or United States Reserve personnel whohave a federal AGI under $50,000. Exemption also applies to funds receivedthrough the federal armed forces educational loan repayment program, but onlyto funds included in the taxpayer’s AGI for the taxable year.

PURPOSE To provide additional compensation for military personnel for service to thecountry.

1.202 Federal Employment Opportunity Income

Statute: 32 V.S.A. §5823(a)(5)Enacted: 1979Estimate: $33,100# Taxpayers: 60

Exempts income related to wages and salaries not taken as a federalemployment credit and included in federal AGI pursuant to IRC 280C. Alsoexempts income included in federal AGI related to expenses incurred but notcovered by the Americans with Disabilities Credit (IRC 44).

PURPOSE To reduce the taxation of people receive federal employment opportunity incomeand reduce the cost to government of providing this assistance.

1.204 Interest Income from VSAC bonds, Vermont Telecommunications Authoritybonds and notes, and federal Build America bonds

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Statute: 16 V.S.A. §2825; 30 V.S.A. §8074Enacted: 1965; 2007Estimate: $1,366,800# Taxpayers: 340

Exemption applies to interest and income from these sources when included in ataxpayer’s federal AGI.

PURPOSE To encourage investment in bonds supporting Vermont projects.

1.300 Vermont Tax Credits Applied after Income Adjustment

1.301 Charitable Housing Credit

Statute: 32 V.S.A. §5830cEnacted: 1990Estimate: $18,360# Taxpayers: 50

Vermont taxpayers who make an authorized charitable investment in an eligiblehousing charity are entitled to a nonrefundable credit in the amount equal to thedifference between the net income that would have been received at thecharitable threshold rate and the actual net income received by, or credited to,the taxpayer. The credit cannot exceed 3% of the average outstanding principalbalance of the investment during the taxable year. Unused credits may be carriedforward for three years.

PURPOSE To encourage investment in housing in Vermont.

1.302 Affordable Housing Credit

Statute: 32 V.S.A. §5930uEnacted: 2000Estimate: $0# Taxpayers: 0

A nonrefundable tax credit may be taken for an affordable rental housing projector owner-occupied affordable housing units, provided the project has beenauthorized by the Vermont Housing Finance Agency. The amount of the credit isbased on a taxpayer’s eligible cash contribution and the agency’s allocation plan.Total tax credits available to the taxpayer are the amount of the first-yearallocation plus the succeeding four years’ deemed allocation. (These credits aretaken almost exclusively against bank franchise tax and insurance premiumstax.)

PURPOSE To encourage the investment in and development of affordable housing inVermont.

1.303 Qualified Sale of Mobile Home Park Credit

Statute: 32 V.S.A. §5828

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Enacted: 1998Estimate: $0# Taxpayers: 0

The taxpayer is entitled to a nonrefundable credit worth 7% of the taxpayer’s gainfrom the sale of a mobile home park. This is measured by the gain subject tofederal income tax. Unused credits may be carried forward for three years.

PURPOSE To encourage sales of mobile home parks as an alternative to closure.

1.304 Vermont Higher Education Investment Credit

Statute: 32 V.S.A. §5825aEnacted: 2003 (revised in 2007)Estimate: $1,396,300# Taxpayers: 2,690

A taxpayer, including each spouse filing a joint return, is entitled to anonrefundable credit of 10% for the first $2,500 contributed for each beneficiaryto a Vermont higher education investment plan account. A recipient of this creditis subject to a 10% repayment for any distribution not excluded from federal AGI,up to a maximum of the total credits received.

PURPOSE To encourage savings in Vermont 529 plans and lower the cost of highereducation for taxpayers.

1.305 Entrepreneurs’ Seed Capital Fund Credit

Statute: 32 V.S.A. §5830bEnacted: 2004Estimate: $0# Taxpayers: 0

A taxpayer who contributes to the Seed Capital Fund may claim a nonrefundablecredit equal to the lesser of either 4% of the taxpayer’s contribution or 50% of thetaxpayer’s tax liability for the year prior to claiming the credit, provided that theaggregate credit allowable for all taxable years not exceed 20% of the taxpayer’scontribution to the initial capitalization of the fund. Unused credits may be carriedforward for four years.

PURPOSE To provide an incentive for investment in small businesses in Vermont.

1.306 Historic Rehabilitation Tax Credit

Statute: 32 V.S.A. §5930cc(a); see §5930aa – 3930ffEnacted: 2006Estimate: $0# Taxpayers: 0

A taxpayer who is deemed qualified by the Vermont Downtown DevelopmentBoard and completes a qualified historic rehabilitation project may claim a

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nonrefundable credit of 10% of those qualified rehabilitation expenditures.Unused credits may be carried forward for nine years. (A substantial number ofthese credits are taken against bank franchise tax.)

PURPOSE To provide incentives to improve and rehabilitate historic properties in designeddowntowns and village centers.

1.307 Façade Improvement Tax Credit

Statute: 32 V.S.A. §5930cc(b); see §5930aa – 5930ffEnacted: 2006Estimate: $0# Taxpayers: 0

Taxpayers are eligible for a nonrefundable credit equal to 25% of expendituresup to $25,000 on a qualified façade improvement project, as approved by theVermont Downtown Development Board. Unused credits may be carried forwardfor nine years. (A substantial number of these credits are taken against bankfranchise tax.)

PURPOSE To provide incentives to improve facades and rehabilitate historic properties indesigned downtowns and village center.

1.308 Code Improvement Tax Credit

Statute: 32 V.S.A. §5930cc(c); see §5930aa – 5930ffEnacted: 2006Estimate: $24,100# Taxpayers: Under 10

Taxpayers are eligible for a nonrefundable credit equal to 50% of costs forqualified code improvement or installation projects, up to the following limits:$12,000 for a platform lift, $50,000 for an elevator or sprinkler system, and$25,000 for combined costs of all other code improvement and installationprojects, as approved by the Vermont Downtown Development Board. Unusedcredits may be carried forward for nine years. (A substantial number of thesecredits are taken against bank franchise tax.)

PURPOSE To provide incentives to improve and rehabilitate historic properties in designeddowntowns and village centers by making code improvements.

1.309 Research and Development Tax Credit

Statute: 32 V.S.A. §5930iiEnacted: 2009Estimate: N.A.# Taxpayers: N.A.

A taxpayer is eligible for a nonrefundable credit equal to 30% of the amount ofthe federal tax credit for eligible R&D expenditures made within Vermont. Unused

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credits may be carried forward for ten years. The credit takes effect for eligibleexpenditures made on or after January 1, 2011.

PURPOSE To encourage business investment in research and development within Vermont.

1.310 Wood Products Manufacture Tax Credit

Statute: 32 V.S.A. §5930yEnacted: 2005Estimate: $26,200# Taxpayers: Under 10

A credit of 2% of the wages paid in the taxable year by an employer for servicesperformed in the designated counties having at least 5% of their combined jobsprovided by employers that manufacture finished wood products and having thehighest combined unemployment rate in the state for at least one month in theprevious calendar year.

PURPOSE To lower income taxes for businesses in the northeast kingdom counties ofEssex and Caledonia in order retain employees in wood products manufacturing.

1.311 EATI Tax Credits (carry-forward only)

Statute: 32 V.S.A. §5930a2Enacted: 1997; repealed 2006Estimate: $232,000# Taxpayers: 20

A suite of tax credits based on payroll increases, research and developmentinvestment, workforce development expenditures, or capital investments infacilities and machinery or equipment, and sales of product shipped out of state.The final taxable year in which credits can be earned is 2010; the last year carry-forward credits can be claimed is 2015.

PURPOSE To provide incentives to businesses creating new jobs in Vermont.

1.312 Downtown Tax Credits (carry-forward only)

Statute: 32 V.S.A. §§5930n-5930rEnacted: 1998, 2002, repealed 2006Estimate: $188,900# Taxpayers: Under 10

Four tax credits designed to assist with rehabilitation and code improvements forolder and historic buildings located within designated downtowns and villagecenters were replaced with three credits (§5930cc) to make the program easierto use and administer.

Credits allocated prior to July 1, 2006 remain subject to the associated statutoryprovisions but must be claimed by May 24, 2011.

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1.400 Refundable Credits

1.401 Low Income Child and Dependent Care Credit

Statute: 32 V.S.A. §5828cEnacted: 2002Estimate: $57,500# Taxpayers: 430

A refundable credit is available for taxpayers with federal AGI under $30,000, iffiling individually, or $40,000, if married filing jointly. The credit is equal to 50% ofthe federal child and dependent care credit for child and dependent care servicesprocured in Vermont, so long as the facility providing these services has beencertified by the Agency of Human Services.

PURPOSE To provide additional cash relief to lower-income working taxpayers who incurdependent care expenses in certified centers to stay in the workforce.

1.402 Earned Income Tax Credit

Statute: 32 V.S.A. §5828bEnacted: 1988Estimate: $25,565,700# Taxpayers: 44,500

Any taxpayer entitled to a federal earned income tax credit may claim a VermontEITC in the amount of 32% of the federal credit, proportional to the percentage oftotal income that was earned or received in Vermont.

PURPOSE To increase the after-tax income of low-income working families and individualsand to provide an incentive to work for those with little earned income.

LIST OF FISCAL YEAR 2011 CORPORATE INCOME TAX EXPENDITURES

2.000 Adjustments to Federal Taxable Income

2.001 Vermont Municipal Bond Income Exemption

Statute: 32 V.S.A. §5811(21)(A)(i)Enacted: 1986Estimate: Data unavailable# Taxpayers: Data unavailable

Interest income from Vermont state and local government obligations is exemptfrom taxation in Vermont. However, interest income from non-Vermont state andlocal obligations is added to the amount of federal taxable income.

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PURPOSE To encourage investment in Vermont state and local bonds and maintain thestate’s favorable bond rating.

2.100 Vermont Tax Credits


Statute: 32 V.S.A. §5830cEnacted: 1990Estimate: $0# Taxpayers: 0

Vermont taxpayers who make an authorized charitable investment in an eligiblehousing charity are entitled to a nonrefundable credit in the amount equal to thedifference between the net income that would have been received at thecharitable threshold rate and the actual net income received by, or credited to,the taxpayer. The credit cannot exceed 3% of the average outstanding principalbalance of the investment during the taxable year. Unused credits may be carriedforward for three years.



Statute: 32 V.S.A. §5930uEnacted: 2000Estimate: $144,800# Taxpayers: Under 10

A nonrefundable tax credit may be taken for an affordable rental housing projector owner-occupied affordable housing units, provided the project has beenauthorized by the Vermont Housing Finance Agency. The amount of the credit isbased on a taxpayer’s eligible cash contribution and the agency’s allocation plan.Total tax credits available to the taxpayer are the amount of the first-yearallocation plus the succeeding four years’ deemed allocation. (These credits aretaken almost exclusively against bank franchise tax and insurance premiumstax.)

PURPOSE To encourage the investment and development of affordable housing in Vermont.

2.103 Qualified Sale of Mobile Home Park Credit

Statute: 32 V.S.A. §5828Enacted: 1998Estimate: $0# Taxpayers: 0

The taxpayer is entitled to a nonrefundable credit worth 7% of the taxpayers gainfrom the sale of a mobile home park. This is measured by the gain subject tofederal income tax. Unused credits may be carried forward for three years.

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PURPOSE To encourage sales of mobile home parks as an alternative to closure.

2.104 Wood Products Manufacture Tax Credit

Statute: 32 V.S.A. §5930yEnacted: 2005Estimate: $0# Taxpayers: Under 10

A credit of 2% of the wages paid in the taxable year by an employer for servicesperformed in the designated counties having at least 5% of their combined jobsprovided by employers that manufacture finished wood products and having thehighest combined unemployment rate in the state for at least one month in theprevious calendar year.

PURPOSE To lower income taxes for businesses in the northeast kingdom counties ofEssex and Caledonia in order retain employees in wood products manufacturing.

2.105 Historic Rehabilitation Tax Credit

Statute: 32 V.S.A. §5930cc(a); see §§5930aa - 5930ffEnacted: 2006Estimate: $0# Taxpayers: 0

Credit equals 10% of qualified rehabilitation expenditures as defined in the IRC26 U.S.C. § 47(c).


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2.106 Façade Improvement Tax Credit

Statute: 32 V.S.A. 5930cc(b); see §§5930aa - 5930ffEnacted: 2006Estimate: $0# Taxpayers: 0

Credit equals 25% of qualified expenditures for façade improvements, up to amaximum amount of $25,000.

