Act No. 72 Page 1 of 3
2023
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 Counsel 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. 72 (H. 471). An act relating to technical and administrative changes to Vermont’s
tax laws
Subjects: Sales and use tax; use value appraisal; property transfer tax; meals and
rooms tax; personal income tax; property valuation
This act makes multiple technical and administrative changes to Vermont’s tax laws,
including:
• conforming to the federal income and estate tax statutes in effect on December
31, 2022 for taxable years beginning on and after January 1, 2022;
• clarifying the sales and use tax and meals and use treatment of alcoholic
beverages that are produced or manufactured by a licensed restaurant or
operator and sold in sealed containers for consumption off premises;
• adding a requirement that meals and rooms tax must be shown to have been
paid back to a purchaser before an operator may request a refund of meals and
rooms tax paid from the Vermont Department of Taxes, and clarifying that
purchasers are authorized to request a refund from the Department;
• adding a requirement that if the Commissioner of Taxes determines local
option tax was erroneously collected in a town without a local option tax, the
Commissioner must either refund the over-collected tax to the purchaser or
operator or, if the purchaser cannot reasonably be determined, deposit the over-
collected local option tax as required for State sales and use tax (to Education
Fund) or State meals and rooms tax (Education Fund, General Fund, Clean
Water Fund);
• extending the sunset of the sales and use tax exemption for advanced wood
boilers by one year, from July 1, 2023 until July 1, 2024;
• repealing the Computer Assisted Property Tax Administration Program
(CAPTAP), associated per parcel fees, special fund, and any reference to
CAPTAP in statute;
• allowing the Director of Property Valuation and Review to communicate
current use notices by means other than mail;
• creating a land use change tax exemption for land owned or acquired by a
Native American tribe or a nonprofit organization organized for the tribe’s
benefit and controlled by the tribe that qualifies for a property tax exemption;
• creating a property transfer tax and clean water surcharge exemption for
transfers of property between related 501(c)(3) nonprofit organizations;
• removing the requirement that child and dependent care be provided in
Vermont to be eligible for a Vermont Child and Dependent Care Tax Credit;
• allowing individuals without tax identification numbers to claim the Vermont
Earned Income Tax Credit and the Vermont Child Tax Credit and requiring the
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Commissioner of Taxes to set up a process for individuals without tax
identification numbers to claim the credits;
• requiring the Commissioner of Taxes to set up a program to make advance
quarterly payments of half of the Vermont Child Tax Credit when federal legal
action excludes recurring refundable State tax credits from federal benefit
determinations;
• correcting the composite payment rate for S corporations, partnerships, and
limited liability companies with nonresident members from the middle
marginal personal income tax rate to the second-highest personal income tax
rate;
• allowing the Vermont Housing Finance Agency (VHFA) to renew certificates
of exemption for qualified rent-restricted residential rental units every 10 years
if VFHA finds that the property continues to meet the exemption requirements;
• extending the homestead property tax credit claim filing deadline from a final
date of October 15 to March 15 of the following calendar year; and
• regarding tax increment financing (TIF) districts:
o adding to the definition of “improvements” by allowing a municipality
to use the proceeds of debt to pay for debt service interest payments for
up to two years from the date the district incurs its first debt;
o allowing for a municipality to use bond anticipation notes provided that
they are not considered a first incurrence of debt;
o requiring that no adjustments be made to a TIF district after the TIF
district plan has been approved;
o addressing how to handle decrement in a TIF district;
o clarifying that increment is held apart regardless of whether the
assessed valued exceeds the OTV;
o requiring that a municipality remit not less than the aggregate tax due
on the OTV each year to the Ed Fund;
o clarifying that for a municipality with a TIF district and a tax
stabilization agreement that the municipal and education property tax
increment for the properties in the TIF district shall be calculated based
on the assessed value of the properties and not the stabilized value;
o removing the authority for the Emergency Board to approve a TIF
district when the General Assembly is not in session;
o extending authority of the City of Barre to incur indebtedness for its
TIF district to March 31, 2026 and authority to retain increment until
June 30, 2039; and
o extending authority of Town of Hartford to incur indebtedness for its
TIF district to March 31, 2026 and authority to retain increment until
June 30, 2036.
This act requires two reports to the General Assembly. First, this act directs the
Vermont Department of Taxes to submit a report by January 15, 2024 regarding refund
notices to purchasers who overpaid sales and use tax, meals and rooms tax, or local
option tax. Second, this act directs the Legislative Joint Fiscal Office to submit a report
or an issue brief, or to contract with a consultant to perform the research and draft the
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report, by January 15, 2024 on financing public infrastructure improvements in Vermont
municipalities.
