The bill S.312 proposes significant changes to the existing machinery and equipment investment tax credit in Vermont. It aims to convert the current nonrefundable credit into a refundable credit, allowing taxpayers to receive refunds for any excess credit beyond their tax liability. Additionally, the bill removes the previous limitations on how much the credit can reduce a taxpayer's income tax liability in a given year, effectively repealing the cap that restricted the credit to 80% of the tax liability. The sunset date for the credit is also extended from 2030 to 2034, providing a longer timeframe for taxpayers to benefit from this incentive.

Furthermore, the bill introduces new provisions that allow taxpayers to elect a refund of up to $500,000 if their credit exceeds their tax liability. It also mandates that certified taxpayers file annual reports detailing their employment levels, capital investments, and tax credits earned, with the reporting period extended to 2035. The effective date for these changes is set for January 1, 2027, applying to taxable years beginning on or after that date.

Statutes affected:
As Introduced: 32-5930ll