PURPOSE To provide incentives to improve facades and rehabilitate historic properties indesigned downtowns and village center.

2.107 Code Improvement Tax Credit

Statute: 32 V.S.A. 5930cc(c); see §§5930aa - 5930ffEnacted: 2006Estimate: $0# Taxpayers: 0

A qualified applicant is eligible for a tax credit of 50% for qualified expendituresup to a maximum of $12,000 for installation or improvement of a platform lift, amaximum tax credit of $50,000 for installation or improvement of a sprinklersystem, and a maximum tax credit of $25,000 for the combined costs of all otherqualified code improvements.

PURPOSE To provide incentives to improve and rehabilitate historic properties in designeddowntowns and village centers by making code improvements.

2.108 Business Solar Energy Tax Credit

Statute: 32 V.S.A. §5930zEnacted: 2008Estimate: $168,000# Taxpayers: Under 10

A taxpayer is entitled to a 100% credit for the Vermont-property portion of thebusiness solar energy tax credit component of the federal investment tax creditapplied against the taxpayer’s federal tax liability. Unused credits may be carriedforward for five years.

PURPOSE To provide a temporary, enhanced incentive for business solar investmentslocated in Vermont.

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2.109 Machinery and Equipment Tax Credit

Statute: 32 V.S.A. §5930llEnacted: 2010Estimate: N.A.# Taxpayers: N.A

A qualified taxpayer approved by VEPC for a machinery and equipmentinvestment tax credit certification is entitled to a nonrefundable credit in anamount equal to 10% of the total qualified capital expenditures. The total amountof credit authorized by statute is $8 million, and may not exceed $1 million in anyone tax year. Applies to tax years beginning on January 1, 2012; repealedeffective June 1, 2026.

PURPOSE To provide an incentive to make a major, long-term capital investment inVermont-based plant and property to ensure the continuation of in-stateemployment.

2.110 Research and Development Tax Credit

Statute: 32 V.S.A. §5930iiEnacted: 2009Estimate: N.A.# Taxpayers: N.A.

A taxpayer is eligible for a nonrefundable credit equal to 30% of the amount ofthe federal tax credit for eligible R&D expenditures made within Vermont. Unusedcredits may be carried forward for ten years. The credit takes effect for eligibleexpenditures made on or after January 1, 2011.

PURPOSE To encourage business investment in research and development within Vermont.

2.111 EATI Tax Credits (carry-forward only)

Statute: 32 V.S.A. §5930aEnacted: 1997; repealed 2006Estimate: $1,628,200# Taxpayers: Under 10

A suite of tax credits based on payroll increases, research and developmentinvestment, workforce development expenditures, or capital investments infacilities and machinery or equipment, and sales of product shipped out of state.The final taxable year in which credits can be earned is 2010; the last year carryforward credits can be claimed is 2015.

PURPOSE To provide incentives to businesses creating new jobs in Vermont.

2.112 Downtown Tax Credits (carry-forward only)

Statute: 32 V.S.A. §§5930n-5930rEnacted: 1998, 2002, repealed 2006

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Estimate: $30,400# Taxpayers: Under 10

Four tax credits designed to assist with rehabilitation and code improvements forolder and historic buildings located within designated downtowns and villagecenters were replaced with three credits (§5930cc) to make the program easierto use and administer. Credits allocated prior to July 1, 2006 remain subject tothe associated statutory provisions but must be claimed by May 24, 2011.


OTHER EXPENDITURES FOR FISCAL YEAR 2011

2.200 Vermont Employment Growth Incentive (VEGI)

Statute: 32 V.S.A. §5930bEnacted: 2006Estimate: $602,190# Taxpayers: 13

Unlike other credits, deductions, or exemptions to personal income tax, the VEGIprogram provides a cash incentive, paid in installments, based on new, qualifiedjob and payroll creation in Vermont, to companies authorized by the VermontEconomic Progress Council (VEPC). VEGI was a newly designed non-creditincentive program that began in January 2007, replacing the EconomicAdvancement Tax Incentive program (EATI). The VEGI incentive amount isearned over a period of up to five years and paid out over a period of up to nineyears, provided the company maintains or increases base payroll and meets thenecessary targets. The claims process is unrelated to filing personal or businessincome taxes.

PURPOSE To provide a cash incentive to businesses that expand and create jobs inVermont.

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LIST OF FISCAL YEAR 2011 SALES TAX EXPENDITURES

3.000 Sales Not Covered; Transactions and Entities Not Taxed

3.001 Medical products

Statute: 32 V.S.A. §9741(2)Enacted: 1969 (amended in 2012)Estimate: $45,900,000

This exemption includes several categories of sales for items used in the“treatment intended to alleviate human suffering or to correct . . . human physicaldisabilities.” The exemption includes sales of both prescription and non-prescription drugs, supplies used for medical treatment, and durable medicalequipment that is either used directly by a patient, such as an oxygen system, orused in a hospital or clinic such as x-ray or magnetic resonance imagingsystems. The 2012 amendment includes nominally priced dental suppliesprovided to patients without charge under this exemption.

PURPOSE To allow for those in need of medical products and support the health andwelfare of Vermont residents.

Data source: Vermont Department of Financial Regulation, Vermont Health CareExpenditure Analysis & Three-Year Forecast

3.002 Agricultural inputs

Statute: 32 V.S.A. §9741(3)Enacted: 1969Estimate: $22,000,000

This exemption includes several categories of sales for items used in theproduction on farms of tangible personal property. The exemption applies to a listof specific items, including feed, seed, plants, baler twine, silage bags, sheets ofplastic for bunker covers or agricultural wrap, and breeding or other livestock.The exemption also includes pesticides, chemicals, and fertilizers but only whenused for agriculture.

PURPOSE To lessen the costs for the agricultural industry.

Data source: New England Agricultural Statistics, Farm Production Expenditures

3.003 Veterinary supplies


The same section of statute that includes agricultural inputs also exemptsveterinary supplies that apply in some cases to supplies used in the treatment of

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non-agricultural animals. The veterinary supplies exemption is intended only forthose items used in the treatment of animals at a veterinarian or for health-related items that are not otherwise available from non-veterinarian retailers.

PURPOSE To lessen the cost to the agricultural industry of veterinary services.

Data Sources: US Census Bureau and American Veterinarian MedicineAssociation

3.004 Non-business, casual sales

Statute: 32 V.S.A. §9741(4)Enacted: 1969Estimate: Data unavailable

Casual sales represent those sales made by individuals not normally in thebusiness of retail sales. This includes garage sales and sales betweenindividuals of single items such as those often seen in newspaper and electronicclassified advertisements.

PURPOSE This exemption has been in law since the inception of the tax to prevent theoccasional sale of personal property by individuals not engaged as merchantsfrom being subjected to the tax.

3.005 Fuels for railroads and boats


Railroads are exempt under Title 23 and the use of diesel fuel in boats is exemptunder the Title 32 exemption for other motor fuels. Non-dyed fuels for on-roadmotor vehicles are taxed under Title 23.

PURPOSE The use of railroads and boats typically do not necessitate the need for publicexpenditures on transportation infrastructure and, therefore, are exempt from asales tax burden on fuels.

3.006 Sales of Food


Food that is sold for consumption off the premises where it is sold, includinggroceries, is exempt from the sales tax. This exemption includes vitamins anddietary supplements.

PURPOSE To limit the taxes on the purchase of goods that are necessary for health andwelfare of Vermont residents.

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Data Source: Consumer Expenditure Survey

3.007 Exemption for manufacturers’ material and equipment

Statute: 32 V.S.A. §9741(14)Enacted: 1969 (amended in 2012)Estimate: $307,200,000

The manufacturers’ exemption includes both the materials incorporated andconsumed in the manufacture of tangible personal property and the equipmentused in the manufacturing process. The equipment exempt from sales taxincludes only that equipment that is used directly and exclusively in themanufacture of tangible personal property. The exemption does not apply tomaterials used in the construction of real property, even when included as a partof a manufacturing facility. Starting January 1, 2012, the manufacturers’exemption includes machinery that results in secondary packaging of tangiblepersonal property.

PURPOSE To avoid tax pyramiding on goods and encourage investments in equipment bymanufacturing entities.

Data Source: US Census Bureau, American Fact Finder

3.008 Newspapers

Statute: 32 V.S.A. §9741(15)Enacted: 1969; amended in 1980Estimate: $1,200,000

The sale of newspapers is exempt (including newspapers that are given awayand not sold) as are the materials used in the production of newspapers, such asnewsprint and ink.

PURPOSE To maintain the continued availability of printed news resources. / Or to protectfree speech?

Data source: US Census Bureau, Service Annual Survey

3.009 Packaging and shipping materials


Packages for the sale of retail items are not subject to sales tax to producers anddistributors. This includes containers, labels, and packing materials (such asbubble wrap or polystyrene fill). Shipping materials that may be reused are alsoeligible for this exemption. Reusable shipping materials include pallets and kegs.

PURPOSE To support industry and prevent tax pyramiding by excluding inputs into businessproduction and distribution.

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Data source: US Census Bureau, Survey of Business Expenses

3.010 Rented furniture for residential use


The rental of furniture for residences is exempt from sales tax. The use offurniture that is included in the rental of a furnished apartment is also exemptfrom tax.

PURPOSE To limit sales taxes on items that are not being sold and to avoid instances ofdouble taxation.

3.011 Admissions to municipal, state, and federal recreation facilities

Statute: 32 V.S.A. §9741(18)Enacted: 1970Estimate: $300,000

The admission fees for federal, state, or municipally owned recreation facilitiesare exempt from the sales tax on amusements. These facilities include publicbeaches and swimming pools, dock and mooring use, golf courses, andcampsites.

PURPOSE To exempt from tax a state charge for an entrance or admission.

Data sources: Agency of Natural Resources, sample survey of municipalrecreation departments, municipal published documents

3.012 Rentals of coin-operated washing facilities, including car washes


Laundry and car washing facilities that customers access through the use ofcoin-operated machinery are exempt from the sales tax on those coin-basedtransactions.

PURPOSE To exempt services from taxation.

Data source: Economic Census of Vermont

3.013 Admission fees to nonprofit museums


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The admission fees to museums operated by organizations with a federal taxexempt status are not subject to the sales tax.

PURPOSE To support the missions of non-profit facilities and encourage higher visitation.

Data source: Economic Census of Vermont

3.014 Items sold to fire, ambulance, and rescue squads


This exemption is provided to emergency responders as a particular set of usersfor equipment and supplies that might otherwise be taxable as tangible personalproperty. In addition, the materials and equipment used in the construction andrenovation of buildings and other real property housing the emergencyresponders are exempt when purchased by contractors.

PURPOSE To limit the tax on organizations charged with protecting the safety of the public

3.015 Funeral charges


This exemption includes the purchase of funeral furnishings that are necessaryincidents of a funeral, including caskets, vaults, and crematory urns. (Theexemption does not include items sold as an accommodation, such as flowers.)

PURPOSE To not tax the bereaved.

Data source: The value of caskets, vaults, and urns is estimated from dataprovided by the National Funeral Directors Association

3.016 Property used in commercial, industrial or agricultural research


Property purchased and used in commercial, industrial or agricultural research isexempt from the sales tax.

PURPOSE To reduce financial barriers to research and innovation in the commercial,industrial and agricultural industries.

3.017 Agricultural machinery and equipment

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The purchase of machinery and equipment used in the production of agriculturalgoods and livestock is exempt from the sales tax.

PURPOSE To support the agricultural industry and avoid tax pyramiding of agriculturalproducts.

Data source: New England Agricultural Statistics, Farm ProductionExpenditures

3.018 Energy purchases for a residence


Electricity, fuel oil, natural gas, propane, and other fuels are subject to tax astangible personal property. When these fuels are sold to residences, the fuelsupplier or utility is not required to collect the sales tax. A fuel gross receipts taxof 0.5% of the retail sale is applied to heating oil, kerosene, other dyed dieselfuels, natural gas, propane gas, electricity, and coal used to heat a residence orbusiness. (33 V.S.A. § 2503)

PURPOSE To limit the tax on the purchase of goods that are necessary for health andwelfare of Vermont residents.

Data source: Energy Information Administration

3.019 Energy purchases for farming


When electricity, fuel oil, natural gas, propane and other fuels sold to farmers, thefuel supplier or utility is not required to collect the sales tax.

PURPOSE To support the agricultural industry and avoid tax pyramiding of agriculturalproducts.