This act also makes numerous changes regarding the Vermont Bond Bank, the
Vermont Employment Growth Incentive (VEGI), Workers’ Compensation, and
Unemployment Insurance. With regard to the Bond Bank, this act amends the Bond
Bank’s enabling chapter to expand the types of financing arrangements the Bank is
authorized to make to allow different forms of loans to be made to municipalities for
energy efficiency and renewable infrastructure projects. This act also makes global
changes throughout Bond Bank statute to change name of Bank from the “Municipal
Bond Bank” to the “Vermont Bond Bank.”
With regard to the Vermont Employment Growth Incentive (VEGI), this act extends
the sunset for the Vermont Economic Progress Council to accept or approve applications
for an employment growth incentive from Jan. 1, 2024 to Jan. 1, 2025.
With regard to Workers’ Compensation, this act sets the rate of contribution to the
Workers’ Compensation Administrative Fund for direct calendar year premiums for
Workers’ Compensation in fiscal year 2024. This act adds a new provision that will
maintain the previous year’s rate of contribution to the Workers’ Compensation
Administrative Fund if the General Assembly fails to adopt a new rate. This act also
makes permanent a provision permitting workers to obtain a 14-day extension of
workers’ compensation benefits upon receipt of notice of the employer’s intent to
discontinue the benefits.
With regard to Unemployment Insurance, this act amends the prospective repeal of an
Unemployment Insurance benefit increase to correct an arithmetic error in the language.
Effective Date: Multiple effective dates beginning on January 1, 2023
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Statutes affected:
As Introduced: 32-5824, 32-7402(8), 32-7402, 32-9741, 32-9202, 32-9245, 24-138(c), 24-138, 32-3404, 32-3410, 32-3756, 32-9603, 32-5828c, 32-5404a(a), 32-5404a, 32-6065, 32-6068
As Passed By the House -- Official: 32-5824, 32-7402(8), 32-7402, 32-9741, 32-9202, 32-9245, 24-138(c), 24-138, 32-3404, 32-3410, 32-3756, 32-9603, 32-5828c, 32-5404a(a), 32-5404a, 32-6065, 32-6068
As Passed By the House -- Unofficial: 32-5824, 32-7402(8), 32-7402, 32-9741, 32-9202, 32-9245, 24-138(c), 24-138, 32-3404, 32-3410, 32-3756, 32-9603, 32-5828c, 32-5404a(a), 32-5404a, 32-6065, 32-6068
As Passed by Both House and Senate -- Official: 32-5824, 32-7402(8), 32-7402, 32-9741, 32-9202, 32-9245, 24-138(c), 24-138, 32-3404, 32-3410, 32-3756, 32-9603, 32-5828c, 32-5404a(a), 32-5404a, 32-6065, 32-6068, 32-5828b(a), 32-5828b, 32-5830f(a), 32-5830f, 32-5914(b), 32-5914, 32-5920(b), 32-5920, 24-4551, 24-4571, 24-4571a, 24-4592, 24-4652, 24-4676, 24-4683, 24-4703, 24-1891, 24-1895, 24-1896, 21-711
As Passed by Both House and Senate -- Unofficial: 32-5824, 32-7402(8), 32-7402, 32-9741, 32-9202, 32-9245, 24-138(c), 24-138, 32-3404, 32-3410, 32-3756, 32-9603, 32-5828c, 32-5828b(a), 32-5828b, 32-5830f(a), 32-5830f, 32-5914(b), 32-5914, 32-5920(b), 32-5920, 32-5404a(a), 32-5404a, 32-6068, 24-4551, 24-4571, 24-4571a, 24-4592, 24-4652, 24-4676, 24-4683, 24-4703, 24-1891, 24-1895, 24-1896, 21-711
As Enacted: 32-5824, 32-7402(8), 32-7402, 32-9741, 32-9202, 32-9245, 24-138(c), 24-138, 32-3404, 32-3410, 32-3756, 32-9603, 32-5828c, 32-5828b(a), 32-5828b, 32-5830f(a), 32-5830f, 32-5914(b), 32-5914, 32-5920(b), 32-5920, 32-5404a(a), 32-5404a, 32-6068, 24-4551, 24-4571, 24-4571a, 24-4592, 24-4652, 24-4676, 24-4683, 24-4703, 24-1891, 24-1895, 24-1896, 21-711