The bill H.766 proposes the introduction of a local option tax for municipalities in Vermont, specifically targeting sales of gasoline and diesel fuel. It amends current law to allow municipalities to impose a tax of $0.01 per gallon on both gasoline and diesel fuel sold or delivered by distributors. This new tax is in addition to existing local option taxes, which include a one percent sales tax, meals and alcoholic beverages tax, and rooms tax. The bill outlines the collection and administration of these taxes, stating that while the Department of Taxes will manage the existing taxes, the Department of Motor Vehicles will oversee the new fuel taxes.

Additionally, the bill includes provisions for the distribution of tax revenues, stipulating that 75% of the collected taxes will be returned to the municipalities for municipal services, while the remaining funds will go into the PILOT Special Fund. It also establishes a limit on the number of municipalities that can enact this local option tax to five per calendar year, with the Commissioner of Taxes required to consult with the Commissioner of Motor Vehicles regarding the new fuel taxes. The act is set to take effect on January 1, 2027.

Statutes affected:
As Introduced: 24-138