Data source: Energy Information Administration, Census of Agriculture

3.020 Sales of films to movie theaters


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Movie theaters that charge for admission do not need to pay sales tax on thepurchase or licensed use of films from film distributors.

PURPOSE To avoid tax on items that are normally not for permanent use within the state.

Data source: National Association of Theater Operators

3.021 Aircraft and depreciable parts for commercial use

Statute: 32 V.S.A. §9741(29)Enacted: 1986Estimate: Under $100,000

This exemption is for the purchase of aircraft that are used for commercial use,such as the transport of people and goods for compensation and hire. Theexemption also includes the purchase of parts and equipment used in themaintenance and repair of aircraft for commercial or private use.

PURPOSE To promote the growth of the aircraft maintenance industry in Vermont.

Data source: Joint Fiscal Office

3.022 Railroad rolling stock and depreciable parts


This exemption includes the purchase of railroad locomotives and cars and theparts and equipment used in their maintenance.

PURPOSE To support the railroad industry and interstate transportation.

Data source: Division of Property Valuation and Review

3.023 Ferryboats and depreciable parts


This exemption includes the purchase of ferries used in the transport of peopleand property for compensation or hire, and the parts and equipment used in theirmaintenance.

PURPOSE To support ferryboat services and interstate transportation.

Data source: History of Lake Champlain Ferries 1947–2005.

3.024 Sales of mobile homes and modular housing

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Forty percent of the sales price of a new mobile home or manufactured home isexempt from the sales tax (the remaining 60% is subject to the sales tax). In thecase of a used mobile home or manufactured home when sold as real estate,there is no sales tax. Real estate transactions are subject to the property transfertax.

PURPOSE To create equity between mobile/modular housing and traditional residentialconstruction by providing and exemption for the estimated portion of the costattributable to labor (versus materials).

3.025 U.S. flag sold to or by exempt veterans' organizations


U.S. flags purchased or sold by exempt veteran’s organizations are exempt fromthe sales tax.

PURPOSE To support veteran’s organizations in performing their patriotic function.

3.026 Energy used in manufacturing tangible personal property for sale


Data source: Energy Information Administration

Electricity, fuel oil, natural gas, propane, and other fuels are subject to taxas tangible personal property. When these fuels are sold for use inmanufacturing, the fuel supplier or utility is not required to collect the sales tax.

PURPOSE To avoid the taxation of manufacturing inputs and the pyramiding of taxes ongoods produced in state.

3.027 Property transferred as part of personal service transaction or transfer ofintangible property rights


Transactions that focus on the sale of personal services such as bookkeeping orhair styling or the transfer of intangible property, such as stocks or marketinglogos, may also require the transfer of tangible property. The transaction is

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exempt from sales tax as long as the value of the tangible personal propertytransferred is less than 10% of the sales price for the complete transaction.

PURPOSE To exempt tangible personal property that is a small portion of a service.

3.028 Advertising materials


Transactions that transfer the right to use advertising materials are exempt fromsales tax. Such transactions may include the transfer of a single copy ofadvertising materials to the purchasing customer.

PURPOSE To exempt tangible personal property if it is a small portion of a larger service.

3.029 Documents that record a professional service


Bills, invoices, briefs, agreements, and wills are examples of documents that maybe provided to customers without the payment of the sales tax on the price of thetransaction.

PURPOSE To exempt tangible personal property if it is a small portion of a service package.

3.030 Tracked vehicles


The sale of tracked vehicles is subject to the sales tax. The exemption applies onsales that would otherwise result in a tax paid above a capped amount. The capis required by law to be adjusted by the CPI as of July 1 in each even-numberedyear. The cap was $1,200 in FY 2011 and $1,260 in FY 2012.

PURPOSE To limit the sales tax on tracked vehicles (i.e. construction vehicles such asbulldozers) and lessen the cost of capital investments of those purchases.

3.031 Sales of building materials

Statute: 32 V.S.A. §9741(39)(i) and (ii)Enacted: 1997Estimate: Under $100,000

Sales of building materials within any three consecutive years in excess of$250,000 in purchase value and incorporated into a downtown redevelopment

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project, as defined by the Department of Economic, Housing, and CommunityDevelopment.

PURPOSE To encourage the restoration and revitalization of downtown districts.

Data source: Vermont Economic Progress Council

3.032 Wholesale transactions between telecommunications service providers


The sale of telecommunication services from one provider to anothertelecommunications provider is exempt from the sales tax.

PURPOSE To promote the telecommunications industry by avoiding taxation of the inputsand intercompany transactions.

3.033 Scrap construction materials by a third party


Scrap construction materials generated during construction or demolition are notsubject to sales tax if a third party takes possession of the material with nopayment and then either uses the material in construction.

PURPOSE To promote the reuse and recycling of scrap construction materials.

3.034 Property incorporated in railroad line


Materials used in the construction, repair, operation, or maintenance of railroadlines are exempt from the sales tax.

PURPOSE To support the railroad industry and encourage ongoing investments withinVermont.

3.035 Clothing and footwear

Statute: 32 V.S.A. §9741(45)Enacted: 1999; all clothing and footwear exempt January 1, 2007Estimate: $24,900,000

Clothing, including footwear, is exempt from the sales tax. Accessories andprotective equipment are not exempt.

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PURPOSE To limit the tax burden on the purchase of goods that are necessary for thehealth and welfare of all Vermont residents.

Data source: Bureau of Labor Statistics, Consumer Expenditure Survey, andUS Census Bureau

3.036 Property incorporated into a net metering system, an on-premise energy systemnot connected to the electric distribution system, or a solar hot water heatingsystem


Property incorporated into photovoltaic systems that are not covered by themanufacturing exemption is exempt under this specific subsection of statute. Inaddition, solar equipment for heating water is exempt.

PURPOSE To encourage the promulgation of efficient technologies for generating anddistributing renewable energy resources.

Data Source: Vermont Public Service Board

3.037 Purchases by and limited purchases from 501(c)(3) organizations

Statute: 32 V.S.A. §9743(3)Enacted: 1969, amendedEstimate: Data unavailable

Nonprofit organizations purchases are exempt from the sales tax. Some sales bychurches, schools, and other organizations are also exempt to a $20,000 limit.These sales include garage sales and sporting equipment swap sales. Chargesfor entertainment sponsored by nonprofits also have a limited exemption.

PURPOSE To reduce costs for nonprofit organizations.

3.038 Building materials and supplies used in construction or, repair of buildings bygovernmental bodies or 501(c)(3) organizations or development corporations


This exemption includes the materials used for most public works projects as wellas the construction of structures for nonprofit organizations.

PURPOSE To reduce the costs of construction for nonprofit organizations.

3.039 Amusement charges for 4 events a year for 501(c)(4)-(13) and (19) organizationsand political organizations

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This exemption is limited to 4 events (e.g., musical or theatrical presentations) ayear for 501(c)(4)-(13) and (19) organizations and political organizations. Theexemption was expanded in 2010 to include amusement charges for eventswhere the risk is shared with for-profit promoters and presenters.

PURPOSE To reduce the costs for and encourage participation in a limited number of eventsorganized by nonprofit organizations.

3.040 Amusement charges for events presented by 501(c)(3) organizations

Statute: 32 V.S.A. §9743(7)Enacted: 1983 (amended 2010)Estimate: Data unavailable

Nonprofit organizations under IRC 501(c)(3) may charge for live performanceswithout collecting sales tax but only if their proceeds from the past year’s eventsdo not exceed $100,000.

PURPOSE To reduce the costs for and encourage participation in fundraising eventsorganized by nonprofit organizations

3.041 Limitation of tax on telecommunications services

Statute: 32 V.S.A. §9771aEnacted: 1997Estimate: Under $100,000

No single customer is subject to a sales tax greater than $10,000 in any onecalendar year.

Data source: Department of Taxes

PURPOSE To limit the taxes on telecommunications intensive businesses.

3.042 Reallocation of receipts from tax imposed on sales of construction materials

Statute: 32 V.S.A. §9819Enacted: 1998Estimate: Under $100,000

The sales tax revenues from materials used in construction of qualified projectsin designated downtown districts above certain amounts (varying by the size ofthe community) are allocated to the municipalities that are the location of thoseprojects.

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PURPOSE To promote the restoration and/or revitalization of downtown districts withinVermont.


3.043 Sales to nonprofit hospital service corporations

Statute: 8 V.S.A. §4518Enacted: 1947Estimate: Data unavailable

Nonprofit hospital service corporations are exempt from the sales and use tax.

PURPOSE To exempt nonprofit hospitals providing health care services.

3.044 Sales to nonprofit medical service corporations


Nonprofit medical service corporations are exempt from the sales and use tax.

PURPOSE To exempt a nonprofit entity providing medical insurance coverage.

3.045 Sales to credit unions


Credit unions are exempt from the sales and use tax.

PURPOSE To lessen the taxes on financial institutions that provide banking to underservedpopulations.

3.046 Sales by licensed auctioneers


Sales of tangible personal property are exempt from the sales tax when sold byan auctioneer and the auction is conducted on the premises of the owner of theproperty.

PURPOSE To extend the “casual sale” exemption to parallel situations involving anauctioneer.

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3.047 Licensed use of prewritten software from remote servers

Statute: 2012 Act 143, Section 52Enacted: 2012 for the period from January 1, 2007 until June 30, 2013.Estimate: $0 (refunds for taxes paid issued in FY 2012)

The Department of Taxes provided refunds for the purchase of the license to usesoftware remotely accessed. Refunds for taxes paid were issued in FY 2012 andFY 2013. The exemption sunsets in FY 2014.


PURPOSE To provide a temporary exemption to businesses and consumers whileclarifying and drafting the rules for this relatively new model for providingsoftware.

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LIST OF FISCAL YEAR 2011 MEALS AND ROOMS TAX EXPENDITURES

4.000 Meals and Alcoholic Beverage Tax

4.001 Grocery-type items furnished for take-out (meals tax only)

Statute: 32 V.S.A. §9202(10)(D)(i)Enacted: 1959Estimate: $6,200,000

Most food purchased from a grocery store is not subject to the meals tax. Thisexemption is for prepared food but still intended for home use and includeswhole pies, cakes, and loaves of bread, single-serving bakery items sold inquantities of three or more, deli and candy sales by weight, whole uncookedpizzas, and larger containers of ice cream, salad dressings, sauces, cider, ormilk.

PURPOSE To exempt from tax the purchase of goods that are necessary for the health andwelfare of all Vermont residents.

Data source: Economic Census of Vermont, Consumer Expenditure Survey

4.002 Served or furnished on the premises of a nonprofit

Statute: 32 V.S.A. §9202(10)(D)(ii)(I)Enacted: 1959Estimate: Data unavailable

Nonprofit organizations may sell meals without a meals tax when those mealsare sold on the premises and further the purpose of the organization. Theprofits from meals sold under this exemption must also be used exclusively for thenonprofit organization.


4.003 Premises of a school

Statute: 32 V.S.A. §9202(10)(D)(ii)(II)Enacted: 1959Estimate: $2,200,000

Schools may sell meals on their own grounds without collecting the mealstax. Contractors may sell meals to school students and staff under thisexemption, but restaurants and caterers otherwise subject to the tax may not

deliver meals to the schools without collecting the tax.

PURPOSE To reduce the overall costs of education in Vermont.

Data source: Vermont Department of Education

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4.004 Premises of Vermont or federal institutions where meals are provided toinmates and employees

Statute: 32 V.S.A. §9202(10)(D)(ii)(III)Enacted: 1959Estimate: $200,000

Meals provided at state or federal institutions are not subject to the meals tax.

PURPOSE To prevent the taxation of entities that are funded by taxpayers.

Data source: Vermont Department of Corrections

4.005 Hospitals, convalescent and nursing homes

Statute: 32 V.S.A. §9202(10)(D)(ii)(IV)Enacted: 1959Estimate: $1,000,000

Meals provided at locations that have a primary purpose for delivering healthcare or hospice care are not subject to the meals tax.

PURPOSE To reduce the overall costs of health care and senior care in Vermont.

Data source: Vermont Inpatient Hospital Utilization Report

4.006 Furnished while transporting passengers for hire on train, bus, or airplane(carriers)

Statute: 32 V.S.A. §9202(10)(D)(ii)(V)Enacted: 1959Estimate: Data unavailable

Meals provided to passengers in transit delivered by carrier-for-feebusinesses are not subject to the meals tax.

PURPOSE To reduce the administrative costs for transit companies providing interstatetravel services.

