Bill H.135, introduced by Representative Canfield, proposes several updates to Vermont's tax laws, including the adoption of federal income tax changes effective December 31, 2024. A significant amendment requires that spouses or surviving spouses must file a joint Vermont personal income tax return if they file jointly at the federal level, unless otherwise permitted by the Commissioner. The bill also revises definitions related to the tobacco products tax, increases compensation for property tax hearing officers, and adjusts eligibility criteria for tax credits such as the Vermont Child Tax Credit and the Earned Income Tax Credit to align more closely with federal standards.

Additionally, the bill provides financial relief to municipalities affected by flooding declared a federal disaster between July 1, 2023, and December 31, 2024, allowing them to be reimbursed for unanticipated interest expenses incurred from borrowing funds for state education property tax payments, capped at eight percent of reasonable interest expenses. It also modifies provisions regarding property tax credit claims, removing the previous allowance for municipalities to retain $15.00 for late claims and instead permitting them to retain 0.225% of the total education tax collected, contingent upon timely remittance. The annual cap on tax credits awarded by the State Board is increased from $3,000,000 to $5,000,000, and the act is set to take effect upon passage, with certain sections having retroactive applicability.

Statutes affected:
As Introduced: 32-5824, 32-7402, 32-5861(c), 32-5861, 32-5830f, 32-5828b, 32-5811(21), 32-5811, 32-5830e, 32-7702, 32-4465, 32-5402(c)(2), 32-5402, 32-5402(c), 32-5930ee