H.759 is a proposed bill aimed at simplifying Vermont's tax system by repealing various existing taxes and replacing them with a flat income tax rate of 13% for individuals, estates, and trusts. The bill highlights the complexity and burdensome nature of the current tax structure, which it argues hinders economic growth and fairness. To address potential regressive impacts, the bill includes targeted relief for low-income households and support for rural communities, along with a balanced transition plan to phase out existing taxes. Significant tax types to be repealed include local option tax, education property tax, estate and gift taxes, sales and use tax, and corporate income tax.

Additionally, H.759 introduces a new refundable tax credit for low-income residents, allowing those with a federal adjusted gross income at or below 150% of the federal poverty level to receive a credit against their tax liability, capped at either 50% of their tax liability or $1,000, with annual inflation adjustments starting in 2025. The bill also repeals several existing personal income tax credits to streamline the tax credit system. It establishes a framework for annual transfers from the General Fund to the Education Fund and the Transportation Fund, including up to $100 million for a local education stabilization fund. Furthermore, it mandates the Commissioner of Taxes to submit an annual revenue report and outlines a process for tax rate adjustments requiring a two-thirds majority in both legislative chambers and a statewide vote for amendments after January 1, 2027. Various sections of the bill will take effect upon passage or on January 1, 2027.

Statutes affected:
As Introduced: 24-138, 32-219, 32-215, 32-231, 32-233, 32-236, 32-237, 32-243, 32-246, 33-2503, 32-5811(21), 32-5811, 32-5822, 32-151, 32-5828b, 32-5828c, 32-5830b, 32-5830f, 32-5830g, 32-225