4.007 Summer camp for children

Statute: 32 V.S.A. §9202(10)(D)(ii)(VI)Enacted: 1959Estimate: Under $100,000

Meals provided at camps serving children are not subject to the meals tax.

PURPOSE To promote Vermont outdoor education for youth.

Data source: www.vermontcamps.org

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4.008 Nonprofits at fairs, bazaars, picnics, and similar events, but limited to 4 days

Statute: 32 V.S.A. §9202(10)(D)(ii)(VII)Enacted: 1964Estimate: Data unavailable

Nonprofit organizations may provide meals at public events withoutcollecting the meals tax, but only for four calendar days during any given year.


4.009 Furnished to an employee of a hotel or restaurant operator as remunerationfor his or her employment

Statute: 32 V.S.A. §9202(10)(D)(ii)(VIII)Enacted: 1963Estimate: Data unavailable

Meals provided to employees as a part of their compensation are not subjectto the meals tax.

PURPOSE To avoid the taxation of in kind benefits.

4.010 Provided to the elderly pursuant to the Older Americans Act

Statute: 32 V.S.A. §9202(10)(D)(ii)(IX)Enacted: 1973Estimate: $600,000

Meals delivered to the home of eligible elderly individuals and funded by thefederal Older Americans Act Nutrition Program are not subject to the meals tax.

PURPOSE To exempt from tax government provided meals.

Data source: Vermont Department of Disabilities, Aging, and IndependentLiving

4.011 Purchased with Food Stamps

Statute: 32 V.S.A. §9202(10)(D)(ii)(X)Enacted: 1987Estimate: $200,000

A limited list of restaurant meals is eligible to be paid for with food stamps. Thepurchase of these meals with food stamps is not subject to the meals tax. Thisrepresents only a small portion (about 2%) of the overall sales of food underthe food stamp program.

PURPOSE To exempt from tax meals paid for with government funds.

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Data source: United States Department of Agriculture

4.012 Served on the premises of a continuing care retirement community

Statute: 32 V.S.A. §9202(10)(D)(ii)(XI)Enacted: 1988Estimate: Data unavailable

Meals provided at continuing care retirement communities are not subjectto the meals tax.

PURPOSE To exempt from tax meals prepared in a person’s home.

4.013 Meals provided for nonprofit hospital service corporations


Nonprofit hospital service corporations are exempt from the meals and roomstax.

PURPOSE To exempt meals provided as part of a hospital/health care service.

4.014 Meals provided for nonprofit medical service corporations


Nonprofit medical service corporations are exempt from the meals and roomstax.

PURPOSE To exclude meals provided by nonprofit health insurance companies.

4.015 Meals provided for credit unions


Credit unions are exempt from the meals and rooms tax.

PURPOSE To lessen the taxes on financial institutions that provide banking to under-servedpopulations.

4.100 Rooms Tax

4.101 Time share rights

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Owners of time share properties are not subject to the rooms tax for thepayment of time share rights at purchase.

PURPOSE To avoid double taxation on holdings that are subject to property taxes.

4.102 Student housing


The rental charges to students attending a school are not subject to the roomstax.

PURPOSE To accomodations that are part of education.

4.103 Permanent residents

Statute: 32 V.S.A. §9202(6) and (7).Enacted: 1959Estimate: Data unavailable

The rental charges to individuals that occupy a room in a hotel for at least 30days are not subject to the rooms tax.

PURPOSE To treat long-term hotel guests as permanent residents of the state for purposesof administrating the rooms tax.

4.104 Furnished to an employee of a hotel or restaurant operator as remunerationfor his or her employment


Workers residing in a hotel are not subject to the rooms tax when theaccommodation is provided as compensation for employment.

PURPOSE To exclude the taxation of in kind benefits.

4.105 Summer camp for children


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Overnight accommodations at camps serving children are not subject to therooms tax.

PURPOSE To promote Vermont outdoor education for youth.

Data source: www.vermontcamps.org

4.106 Hospital, sanatorium, convalescent home, nursing home, or home for the aged

Statute: 32 V.S.A. §9202(3)(A)Enacted: 1959Estimate: Data unavailable

The room charges to occupy a hospital or other institution providing healthcare are not subject to the rooms tax.

PURPOSE To exclude rooms that are a person’s residence.

4.107 State or US-operated establishment

Statute: 32 V.S.A. §9202(3)(B)Enacted: 1959Estimate: Data unavailable

Rooms available from establishments operated by the state or federalgovernment are not subject to the rooms tax. This exemption does not extend

to recreational facilities operated by the Department of Forests, Parks andRecreation.

PURPOSE To abide by requirement that states will not tax the federal government and toavoid the instance of the state taxing itself.

4.108 Rooms on the premises of a nonprofit

Statute: 32 V.S.A. §9202(3)(C)Enacted: 1959Estimate: Data unavailable

Nonprofits operating hotels to further their exempt purpose are exempt fromcollecting the rooms tax.


4.109 Rooms on the premises of a continuing care retirement community

Statute: 32 V.S.A. §9202(3)(D)Enacted: 1988Estimate: Data unavailable

A continuing care community is exempt from collecting the rooms tax on therent of its accommodations.

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PURPOSE To exclude rooms that are a person’s residence.

4.110 Rooms provided to nonprofit hospital service corporations

Statute: 8 V.S.A. §4518Enacted: 1947Estimate: Less than $100,000

Nonprofit hospital service corporations are exempt from the meals and roomstax.

PURPOSE To exclude rooms that are a part of a medical service.

4.111 Room provided to nonprofit medical service corporations

Statute: 8 V.S.A. § 4590Enacted: 1947Estimate: Less than $100,000

Nonprofit medical service corporations are exempt from the meals and roomstax.


4.112 Rooms provided to credit unions

Statute: 8 V.S.A. § 30901Enacted: 1967Estimate: Less than $100,000

Credit unions are exempt from the meals and rooms tax.

PURPOSE To lessen the taxes on financial institutions that provide banking to under-servedpopulations.

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LIST OF FISCAL YEAR 2011 PROPERTY TAX EXPENDITURES

5.000 Property Tax Exemptions

5.001 Nonprofit Medical Service Corporations

Statute: 8 V.S.A. §4518 and §4590Enacted: 1939Estimate: $132,000# of parcels: 1

One nonprofit medical service corporation qualifies for this exemption.

PURPOSE To exempt non profit companies that provide health care insurance coverage.

5.002 Local Development Corporations

Statute: 10 V.S.A. § 236Enacted: 1973Estimate: $100,000# of parcels: 33

Unoccupied portions of buildings and industrial parks owned by localdevelopment authorities are exempt.

PURPOSE To exempt government funded entities and promote economic development.

5.003 Vermont Housing Finance Agency

Statute: 10 V.S.A. § 641 (a)Enacted: 1973Estimate: $63,000# of parcels: 20

All property of the agency is public property and exempt from all taxes.

PURPOSE To exempt quasi government entities that provide and promote affordablehousing.

5.004 Vermont State Colleges

Statute: 16 V.S.A. § 2178Enacted: 1961; amended 2005.Estimate: $1,304,000# of parcels: 27

Property used for educational and not commercial purposes is exempt.

PURPOSE To exempt entities receiving government funding and provide higher education.

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5.005 University of Vermont

Statute: 16A APPX V.S.A. § 1-15Enacted: 1802Estimate: $10,064,000# of parcels: 145

Property used for educational purposes is exempt.

PURPOSE To exempt entities receiving government funding and provide higher education.

5.006 Libraries

Statute: 22 V.S.A. § 109Enacted: prior to 1947Estimate: $911,000# of parcels: 146

If the institution is a free and public library, the library and other property isforever exempt.

PURPOSE To exempt libraries that offer free and public access to information and researchresources.

5.007 Housing Authorities

Statute: 24 V.S.A. § 4020Enacted: 1961Estimate: $1,322,000# of parcels: 56

The property of a housing authority is declared public property and is exempt.

PURPOSE To exempt quasi government entities that provide and promote affordablehousing.

5.008 Federal and State Government Property

Statute: 32 V.S.A. § 3802(1)Enacted: some version of this exemption existed when Vermont became aState in 1791; it was last amended in 1977 when the last clause (regardingrepossessed or voluntarily conveyed housing) was addedEstimate: $3,390,000 (federal); and $4,079,000 (state)# of parcels: 444 (federal); 355 (state)

This includes Agency of Natural Resources-owned land and state-ownedbuildings for which PILOT (payment in lieu of taxes) payments are made. Some

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federal land, including the Green Mountain National Forest, is not included in thisestimate.

PURPOSE States are prohibited from taxing the federal government. The state exemption isto prevent government from taxing itself.

5.009 Congressionally Chartered Organizations

Statute: 32 V.S.A. § 3802(2)Enacted: 1957Estimate: $555,000# of parcels: 111

Congress issued federal charters from 1791 until 1992 and over 100organizations have this status. Congress does not oversee or superviseorganizations with the charter, and the designation was largely honorific.Congress suspended federal charters because of the unmerited publicassumption that the charter signifies federal approval of the organization’sactivities. (CRS Report, April 8, 2004)

There are two main groups of congressionally chartered organizations, includingveterans, fraternal or patriotic groups such as the American Red Cross, NationalAcademy of Sciences, or Girl and Boy Scouts, and corporate entities such as theFederal Reserve Bank, Fannie Mae, Freddie Mac, and the Tennessee ValleyAuthority.

PURPOSE To exempt organizations providing civic services.

5.010 Public, pious, and charitable property

Statute: 32 V.S.A. §§3802(4) 3832, 3840, 5404(a)Enacted: Some version of § 3802(4) existed when Vermont became a

State in 1791; a version of §3832 was enacted in 1880Estimate: $44,006,000# of parcels: 2,272

Subdivision 3802(4) exemptions are grouped together because municipalities areonly required to report the statutory reference and not differentiate between thevarious exemption types.

PURPOSE To exempt entities that provide religious, charitable, civic or public services.

5.011 College fraternities and societies

Statute: 32 V.S.A. §3802(5) (Note: this exemption is limited by 32 V.S.A.§3831)

Enacted: 1906Estimate: $160,000# of parcels: 10

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Property held for the benefit of college fraternities and societies and corporationsowning such property are exempt. The exemption shall not apply to property heldfor investment purposes.

PURPOSE To exempt organizations that provide civic services.

5.012 Young Men’s and Women’s Christian Associations

Statute: 32 V.S.A. §3802(6)Enacted: 1906 (YMCA) and 1963 (YWCA)Estimate: $173,000# of parcels: 9

YMCA and YWCA property is exempt if it is used for the purposes of theorganization and the income is used entirely for such purposes.

PURPOSE To exempt non profit organizations that offer benefits to the community.

5.013 Cemeteries

Statute: 32 V.S.A. § 3802(7); 18 V.S.A. §§5317, 5376Enacted: some version of this exemption existed when Vermont became a

State in 1791Estimate: $640,000# of parcels: 869

PURPOSE To exempt property with fair market value that is difficult to ascertain and limitedoptions for alternative uses.

5.014 Owned by agricultural societies

Statute: 32 V.S.A. §3802(9)Enacted: 1902Estimate: $393,000# of parcels: 13

The property is exempt if it is used annually for agricultural fairs.

PURPOSE To exempt property that is used to publicly support the state’s agriculturaleconomy.

5.015 $10,000 exemption of appraised value of a residence for a veteran

Statute: 32 V.S.A. § 3802(11) and 32 V.S.A. § 6066(i)Enacted: prior to 1910; amended 2011Estimate: $291,000

# of parcels: 2,188

The exemption is for a veteran of any war or who has received an AmericanExpeditionary Medal. The exemption also applies to the veteran’s spouse,widow, widower, or child, if one or more of them are receiving disability

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compensation for at least 50 percent disability, death compensation, dependenceand indemnity compensation, or pension for disability paid through any militarydepartment or the Veteran’s Administration.

Because over 60% of the owners who receive this exemption pay educationproperty taxes based on income, the statute was amended in 2011 to specify thatthe property tax adjustment shall be calculated without regard to the $10,000exemption.

PURPOSE To permanently provide property tax reductions to certain veterans and theirfamilies.

5.016 Property exclusively installed and operated for the abatement of water pollution

Statute: 32 V.S.A. § 3802(12)Enacted: 1961Estimate: Data unavailable and/or included in the municipal exemption estimate

This property is exempt as long as it meets with the approval of the Secretary ofthe Agency of Natural Resources.

PURPOSE To encourage real property improvements that abate water pollution.

5.017 Humane societies


Property owned by a charitable, nonprofit organization devoted to the welfare,protection, and humane treatment of animals is exempt.

