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ACT NO. 159


Miscellaneous Tax Provisions; Vermont Economic Progress Council; Winooski Tax Increment Financing District

This act makes various changes to tax provisions; makes changes to law governing the Vermont Economic Progress Council; and authorizes a tax increment financing district in Winooski.

Effective Date: Various

Secs. 1-3. Tax credits for rehabilitation of historic buildings.

Allows the credits to be taken against bank franchise tax and insurance premiums tax, beginning with the 1999 tax year.

Secs. 4-18a. Vermont Economic Progress Council. Makes technical corrections to provisions of law relating to functions of VEPC; clarifies existing law; codifies the existing “but-for” test; improves basic program accountability; enhances public return on investment from the incentives programs.

Secs. 19-20. Income tax update. This is the annual update of the reference to Federal income tax laws.

Secs. 21-25. Mobile homes.

(a) Clarifies that members of a mobile home cooperative are taxed only once for their interest in the land upon which the mobile home is sited.

(b) Narrows the law that requires payment of the full year’s property taxes before transfer of a mobile home. Under the new law, the owner pays the taxes only if the mobile home will be removed from the municipality. Applies to transfers on or after July 1, 2000.

(c) Allows the board of abatement to abate property taxes if the mobile home is removed from the town due to the closure or change in use of a mobile home park.

Secs. 26-27. The Vermont Film Corporation is reenacted, and the sunset is repealed on the income tax exclusion for income from film production.

Secs. 28-31. Motor Vehicles. Effective July 1, 2000:

(a) Increases the cap on purchase and use tax for certain vehicles from $900.00 to $1,100.00. Removes the cap on motorcycles and limits the cap for trucks to heavyweight trucks.

(b) Corrects a typographical error.

(c) Exempts from the purchase and use tax any titles transferred back to the manufacturer under Vermont's Lemon Law.

Sec. 32. “Household income” study. Requires the Department of Taxes to recommend any changes regarding the inclusion of pension and annuity income in “household income”, for purposes of the prebate program.

Sec. 33. Downtown development investment. Requires encouragement of investment by individual investors.

Sec. 34. Retroactively allows Vermont Economic Progress Council incentives for certain food distribution businesses which had applied in 1999.

Secs. 35-36. Allows prebates for certain grantor trust beneficiaries, beginning in 2001.

Secs. 37-39. Approves a tax increment financing (TIF) district within the City of Winooski that permits municipal and education property taxes assessed upon the value added to the grand list after the commencement of redevelopment to be used for a period of up to twenty years to pay off the development bond issue. Also requires a study of the impact on general fund and education fund revenues, and how additional municipalities could use the same kind of TIF.

Sec. 40. Provides an affordable housing credit against Vermont income and bank franchise taxes, modeled on the federal low-income housing credit. The amount of credits which the State may authorize is $100,000.00 per year. After the fifth year (when the cumulative amount of credit authorized is $500,000.00), the cap on credits that may be authorized per year will remain at $500,000.00.