Taxes and Fees - What's Changed

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The primary job of the House Committee on Ways and Means is to identify the means by which the state can fund what the Appropriations Committee expends. The two committees work together. The stated policy of the W & M committee is "to broaden the tax base were practicable, while keeping impacts moderate. When new or increased taxes are necessary, Ways and Means endeavor to target them appropriately."

Market Based Sourcing vs. Cost of Performance

Changes in the way companies do business is changing the way they are taxed. Many companies in Vermont perform services for people and companies outside the state. Who pays the tax on those products? The Vermont company or the purchaser? W & M spent some time this session looking into changing Vermont taxing regulations to Market Based Sourcing which will reduce the state tax burden on Vermont companies by moving the tax to the those that are receiving the good or service. At least 20 other states have moved to Market Based Sourcing. When the next session begins in January this topic will again be subject to discussion and possible legislation.

Clean Water Funding

For several years the legislature has been trying to identify a consistent source of funds for the state Clean Water Initiative. The state spends a total of about $50 million a year for hundreds of large and small water related projects throughout the state. That money comes from various sources:

  • Capital Bill - sale of the state's general obligation bonds - $11 to $12 million
  • Transportation Fund - Federal Portion - about $21 million
  • Transportation Fund - State Portion - about $1.7 million
  • General Fund - $450,000
  • Clean Water Fund
    • 2% of Property Transfer Tax - $5 million
    • Echeats from bottle returns - $1 million
    • PPTS carry forward - $1.1 million

The sum of those amounts is about $42 million. In dispute throughout the session was where that $8 million difference between what is to be spent and expected revenues would come from. The Governor proposed finding it in changes to the estate tax. W & M didn't like that, but had to come up with an alternative. Close to the end of the session the General Assembly passed S.96 which took 6% of the revenues from the state's Meals and Rooms tax to cover most of the $8 million needed.

Marijuana

Several Marijuana Tax and Regulate bills were introduced during the session (H.196 and S.54). S.54 came closest to being passed by both the House and the Senate, but at the end of the session it remained in House W & M and will await action in January of 2020.

Increase in Home Weatherization Program

The controversial doubling (from 2 cents to 4 cents a gallon) of the state tax on heating fuels in H.439 did not make it out of the General Assembly. It remains in the Senate Finance committee.

Remote Facilitators

Following a US Supreme Court decision the state has been able to tax purchased from Amazon and other such out-of-state retailers. However, Amazon also facilitates sales by many other companies. Those sales have not been taxed, but will be now.

The Revenue Bill

H.514 made some changes to Vermont's taxing policies and procedures, but did not significantly alter current tax code.

Paid Family and Medical Leave

W & M put considerable effort into H.107 dealing with Paid Family and Medical Leave, but it fell victim to the end of session negotiations between the House and Senate and remains in limbo until January of 2020 when the House will look at what the Senate has done to it.

Fees

Last biennium the Governor did not propose any changes to state fees for various licenses, permits, certifications etc. This year the administration did proposed changes. They are listed here.