PURPOSE To eliminate property taxes for organizations that protect animals.

5.018 FQHC and RHCs


Property owned by a federally qualified health center or a free-standing, federallydesignated rural health clinic is exempt.

PURPOSE To support health centers in an underserved area or population, offer a slidingfee scale, provide comprehensive services, and have an ongoing qualityassurance program.

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5.019 Ski Lifts and Snowmaking Equipment (Fixtures)

Statute: 32 V.S.A. § 5401(10)(D)Enacted: 2002 (applicable to grand lists for 2004 and after)Estimate: $1,606,000# of parcels: 40

Personal property, machinery, inventory, and equipment, including ski lifts andsnow-making equipment, is exempt.

PURPOSE To support the ski industry and encourage personal property investments andimprovements.

5.020 Municipally owned

Statute: 32 V.S.A. § 5401(10)(F)Enacted: 1997Estimate: $13,934,000# of parcels: 4,298

Prior to the enactment of Act 68 in 2003, which classified property as eitherhomestead or nonresidential, there was no explicit statutory exemption formunicipal property. However, case law recognized that municipal property enjoysan inherent exemption provided that it is used for a public purpose. In Act 68, theLegislature expressly excluded property owned by a municipality located in thatmunicipality and is used for a municipal purpose from the education property taxbase.

PURPOSE To prevent government from taxing itself.

5.021 Whey Processing Fixtures

Statute: 32 V.S.A. § 5401(10)(G)Enacted: 2001Estimate: $281,000# of parcels: 2

Nonresidential property does not include machinery and equipment used directlyin the processing of whey.

PURPOSE To support industries utilizing whey processing facilities.

5.022 Municipalities Hosting Large Power Plants

Statute: 32 V.S.A. § 5402(d)Enacted: § 4502(d) – 2004; §5402a – 1999 (but special taxing provisions

have applied since 1998)Estimate: $791,000

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The nonresidential and the residential education property tax rates (adjustedappropriately for the CLA and district spending) are applied at ¾ of the baseamount in the Town of Vernon, the only municipality that qualifies.

PURPOSE To lower property taxes by 25% for businesses and residents of the communityhosting an operating nuclear power facility.

5.100 Adjustments to Property Values

5.101 Use Value Appraisal Program

Statute: Chapter 124 of Title 32Enacted: 1977Estimate: $40,192,000 (Education Fund portion only)# of parcels 16,308

Commonly known as the “current use program,” the existing program has beenfrequently changed, and the statutes amended. The estimated expenditure valuedoes not include the appropriation for municipal reimbursement of taxes whichwas an additional $12,289,000 for a total program cost of $52.5 million in FY2011.

PURPOSE To have the value of the land used for agriculture and forestry reflect how it isused rather than the “highest and best” use which is fair market value. Thislowers the property level for these land-intensive industries.

5.102 Qualified Housing

Statute: 32 V.S.A. § 5404a(a)(6)Enacted: 2004Estimate: $871,000# of parcels: 615

Residential rental units that are subject to specific rent restrictions may qualify foran exemption of 10% of the value of the parcel.

PURPOSE To reduce by 10% the taxes on housing with rent restrictions which make valuingthese properties using the income approach difficult.

5.103 Tax Increment Financing Districts

Statute: 32 V.S.A. § 5404a(f)Enacted: 1997, amended multiple times (1998 Act No. 71; 2000 Act No. 159;

2006 Act No. 184; 2008 Act No. 190; 2009 Act No. 54)Estimate: $1,966,000

TIF allows a municipality to retain and utilize a portion of the education propertytax revenue from an approved district for improvements related to the district.

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PURPOSE To allow communities to encourage investment in designated areas meetingcertain criteria and to utilize locally the additional property tax revenueattributable to those improvements.

5.104 Property Tax Adjustments

Statute: Chapter 154 of Title 32Enacted: 1997 (Note: Chapter 153, providing for payment of property tax

rebates and credits, was enacted in 1969 and repealed in 1997but the rebate program was incorporated into the new Chapter 154)Estimate: $150,100,000

Homestead property taxpayers may reduce their property tax liability byrecalculating their education property tax as a percentage of household income.This figure is for the education property tax adjustment portion alone; it does notinclude the amounts reimbursed to homestead taxpayers under $47,000 formunicipal property tax adjustment, or renters in the circuit breaker program.

PURPOSE To allow property taxes on homesteads to reflect household income.

5.200 Session Law Exemptions

5.201 Permanent Session Law Exemptions (never codified)

Statute: VariousEnacted: Multiple datesEstimate: $31,000

The Legislature has enacted a number of property-specific permanentexemptions from education property tax. The ones that can be identified havebeen grouped together.

Property Name City/Town Legal ReferenceHolton Home Brattleboro 2008 Act No.190 and 1892 Act No.213Moose Lodge Rutland City 1945 Act No.204Italian American Club Rutland City 1939 Act No.250American Legion Rutland City 1921 Act No.31Knights of Columbus Rutland City 1921 Act No.262Masonic Building Brattleboro 1910 Act No.370Masonic Temple Rutland City 1900 Act No.244

PURPOSE These exemptions are permanently provided to specific properties that havedemonstrated an individual purpose to the legislature.

5.202 Skating Rinks (temporary)

Statute: 2008 Act No.190 Sec. 40 (FY09 and FY10); Amended 2010 Act No.160 Sec. 22 (FY11); Amended 2011 Act No. 45 Sec. 13f (FY12 at 50%)

Enacted: 2008; amended 2010 and 2011Estimate: $28,000# of parcels: 4

43

Property operated as a skating rink, on a nonprofit basis which provided facilitiesto local public schools for a sport officially recognized by the Vermont Principals’Association.

PURPOSE These exemptions are provided on a temporary basis while the legislature worksto create a long term, comprehensive policy pertaining to these types of facilities.

5.203 Recreation Facilities (temporary)

Statute: 2008 Act No.190 Sec. 101 (FY09 only); 2009 Special Session ActNo. 1 Sec. H.49 (FY10 and FY11); Amended 2011 Act No. 45

Sec. 13fe (FY12 at 50%)Enacted: 2008; amended 2009 and 2011Estimate: $71,000# of parcels: 2

Buildings and land owned and occupied by a 501(c)(3) health, recreation, andfitness organization, one of which is designated by the Springfield Hospital andthe other designated by the North Country Hospital, to promote exercise andhealthy lifestyles for the community and to serve citizens of all income levels inthis mission.

PURPOSE These exemptions are provided on a temporary basis while the legislature worksto create a long term, comprehensive policy pertaining to these types of facilities.

5.204 VEPC Approved Stabilization Agreements

Statute: 32 V.S.A. §5404aEnacted: 1997Estimate: $51,000# of parcels: 2

Municipalities that entered into property tax stabilization agreements forimprovements to commercial or industrial property were allowed to apply toVEPC for additional state education property tax stabilizations for up to 10 years.

PURPOSE These exemptions are reviewed and provided on a case by case basis inconjunction with other economic development efforts.

5.300 Property Taxed Under Alternate Scheme

PURPOSE Each of these types of property is taxed under an alternative tax scheme thatwas determined to be more appropriate and not by the traditional method ofapplying the education property tax rate set annually to the fair market value ofthe property.

5.301 Large Power Plants

Statute: 32 V.S.A. §5401(10)(B)Enacted: 1997; amended 2003 and 2012

44

Alternative Tax: 32 V.S.A §5402a (repealed effective 7/1/12)

The Vermont Yankee Nuclear power facility is exempt from the educationproperty tax. Instead, the electrical energy generating tax in the amount of$0.0025 per kWh of electrical energy produced is applied. This tax began on July1, 2012. Prior to the current tax, between 2004 and 2012, the facility wascharged alternate, tiered, electric generating plant education property tax basedon the megawatt hours of generation. Between 1997 and 2004, the educationproperty tax was set as a percentage of the “appraised value” of the facility Theappraised value was defined as “its original cost less depreciation as reported tothe public service board for rate regulation purposes” or net book value.

5.302 Railroad Property

Statute: 32 V.S.A. §3803(1)Enacted: 1882Alternative Tax: 32 V.S.A. §8211

An alternative tax is assessed on the appraised value of property and corporatefranchise of each railroad company. The revenue is split between the state’sgeneral fund and the town where the railroad property is located.

5.303 Telephone Property Tax

Statute: 32 V.S.A. §3803(2)Enacted: 1882Alternative Tax: 32 V.S.A. §§8521 and 8522

A company may elect either a telephone property tax of 2.37% of net book valueor an alternative tax based on gross operating revenue. This is a general fund taxsource, rather than the education fund where property taxes and theiralternatives are typically deposited.

5.304 Wind-Powered Electric Generating Facilities

Statute: 32 V.S.A. § 5401(10)(J)(i)Enacted: 2008; amended 2012Alternative Tax: 32 V.S.A. § 5402c(a)

The buildings and fixtures (not the land) of wind-powered electric generatingfacilities that are one megawatt and over are exempt from education property tax.The alternate tax is $0.003 per kWh of electrical energy produced. Thealternative tax was amended (2012 Act No. 127 Sec. 5) to apply to facilities thatgenerate at least one megawatt instead of the original five megawatts. Smallerfacilities are exempt.

5.305 Renewable Energy Plant Generating Electricity from Solar Power

Statute: 32 V.S.A. § 5401(10)(J)(ii)Enacted: 2012Alternative Tax: 32 V.S.A. § 8701

45

The fixtures and personal property (not land) of a solar electric renewable energyplant are exempt from the education property tax. Plants larger than 10 kWh aresubject to a uniform capacity tax of $4.00 per kWh of plant capacity. Smallerfacilities are exempt from both the property tax and the generation tax. Theexemption for small facilities is repealed in 10 years on January 1, 2023.

46

LIST OF FISCAL YEAR 2011 BANK FRANCHISE TAX EXPENDITURES

6.000 Exemptions from Tax on Deposits

6.001 Credit Unions

Statute: 8 V.S.A. §2085Enacted: 1967Estimate: $1,297,000

Deposits and shares in Vermont state-chartered credit unions are not subject totaxation.

PURPOSE: To subsidize financial services for individuals with low and moderate incomesand in underserved communities.

6.100 Bank Franchise Tax Credits


Statute: 32 V.S.A. §5930uEnacted: 2000Estimate: $1,377,300

A credit is available for affordable rental housing projects or owner-occupiedaffordable housing units, provided the project has been authorized by theVermont Housing Finance Agency. The amount of the credit is based on ataxpayer’s eligible cash contribution and the agency’s allocation plan. Total taxcredits available to the taxpayer are the amount of the first-year allocation plusthe succeeding four years’ deemed allocation.


6.102 Downtown and Village Center Program Tax Credits

Statute: 32 V.S.A. §5930ccEnacted: 2006 (replacing similar credits from 1997)Estimate: $894,300

Three available credits for improvements in a designated downtown or villagecenter:Historic rehabilitation – 10% of qualified rehabilitation expendituresFaçade improvement – 25% of qualified expenditures (maximum = $25,000)Code improvement – 50% of qualified expenditures.



47

Statute: 32 V.S.A. §5830bEnacted: 1986; amended 2006Estimate: $0

A credit is available for a taxpayer who contributes to the fund in an amountequal to the lesser of either 4% of the taxpayer’s contribution or 50% of thetaxpayer’s tax liability for the year prior to claiming the credit, provided that theaggregate credit allowable for all taxable years not exceed 20% of the taxpayer’scontribution to the initial capitalization of the fund.



Statute: 32 V.S.A. §5830cEnacted: 1990Estimate: $0

Credit for the difference between interest income that would have been receivedat the charitable threshold rate and actual interest income received. The rateeffective each July 1 is 2% below Bank Prime Loan Rate for March.


LIST OF FISCAL YEAR 2011 INSURANCE PREMIUMS TAX EXPENDITURES

7.000 Insurance Premiums Tax Credits


Statute: 32 V.S.A. §5930uEnacted: 2000Estimate: $440,000

A credit is available for affordable rental housing projects or owner-occupiedaffordable housing units, provided the project has been authorized by theVermont Housing Finance Agency. The amount of the credit is based on ataxpayer’s eligible cash contribution and the agency’s allocation plan. Total taxcredits available to the taxpayer are the amount of the first-year allocation plusthe succeeding four years’ deemed allocation.


