Act No. 71 Page 1 of 3
2019
This act summary is provided for the convenience of the public and members of the
General Assembly. It is intended to provide a general summary of the act and may not be
exhaustive. It has been prepared by the staff of the Office of Legislative Council without
input from members of the General Assembly. It is not intended to aid in the
interpretation of legislation or to serve as a source of legislative intent.
Act No. 71 (H.541). Taxation and fees
An act relating to changes that affect the revenue of the State
This act:
• Capital Gains. Limits the amount of capital gains subject to the preferential
40% rate to a total gain amount of $350,000.00. Effective July 1, 2019.
• Medical Deductions. Provides a state deduction from personal taxable income
for medical expenses which is limited by the state standard deduction, the
state personal exemptions, and amount of the federal deduction resulting by
payments to a continuing care retirement community.
• Tax Credit for Affordable Housing/Down Payment Assistance Program:
o Allows the Vermont Housing Finance Agency (VHFA) to pool and
sell credits as one batch.
o Increases the down payment assistance credits by $125,000 and
extends the program from FY22 to FY26.
o Increases the homeownership creation and mobile home replacement
program by $125,000.
o Separates out the rental housing credit from the homeownership credit
and credits three separate credits for clarity.
• Downtown and Village Center Tax Credit:
o Amends the definition of “qualified applicant” to include religious
organizations.
o Amends the definition of “qualified building” as one that was built at
least 30 years before the date of the application.
o Increases total credit cap from $2,400,000 to $2,600,000.
o Requires credits be used within three years, instead of five.
o Increases maximum credits for certain elevators and eliminates the
credit for technology improvement projects.
• Estate tax:
o Increases the State exclusion from $2,750,000 to $5,000,000 by
January 1, 2021.
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2019
o Increases the exclusion in two steps:
▪ to $4,250,000 on January 1, 2020, and then
▪ to $5,000,000 on January 1, 2021.
• Rooms Tax:
o Includes “booking agents” in definition of “operator” and “rent” so
that whoever collects the rent for a sleeping accommodation must
collect and remit the rooms tax on the entire amount of rent they
collect.
o The effect would be to bring online travel companies and short term
rental platforms within the rooms tax.
• Property Transfer Tax:
o Changes the definitions to make it clear that the transfer of a
controlling interest in a legal entity that holds real property triggers
liability for the tax.
o A controlling interest is 50 percent or more of the controlling stock or
interest in the entity.
o The tax is applied to value of the property held by the entity,
apportioned to reflect the percentage of ownership interest that was
transferred.
o If more than one person is acting in concert, their interests are
aggregated for the purpose of determining a controlling interest and
their liability for the tax.
• Land gains tax:
o Changes definition of “land” so that the tax only applies to land that is
purchased and subdivided in the six years prior to the sale or
exchange.
o If a sale or exchange of property is for land that falls outside of this
definition, there is no obligation to file or withhold.
o Effective January 1, 2020.
• Fuel tax:
o Clarifies who the tax applies to in light of 2016 changes.
o Extends the sunset on the tax for five years to 2024.
• Health Information Technology. Extends the current health claims tax
revenue devoted to the Health Information Technology Fund for two
additional years, until July 1, 2021.
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2019
• Home Health Agencies. Extends the sunset on the home health agency
provider tax by two years, until July 1, 2021.
• Department of Taxes is to conduct outreach to technology community on the
use and potential taxation of prewritten software accessed remotely.
Multiple effective dates, beginning on January 1, 2019
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Statutes affected:
As Introduced: 32-5811, 32-5930u, 32-151, 32-11J, 32-7442a(b), 32-7442a, 32-9202, 32-9271, 32-9601, 32-9602, 32-9603, 32-9606(a), 32-9606, 32-9607, 32-9608(a), 32-9608, 32-9618, 32-10002, 33-2503, 33-1955a
As Passed By the House -- Official: 32-5811, 32-5930u, 32-151, 32-11J, 32-7442a(b), 32-7442a, 32-9202, 32-9271, 32-9601, 32-9602, 32-9603, 32-9606(a), 32-9606, 32-9607, 32-9608(a), 32-9608, 32-9618, 32-10002, 33-2503, 33-1955a
As Passed By the House -- Unofficial: 32-5811, 32-5930u, 32-151, 32-11J, 32-7442a(b), 32-7442a, 32-9202, 32-9271, 32-9601, 32-9602, 32-9603, 32-9606(a), 32-9606, 32-9607, 32-9608(a), 32-9608, 32-9618, 32-10002, 33-2503, 33-1955a
As Passed by Both House and Senate -- Official: 32-5811, 32-5930u, 32-151, 32-11J, 32-7442a(b), 32-7442a, 32-9202, 32-9271, 32-9601, 32-9602, 32-9603, 32-9606(a), 32-9606, 32-9607, 32-9608(a), 32-9608, 32-9618, 32-10002, 33-2503, 33-1955a, 32-5811(21)
As Passed by Both House and Senate -- Unofficial: 32-5811, 32-5811(21), 32-5930u, 32-151, 32-11J, 32-7442a(b), 32-7442a, 32-9202, 32-9271, 32-9601, 32-9602, 32-9603, 32-9606, 32-9607, 32-9608(a), 32-9608, 32-9618, 32-10002, 33-2503, 33-1955a
As Enacted: 32-5811, 32-5811(21), 32-5930u, 32-151, 32-11J, 32-7442a(b), 32-7442a, 32-9202, 32-9271, 32-9601, 32-9602, 32-9603, 32-9606, 32-9607, 32-9608(a), 32-9608, 32-9618, 32-10002, 33-2503, 33-1955a