7.002 Downtown and Village Center Program Tax Credits

Statute: 32 V.S.A. §5930ccEnacted: 2006 (replacing similar credits from 1997)

48

Estimate: $0

Three available credits for improvements in a designated downtown or villagecenter:Historic rehabilitation – 10% of qualified rehabilitation expendituresFaçade improvement – 25% of qualified expenditures (maximum = $25,000)Code improvement – 50% of qualified expenditures.



Statute: 32 V.S.A. §5830bEnacted: 2004, amended 2006Estimate: $0

A credit is available for a taxpayer who contributes to the fund in an amountequal to the lesser of either 4% of the taxpayer’s contribution or 50% of thetaxpayer’s tax liability for the year prior to claiming the credit, provided that theaggregate credit allowable for all taxable years not exceed 20% of the taxpayer’scontribution to the initial capitalization of the fund.


7.100 Exemptions from the Premiums Tax

7.101 Annuity Considerations


No tax shall be due as from annuity considerations

PURPOSE To exempt non-traditional insurance/financial products from taxation.

7.102 Fraternal Societies

Statute: 8 V.S.A. §4500Enacted: 1959Estimate: Less than $100,000

Fraternal organizations are exempt from the premiums tax.

PURPOSE To exempt organizations that are not insurance companies.

7.103 Hospital and Medical Service Organizations

Statute: 8 V.S.A. §§4518, 4590Enacted: 1939

49

Estimate: $8,909,000

Hospital services and medical services organizations are exempt from thepremiums tax.

PURPOSE To exempt non profit companies that provide health care insurance coverage.

50

LIST OF FISCAL YEAR 2011 GASOLINE AND DIESEL FUEL TAXEXPENDITURES

8.000 Gasoline and Diesel Fuel Tax Expenditures

8.001 Gasoline Tax

There are no end user exemptions from the gasoline tax.

8.002 Diesel Tax


Note: The TIB assessment on diesel fuel was effective for only part of FY2009 whichlargely explains the increase in the estimate from FY 2009 to FY 2011.

23 V.S.A. §3003 imposes on the sale of diesel fuel (1) a tax of $0.25 per gallon, (2) apetroleum distributor license fee of $0.01 per gallon which is deposited in thepetroleum clean up fund and (3) a transportation infrastructure bond (TIB) fundassessment of $0.03 per gallon. This analysis treats exemptions from the tax, feeand assessment as all being tax expenditures and herein the term “tax” is allinclusive.

As specified in 23 V.S.A. §3003(d)(1), the following uses are exempted from the dieselfuel tax, the license fee and TIB assessment: off road uses for agricultural purposes use by a vehicle registered as a farm truck off road uses by any vehicle uses by state or municipal entities (including school districts, fire districts) use by a non-profit public transit agency

Purpose: The exemption for off road uses and farm trucks is based on the idea that the dieseltax is a user fee imposed on and limited to users of the state highway system. Theexemption for municipal entities and public transit agencies is based onadministrative convenience.

51

LIST OF FISCAL YEAR 2011 MOTOR VEHICLE PURCHASE AND USETAX EXPENDITURES

9.000 Motor Vehicle Purchase and Use Tax Expenditures

9.001 Religious or charitable institutions or volunteer fire companies

Statute: 32 V.S.A. §8911 (3)Enacted: 1960, amended 1987, 2006Estimate: $107,000

Purpose: to relieve the burden of state exactions on selected groups.

9.002 Non-registered vehicles

Statute: 32 V.S.A. §8911 (5)Enacted: 1960, amended 1987, 2006Estimate: Data unavailable

Purpose: From a user fee perspective, since only registered vehicles are entitled to use thestate highway system, non-registered vehicles impose no costs on the system.

9.003 Gifts

Statute: 32 V.S.A. §8911 (8)Enacted: 1960, amended 1987, 2006Estimate: $2,410,000

Purpose: to avoid the intrusion of a tax into sharing transactions that are common withinfamilies.

9.004 IRC Sec. 351


Note: “IRC Sec. 351” refers to transfers by an owner to a business controlled by theowner pursuant to Internal Revenue Code Sec. 351.

Purpose: to limit the tax to transfers of ownership between two distinct parties as opposed tothe same party wearing different legal hats.

9.005 Handicapped


52


9.006 Veterans



9.007 General exemption of trade-in value

Statute: 32 V.S.A. §8902(4) and (5)Enacted: 1960, amended 1967Estimate: $22,900,000

Purpose: The standard rationale for the trade-in allowance is that it is necessary to avoid“double-taxation” – but absent the exemption a person buying one vehicle andtrading in another would not be taxed twice for their purchase or use of the samevehicle. More precisely, the exemption reflects the view that when you pay a tax onthe use value of a vehicle, that tax payment is like a credit that you should be able todraw down against your use of that vehicle and if you sell it when it has a residualvalue, to transfer the credit to a new vehicle.

(dr req 14-361 – draft 1.3) Page 1 of 3012/2/2013- BNH/PGG - 11:35 AM

VT LEG #294505 v.2

Introduced by1

Referred to Committee on2

Date:3

Subject: Statutory purposes; tax expenditures4

Statement of purpose of bill as introduced: This bill proposes to enumerate the5

statutory purpose of each tax expenditure codified in the Vermont Statutes6

Annotated.7

An act relating to the statutory purposes of Vermont’s tax expenditures8

It is hereby enacted by the General Assembly of the State of Vermont:9

* * * Income, Bank Franchise, and Insurance Premium Taxes * * *10

Sec. 1. 16 V.S.A. § 2820 is added to read:11

§ 2820. STATUTORY PURPOSES12

The statutory purpose of the interest income from Vermont Student13

Assistance Corporation bonds exemption in section 2825 of this title is to14

encourage investment in bonds supporting Vermont projects.15

Sec. 2. 30 V.S.A. § 8060(c) is added to read:16

(c) The statutory purpose of the Vermont Telecommunications Authority17

bonds and notes exemption in section 8074 of this title is to encourage18

investment in bonds supporting Vermont projects.19


VT LEG #294505 v.2



(a) The statutory purpose of the Vermont municipal bond income3

exemption in subdivision 5811(21)(A)(i) of this title is to encourage4

investment in Vermont State and local bonds and maintain the State’s5

favorable bond rating.6

(b) The statutory purpose of the Vermont flat capital gains exclusion in7

subdivision 5811(21)(B)(ii) of this title is to encourage savings and investment8

while exempting a portion of the gain that may represent inflation. The9

40-percent business capital gains exclusion mitigates the impact of one-time10

realizations in a progressive tax structure.11

(c) The statutory purpose of the Vermont credit for child and dependent12

care in subsection 5822(d) of this title is to provide tax relief to working13

taxpayers who must incur dependent care expenses to stay in the workforce.14

(d) The statutory purpose of the Vermont credit for persons who are elderly15

or disabled in subsection 5822(d) of this title is to provide tax relief for seniors16

and persons who are disabled with little tax-exempt retirement or disability17

income.18

(e) The statutory purpose of the Vermont investment tax credit in19

subsection 5822(d) of this title is to encourage Vermont business investments.20


VT LEG #294505 v.2

(f) The statutory purpose of the Vermont farm income averaging credit in1

subdivision 5822(c)(2) of this title is to mitigate the adverse tax consequences2

of fluctuating farm incomes under a progressive tax structure.3

(g) The statutory purpose of the Vermont business solar energy credit in4

subsection 5822(d) and section 5930z of this title is to provide a temporary,5

enhanced incentive for business solar investments located in Vermont.6

(h) The statutory purpose of the Vermont military pay exemption in7

subdivisions 5823(a)(2) and (b)(3) of this title is to provide additional8

compensation for military personnel for service to the country.9

(i) The statutory purpose of the Vermont federal employment opportunity10

income exemption in subdivision 5823(a)(5) of this title is to reduce the11

taxation of people receiving federal employment opportunity income and12

reduce the cost to government of providing this assistance.13

(j) The statutory purpose of the Vermont charitable housing credit in14

section 5830c of this title is to encourage investment in housing in Vermont.15

(k) The statutory purpose of the Vermont affordable housing credit in16

section 5930u of this title is to encourage the investment in and development of17

affordable housing in Vermont.18

(l) The statutory purpose of the Vermont qualified sale of a mobile home19

park credit in section 5828 of this title is to encourage sales of mobile home20

parks as an alternative to closure.21


VT LEG #294505 v.2

(m) The statutory purpose of the Vermont higher education investment1

credit in section 5825a of this title is to encourage savings Vermont 529 plans2

and lower the cost of higher education for taxpayers.3

(n) The statutory purpose of the Vermont entrepreneurs’ seed capital fund4

credit in section 5830b of this title is to provide an incentive for investment in5

small businesses in Vermont.6

(o) The statutory purpose of the Vermont historical rehabilitation tax credit7

in subsection 5930cc(a) of this title is to provide incentives to improve and8

rehabilitate historic properties in designated downtowns and village centers.9

(p) The statutory purpose of the Vermont facade improvement tax credit in10

subsection 5930cc(b) and sections 5930aa–5930ff of this title is to provide11

incentives to improve facades and rehabilitate historic properties in designated12

downtowns and village centers.13

(q) The statutory purpose of the Vermont code improvement tax credit in14

subsection 5930cc(c) and sections 5930aa–5930ff of this title is to provide15

incentives to improve and rehabilitate historic properties in designated16

downtowns and village centers by making code improvements.17

(r) The statutory purpose of the Vermont research and development tax18

credit in section 5930ii of this title is to encourage business investment in19

research and development within Vermont.20


VT LEG #294505 v.2

(s) The statutory purpose of the Vermont wood products manufacture credit1

in section 5930y of this title is to lower income taxes for businesses in the2

Northeast Kingdom counties of Essex and Caledonia in order to retain3

employees in wood products manufacturing.4

(t) The statutory purpose of the Vermont economic advancement tax5

incentive credits in section 5930a of this title is to provide incentives to6

businesses creating new jobs in Vermont.7

(u) The statutory purpose of the Vermont downtown tax credits in sections8

5930n–5930r of this title is to provide incentives to improve and rehabilitate9

historic properties in designated downtowns and village centers.10

(v) The statutory purpose of the Vermont low-income child and dependent11

care credit in section 5828c of this title is to provide additional cash relief to12

lower-income working taxpayers who incur dependent care expenses in13

certified centers to stay in the workforce.14

(w) The statutory purpose of the Vermont earned income tax credit in15

section 5828b of this title is to increase the after-tax income of low-income16

working families and individuals and to provide an incentive to work for those17

with little earned income.18

(x) The statutory purpose of the Vermont machinery and equipment tax19

credit in section 5930ll of this title is to provide an incentive to make a major,20


VT LEG #294505 v.2

long-term capital investment in Vermont-based plant and property to ensure1

the continuation of in-state employment.2

(y) The statutory purpose of the Vermont employment growth incentive in3

section 5930b of this title is to provide a cash incentive to businesses that4

expand and create jobs in Vermont.5

(z) The statutory purpose of the Vermont Downtown and Village Center6

Program tax credits in section 5930cc of this title is to provide incentives to7

improve and rehabilitate historic properties in designated downtowns and8

village centers.9

(aa) The statutory purpose of allowing federal itemized deductions and10

other federal expenditures between federal adjusted gross income and federal11

taxable income, as listed in the report required by 32 V.S.A. § 312, is to reflect12

Vermont’s choice to use federal taxable income as a base for Vermont’s state13

income tax.14

* * * Meals and Rooms Taxes and Insurance Premium Taxes * * *15



(a) The statutory purpose of the Vermont meals provided for nonprofit18

hospital service corporations exemption in section 4518 of this title is to reduce19

costs for certain nonprofit organizations.20


VT LEG #294505 v.2

(b) The statutory purpose of the Vermont rooms provided to nonprofit1

hospital service corporations exemption in section 4518 of this title is to reduce2


(c) The statutory purpose of the Vermont sales to nonprofit hospital service4

corporations exemption in section 4518 of this title is to exempt from tax a5

government-sponsored entity.6

(d) The statutory purpose of the Vermont nonprofit medical service7

corporations premium exemption in section 4518 of this title is to exempt8

nonprofit companies that provide health care insurance coverage.9

(e) The statutory purpose of the Vermont hospital and medical service10

organizations premium exemption in section 4518 of this title is to exempt11




(a) The statutory purpose of the Vermont meals provided to nonprofit15

medical service corporations exemption in section 4590 of this title is to reduce16


(b) The statutory purpose of the Vermont rooms provided to nonprofit18

medical service corporations exemption in section 4590 of this title is to reduce19



VT LEG #294505 v.2

(c) The statutory purpose of the Vermont hospital and medical service1

organizations premium exemption in section 4590 of this title is to exempt2


(d) The statutory purpose of the Vermont nonprofit medical service4

corporations premium exemption in section 4590 of this title is to exempt5


(e) The statutory purpose of the Vermont sales to nonprofit medical service7

corporations exemption in section 4590 of this title is to exempt from tax a8

government-sponsored entity.9



(a) The statutory purpose of the Vermont meals provided for credit unions12

exemption in section 30901 of this title is to lessen the taxes on financial13

institutions that provide banking to underserved populations.14

(b) The statutory purpose of the Vermont rooms provided to credit unions15

exemption in section 30901 of this title is to lessen the taxes on financial16

institutions that provide banking to underserved populations.17

(c) The statutory purpose of the Vermont sales to credit unions exemption18

in section 30901 of this title is to lessen the taxes on financial institutions that19

provide banking to underserved populations.20


VT LEG #294505 v.2

(d) The statutory purpose of the Vermont credit union tax on deposits1

exemption in section 30901 of this title is to subsidize financial services for2

individuals with low and moderate incomes and in underserved communities.3



(a) The statutory purpose of the Vermont grocery-type items furnished for6

take-out exemption in subdivision 9202(10)(D)(i) of this title is to limit the tax7

burden on the purchase of goods that are necessary for the health and welfare8

of all people in Vermont.9

(b) The statutory purpose of the Vermont meals served or furnished on the10

premises of a nonprofit organization exemption in subdivision11

9202(10)(D)(ii)(I) of this title is to reduce costs for nonprofit organizations.12

(c) The statutory purpose of the Vermont meals provided on school13

premises exemption in subdivision 9202(10)(D)(ii)(II) of this title is to reduce14

the overall cost of education in Vermont.15

(d) The statutory purpose of the Vermont or federal institutions premises16

where meals are provided to inmates and employees exemption in subdivision17

9202(10)(D)(ii)(III) of this title is to prevent the taxation of entities that are18

funded by taxpayers.19

(e) The statutory purpose of the Vermont meals provided at hospitals and20

convalescent and nursing homes exemption in subdivision 9202(10)(D)(ii)(IV)21


VT LEG #294505 v.2

of this title is to reduce the overall costs of health care and senior care in1

Vermont.2

(f) The statutory purpose of the Vermont meals furnished while3

transporting passengers for hire on train, bus, or airplane exemption in4

subdivision 9202(10)(D)(ii)(V) of this title is to reduce the administrative costs5

for transit companies providing interstate travel services.6

(g) The statutory purpose of the Vermont summer camp for children7

exemption in subdivision 9202(10)(D)(ii)(VI) of this title is to promote8

Vermont outdoor education for youth.9

(h) The statutory purpose of the Vermont nonprofits at fairs, bazaars,10

picnics, and similar events exemption in subdivision 9202(10)(D)(ii)(VII) of11

this title is to reduce costs for certain nonprofit organizations.12

(i) The statutory purpose of the Vermont meals furnished to an employee of13

a hotel or restaurant operator as remuneration for his or her employment14

exemption in subdivision 9202(10)(D)(ii)(VIII) of this title is to avoid double15

taxation of income and benefits.16

(j) The statutory purpose of the Vermont meals provided to the elderly17

pursuant to the Older Americans Act exemption in subdivision18

9202(10)(D)(ii)(IX) of this title is to reduce the tax burden on senior citizens.19


VT LEG #294505 v.2

(k) The statutory purpose of the Vermont meals purchased with food1

stamps exemption in subdivision 9202(10)(D)(ii)(X) of this title is to reduce2

the tax burden on low-income individuals.3

(l) The statutory purpose of the Vermont meals served on the premises of a4

continuing care retirement community exemption in subdivision5

9202(10)(D)(ii)(XI) is to reduce the tax burden on senior citizens.6

(m) The statutory purpose of the Vermont time share rights exemption in7

subdivision 9202(8) of this title is to avoid double taxation on holdings that are8

subject to property taxes.9

(n) The statutory purpose of the Vermont student housing exemption in10

subdivision 9202(8) of this title is to reduce the overall costs of education in11

Vermont.12

(o) The statutory purpose of the Vermont permanent residents exemption in13

subdivisions 9202(6) and (7) of this title is to treat long-term hotel guests as14

permanent residents of the State for purposes of administrating the rooms tax.15

(p) The statutory purpose of the Vermont rooms furnished to an employee16

of a hotel or restaurant operator as remuneration for his or her employment17

exemption in subdivision 9202(6) of this title is to avoid double taxation of18

income and benefits.19


VT LEG #294505 v.2

(q) The statutory purpose of the summer camp for children exemption in1

subdivision 9202(6) of this title is to promote Vermont outdoor education for2

youth.3

(r) The statutory purpose of the Vermont hospital, sanatorium,4

convalescent home, nursing home, or home for the aged room charges5

exemption in subdivision 9202(3)(A) of this title is to reduce the overall costs6

of health care and senior care in Vermont.7

(s) The statutory purpose of the Vermont State or United States operated8

establishment room charges exemption in subdivision 9202(3)(B) of this title is9

to abide by the requirement that states will not tax the federal government and10

to avoid the instance of the State taxing itself.11

(t) The statutory purpose of the Vermont rooms on the premises of a12

nonprofit exemption in subdivision 9202(3)(C) of this title is to reduce costs13

for certain nonprofit organizations.14

(u) The statutory purpose of the Vermont rooms on the premises of a15

continuing care retirement community exemption in subdivision 9202(3)(D) of16

this title is to reduce the tax burden on senior citizens.17

* * * Sales Taxes * * *18




VT LEG #294505 v.2

(a) The statutory purpose of the Vermont medical products exemption in1

subdivision 9741(2) of this title is to limit the tax burden on the purchase of2

goods that are necessary for the health and welfare of all people in Vermont.3

(b) The statutory purpose of the Vermont agricultural inputs exemption in4

subdivision 9741(3) of this title is to provide tax relief to the agricultural5

industry through a sales tax exemption.6

(c) The statutory purpose of the Vermont veterinary supplies exemption in7

subdivision 9741(3) of this title is to provide tax relief to the agricultural8

industry through a sales tax exemption.9

(d) The statutory purpose of the Vermont nonbusiness, casual sales10

exemption in subdivision 9741(4) of this title is to prevent the occasional sale11

of personal property by individuals not engaged as merchants from being12

subjected to the tax.13

(e) The statutory purpose of the Vermont fuels for railroads and boats14

exemption in subdivision 9741(7) of this title is to avoid the taxation of fuels15

for the types of transportation for which public expenditure on infrastructure is16

unnecessary.17

(f) The statutory purpose of the Vermont sales of food exemption in18

subdivision 9741(13) of this title is to limit the tax burden on the purchase of19

goods that are necessary for the health and welfare of all people in Vermont.20


VT LEG #294505 v.2

(g) The statutory purpose of the Vermont manufacturers’ material and1

equipment exemption in subdivision 9741(14) of this title is to avoid tax2

pyramiding on goods and encourage investments in equipment by3

manufacturing entities.4

(h) The statutory purpose of the Vermont newspapers exemption in5

subdivision 9741(15) of this title is to maintain the continued availability of6

printed news resources.7

(i) The statutory purpose of the Vermont packaging and shipping materials8

exemption in subdivision 9741(16) of this title is to support industry and9

prevent tax pyramiding by excluding inputs into business production and10

distribution.11

(j) The statutory purpose of the Vermont rented furniture for residential use12

exemption in subdivision 9741(17) of this title is to limit sales tax on items that13

are not being sold and to avoid instances of double taxation.14

(k) The statutory purpose of the Vermont municipal, State, and federal15

recreation facilities admission exemption in subdivision 9741(18) of this title is16

to ensure that fees collected for the use of public lands are used only to fund17

the operations of the public lands and not as a source of revenue.18

(l) The statutory purpose of the Vermont rentals of coin-operated washing19

facilities exemption in subdivision 9741(19) of this title is to reduce the tax20

burden on companies that operate coin-operated washing facilities.21


VT LEG #294505 v.2

(m) The statutory purpose of the Vermont admission fees to nonprofit1

museums exemption in subdivision 9741(20) of this title is to support the2

missions of certain nonprofit facilities and encourage higher visitation.3

(n) The statutory purpose of the Vermont items sold to fire, ambulance, and4

rescue squads exemption in subdivision 9741(21) of this title is to provide tax5

relief to organizations charged with protecting the safety of the public.6

(o) The statutory purpose of the Vermont funeral charges exemption in7

subdivision 9741(22) of this title is to prevent burdening the bereaved with8

taxation.9

(p) The statutory purpose of the Vermont commercial, industrial, or10

agricultural research property use exemption in subdivision 9741(24) of this11

title is to reduce financial barriers to research and innovation in the12

commercial, industrial, and agricultural industries.13

(q) The statutory purpose of the Vermont agricultural machinery and14

equipment exemption in subdivision 9741(25) of this title is to support the15

agricultural industry and avoid tax pyramiding of agricultural products.16

(r) The statutory purpose of the Vermont energy purchases for a residence17

exemption in subdivision 9741(26) of this title is to limit the tax burden on the18

purchase of goods that are necessary for the health and welfare of all people in19

Vermont.20


VT LEG #294505 v.2

(s) The statutory purpose of the Vermont energy purchases for farming1

exemption in subdivision 9741(27) of this title is to support the agricultural2

industry and avoid tax pyramiding of agricultural products.3

(t) The statutory purpose of the Vermont sales of films to movie theaters4

exemption in subdivision 9741(28) of this title is to avoid tax on items that are5

normally not for permanent use within the State.6

(u) The statutory purpose of the Vermont aircraft and depreciable parts for7

commercial use exemption in subdivision 9741(29) of this title is to promote8

the growth of the aircraft maintenance industry in Vermont.9

(v) The statutory purpose of the Vermont railroad rolling stock and10

depreciable parts exemption in subdivision 9741(30) of this title is to support11

the railroad industry and interstate transportation.12

(w) The statutory purpose of the Vermont ferryboats and depreciable parts13

exemption in subdivision 9741(31) of this title is to support ferryboat services14

and interstate transportation.15

(x) The statutory purpose of the Vermont sales of mobile homes and16

modular housing exemption in subdivision 9741(32) of this title is to create17

equity between mobile and modular housing and traditional residential18

construction by providing an exemption for the estimated portion of the cost19

attributable to labor.20


VT LEG #294505 v.2

(y) The statutory purpose of the Vermont United States flag sold to or by1

exempt veterans’ organizations exemption in subdivision 9741(33) of this title2

is to support veterans’ organizations in performing their patriotic function.3

(z) The statutory purpose of the Vermont energy used in manufacturing4

tangible personal property for sale exemption in subdivision 9741(34) of this5

title is to avoid the taxation of manufacturing inputs and promote the health of6

the manufacturing industry in Vermont.7

(aa) The statutory purpose of the Vermont property transferred as part of8

personal service transaction or transfer of intangible property rights exemption9

in subdivision 9741(35) of this title is to exempt tangible personal property that10

is a small portion of a service.11

(bb) The statutory purpose of the Vermont advertising materials exemption12

in subdivision 9741(36) of this title is to exempt tangible personal property that13

is a small portion of a service.14

(cc) The statutory purpose of the Vermont documents that record a15

professional service exemption in subdivision 9741(37) of this title is to16

exempt tangible personal property that is a small portion of a service.17

(dd) The statutory purpose of the Vermont tracked vehicles exemption in18

subdivision 9741(38) of this title is to limit the sales tax on tracked vehicles19

and the lessen the cost of capital investments of those purchases.20


VT LEG #294505 v.2

(ee) The statutory purpose of the Vermont sales of building materials1

exemption in subdivisions 9741(39)(i) and (ii) of this title is to encourage the2

restoration and revitalization of downtown districts.3

(ff) The statutory purpose of the Vermont wholesale transactions between4

telecommunications service providers exemption in subdivision 9741(41) of5

this title is to promote the telecommunications industry by avoiding taxation of6

the inputs and intercompany transactions.7

(gg) The statutory purpose of the Vermont third party scrap construction8

materials exemption in subdivision 9741(43) of this title is to promote the9

reuse and recycling of scrap construction materials.10

(hh) The statutory purpose of the Vermont property incorporated in a11

railroad line exemption in subdivision 9741(44) of this title is to support the12

railroad industry and encourage ongoing investments within Vermont.13

(ii) The statutory purpose of the Vermont clothing and footwear exemption14

in subdivision 9741(45) of this title is to limit the tax burden on the purchase15

of goods that are necessary for the health and welfare of all people in Vermont.16

(jj) The statutory purpose of the Vermont property incorporated into a net17

metering system exemption, on-premise energy system not connected to the18

electric distribution system exemption, and solar hot water heating system19

exemption in subdivision 9741(46) of this title is to encourage the adoption of20


VT LEG #294505 v.2

efficient technologies for generating and distributing renewable energy1

resources.2

(kk) The statutory purpose of the Vermont purchases by and limited3

purchases from 501(c)(3) organizations exemption in subdivision 9743(3) of4

this title is to reduce costs for certain nonprofit organizations.5

(ll) The statutory purpose of the Vermont building materials and supplies6

used in construction or repair of buildings by governmental bodies, 501(c)(3)7

organizations, or development corporations exemption in subdivision 9743(4)8

of this title is to reduce the costs of construction for certain nonprofit9

organizations.10

(mm) The statutory purpose of the Vermont amusement charges for four11

events per year for 501(c)(4)–(13) and (19) organizations and political12

organizations exemption in subdivision 9743(5) of this title is to reduce the13

costs for and encourage participation in a limited number of events organized14

by certain nonprofit organizations.15

(nn) The statutory purpose of the Vermont amusement charges for events16

presented by 501(c)(3) organizations in subdivision 9743(7) of this title is to17

reduce the costs for and encourage participation in fundraising events18

organized by certain nonprofit organizations.19


VT LEG #294505 v.2

(oo) The statutory purpose of the Vermont limitation of tax on1

telecommunications services in section 9771a of this title is to promote the2

growth of telecommunications intensive businesses.3

(pp) The statutory purpose of the Vermont reallocation of receipts from tax4

imposed on sales of construction materials in section 9819 of this title is to5

promote the restoration or revitalization, or both, of downtown districts within6

Vermont.7

(qq) The statutory purpose of the Vermont sales by licensed auctioneers8

exemption in subdivision 9741(48) of this title is to extend the “casual sale”9

exemption to parallel situations involving an auctioneer.10

(rr) The statutory purpose of the Vermont licensed use of prewritten11

software from remote servers exemption in 2012 Acts and Resolves No. 143,12

Sec. 52 is to provide a temporary exemption to businesses and consumers13

while clarifying and drafting the rules for this relatively new model for14

providing software.15

* * * Property Taxes * * *16



The statutory purpose of the Vermont local development corporations19

exemption in section 236 of this title is to exempt government-funded entities20

and promote economic development.21


VT LEG #294505 v.2



The statutory purpose of the Vermont Housing Finance Agency exemption3

in subsection 641(a) of this title is to exempt quasi-government entities that4

provide and promote affordable housing.5



The statutory purpose of the Vermont State Colleges exemption in section8

2178 of this title is to exempt entities receiving government funding and9

provide higher education.10

Sec. 12. 16 App. V.S.A. § 1-15a is added to read:11

§ 1-15a. STATUTORY PURPOSES12

The statutory purpose of the University of Vermont exemption in section13

1-15 of this chapter is to exempt entities receiving government funding and14

providing higher education.15



The statutory purpose of the Vermont cemeteries exemption in sections18

5317 and 5376 of this title is to exempt property with a fair market value that is19

difficult to ascertain and for which there are limited options for alternative20

uses.21


VT LEG #294505 v.2



The statutory purpose of the Vermont libraries exemption in section 109 of3

this title is to exempt libraries that offer free and public access to information4

and research resources.5



The statutory purpose of the Vermont housing authorities exemption in8

section 4020 of this title is to exempt quasi-government entities that provide9

and promote affordable housing.10



The statutory purpose of the Vermont Use Value Appraisal Program in13

chapter 124 of this title is to lower the property tax level for land used for14

agriculture and forestry by valuing it based on how it is used rather than the15

“highest and best” use which is fair market value.16



(a) The statutory purpose of the Vermont federal and State government19

property exemption in subdivision 3802(1) of this title is to prevent20

government from taxing itself.21


VT LEG #294505 v.2

(b) The statutory purpose of the Vermont congressionally chartered1

organizations exemption in subdivision 3802(2) of this title is to exempt2

organizations providing civic services.3

(c) The statutory purpose of the Vermont public, pious, and charitable4

property exemption in sections 3832 and 3840 and subdivision 3802(4) of this5

title is to exempt entities that provide religious, charitable, civic, or public6

services.7

(d) The statutory purpose of the Vermont college fraternities and societies8

exemption in subdivision 3802(5) of this title is to exempt organizations that9

provide civic services.10

(e) The statutory purpose of the Vermont Young Men’s and Women’s11

Christian Associations in subdivision 3802(6) of this title is to exempt12

nonprofit organizations that offer benefits to the community.13

(f) The statutory purpose of the Vermont cemeteries exemption in14

subdivision 3802(7) of this title is to exempt property with a fair market value15

that is difficult to ascertain and for which there are limited options for16

alternative uses.17

(g) The statutory purpose of the Vermont exemption for property owned by18

agricultural societies in subdivision 3802(9) of this title is to exempt property19

that is used to publicly support the State’s agricultural economy.20


VT LEG #294505 v.2

(h) The statutory purpose of the Vermont $10,000.00 exemption of1

appraised value of a residence for a veteran in subdivision 3802(11) of this title2

is to permanently provide property tax reductions to certain veterans and their3

families.4

(i) The statutory purpose of the Vermont property exclusively installed and5

operated for the abatement of water pollution exemption in subdivision6

3802(12) of this title is to encourage real property improvements that abate7

water pollution.8

(j) The statutory purpose of the Vermont humane societies exemption in9

section 3802(15) of this title is to eliminate property taxes for organizations10

that protect animals.11

(k) The statutory purpose of the Vermont federally qualified health center12

or rural health clinic exemption in subdivision 3802(16) of this title is to13

support health centers in an underserved area or population, offer a sliding fee14

scale, provide comprehensive services, and have an ongoing quality assurance15

program.16

(l) The statutory purpose of the Vermont railroad property alternative tax17

scheme in subdivision 3803(1) of this title is to provide an alternative tax18

scheme where the traditional method of applying the education property tax19

rate set annually to the fair market value of the property is inappropriate.20


VT LEG #294505 v.2

(m) The statutory purpose of the Vermont telephone property alternative1

tax scheme in subdivision 3803(2) of this title is to provide an alternative tax2



(n) The statutory purpose of the Vermont permanent session law5

exemptions in 2008 Acts and Resolves No .190, 1892 Acts and Resolves6

No. 213, 1945 Acts and Resolves No. 204, 1939 Acts and Resolves No. 250,7

1921 Acts and Resolves No. 31, 1921 Acts and Resolves No. 262, 1910 Acts8

and Resolves No. 370, and 1900 Acts and Resolves No. 244 is to permanently9

exempt specific properties that have demonstrated an individual purpose to the10

General Assembly.11

(o) The statutory purpose of the Vermont temporary skating rinks12

exemption in 2008 Acts and Resolves No. 190, Sec. 40 (FY09 and FY10),13

Amended 2010 Acts and Resolves No. 160, Sec. 22 (FY11), and Amended14

2011 Acts and Resolves No. 45, Sec. 13f (FY12 at 50 percent) is to15

temporarily provide tax relief while the General Assembly works to create a16

long term, comprehensive policy pertaining to these types of facilities.17

(p) The statutory purpose of the Vermont temporary recreation facilities18

exemption in 2008 Acts and Resolves No. 190, Sec. 101 (FY09 only), 200919

Special Session Acts and Resolves No. 1, Sec. H.49 (FY10 and FY11), and20

Amended 2011 Acts and Resolves No. 45, Sec. 13fe (FY12 at 50 percent) is to21


VT LEG #294505 v.2

provide temporary tax relief while the General Assembly works to create a1

long term, comprehensive policy pertaining to these types of facilities.2



(a) The statutory purpose of the Vermont ski lifts and snowmaking5

equipment exemption in subdivision 5401(10)(D) of this title is to support the6

ski industry and encourage personal property investments and improvements.7

(b) The statutory purpose of the Vermont municipally owned property8

exemption in subdivision 5401(10)(F) of this title is to prevent government9

from taxing itself.10

(c) The statutory purpose of the Vermont whey processing fixtures11

exemption in subdivision 5401(10)(G) of this title is to support industries using12

whey processing facilities.13

(d) The statutory purpose of the Vermont municipalities hosting large14

power plants exemption in subsection 5402(d) of this title is to lower property15

taxes by 25 percent for businesses and residents of the community hosting an16

operating nuclear power facility.17

(e) The statutory purpose of the Vermont qualified housing exemption in18

subdivision 5404a(a)(6) of this title is to reduce by 10 percent the taxes on19

housing with rent restrictions which make valuing these properties using the20

income approach difficult.21


VT LEG #294505 v.2

(f) The statutory purpose of the Vermont tax increment financing districts1

in subsection 5404a(f) of this title is to allow communities to encourage2

investment in designated areas meeting certain criteria and to use locally the3

additional property tax revenue attributable to those improvements.4

(g) The statutory purpose of the Vermont Economic Progress Council5

approved stabilization agreements in section 5404a of this title are to provide6

exemptions on a case-by-case basis in conjunction with other economic7

development efforts.8

(h) The statutory purpose of the Vermont large power plants alternative tax9

scheme in subdivision 5401(10)(B) of this title is to provide an alternative tax10



(i) The statutory purpose of the Vermont wind-powered electric generating13

facilities alternative tax scheme in subdivision 5401(10)(J)(i) of this title is to14

provide an alternative tax scheme where the traditional method of applying the15

education property tax rate set annually to the fair market value of the property16

is inappropriate.17

(j) The statutory purpose of the Vermont renewable energy plant generating18

electricity from solar power alternative tax structure in subdivision19

5401(10)(J)(ii) is to provide an alternative tax scheme where the traditional20


VT LEG #294505 v.2

method of applying the education property tax rate set annually to the fair1

market value of the property is inappropriate.2

(k) The statutory purpose of the Vermont public, pious, and charitable3

property exemption in subsection 5404(a) of this title is to exempt entities that4

provide religious, charitable, civic, or public services.5



(a) The statutory purpose of the Vermont property tax adjustments in8

chapter 154 of this title is to allow property taxes on homesteads to reflect9

household income.10

(b) The statutory purpose of the Vermont $10,000.00 exemption of11

appraised value of a residence for a veteran in subsection 6066(i) of this title is12

to permanently provide property tax reductions to certain veterans and their13

families.14

* * * Insurance Premium Taxes * * *15



The statutory purpose of the Vermont annuity considerations in section18

3718 of this title is to exempt nontraditional insurance or financial products, or19

both, from taxation.20



VT LEG #294505 v.2


The statutory purpose of the Vermont fraternal societies in section 4500 of2

this title is to exempt organizations that are not insurance companies.3

* * * Transportation Taxes * * *4



The statutory purpose of the Vermont diesel tax exemption in section 30037

of this title is to exempt off-road uses and farm trucks from the user fee for the8

State highway system. The exemption for municipal entities and public transit9

agencies is based on administrative convenience.10



(a) The statutory purpose of the Vermont religious or charitable institutions13

or volunteer fire companies exemption in subdivision 8911(3) of this title is to14

relieve the burden of State exactions on selected groups.15

(b) The statutory purpose of the Vermont nonregistered vehicles exemption16

in subdivision 8911(5) of this title is to exempt vehicles that are not entitled to17

use the State highway system from the tax.18

(c) The statutory purpose of the Vermont gifts exemption in subdivision19

8911(8) of this title is to avoid the intrusion of a tax into sharing transactions20

that are common within families.21


VT LEG #294505 v.2

(d) The statutory purpose of the Internal Revenue Code § 351 exemption in1

subdivision 8911(10) of this title is to limit the tax to transfers of ownership2

between two distinct parties.3

(e) The statutory purpose of the Vermont handicapped exemption in4

subdivision 8911(12) of this title is to relieve the burden of State exactions on5

selected groups.6

(f) The statutory purpose of the Vermont veterans exemption in subdivision7

8911(14) of this title is to relieve the burden of State exactions on selected8

groups.9

(g) The statutory purpose of the Vermont general exemption of trade-in10

value in subdivisions 8902(4) and (5) of this title is to ensure the use value of a11

vehicle is taxed only once.12

* * * Effective Date * * *13

Sec. 24. EFFECTIVE DATE14

This act shall take effect on July 1, 2014.15

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