Introduced by Representatives Peterson of Williston, Pugh of S. Burlington, Allaire of Rutland City, Aswad of Burlington, Audette of S. Burlington, Brooks of Montpelier, Chen of Mendon, Deen of Westminster, DePoy of Rutland City, Donovan of Burlington, Fallar of Tinmouth, Head of S. Burlington, Keogh of Burlington, Kiss of Burlington, Larson of Burlington, Livingston of Manchester, Masland of Thetford, McCullough of Williston, Otterman of Topsham, Schiavone of Shelburne, Tracy of Burlington and Zuckerman of Burlington
Subject: Taxation; sales and use tax; local option
Statement of purpose: This bill proposes to extend with no sunset the local option sales tax to all towns.
AN ACT RELATING TO EXPANSION OF LOCAL OPTION SALES TAX
It is hereby enacted by the General Assembly of the State of Vermont:
Sec. 1. 24 V.S.A. § 138 is amended to read:
§ 138. LOCAL OPTION TAXES
option taxes are authorized under this section for the purpose of affording
municipalities an alternative method of raising municipal revenues.
facilitate the transition and reduce the dislocations in those municipalities
that may be caused by reforms to the method of financing public education under
the Equal Educational Opportunity Act of 1997. Accordingly: (1) the
local option taxes authorized under this section may be imposed by a
municipality only during calendar years 1999 through 2008; (2) a
municipality opting to impose a local option tax may do so prior to July 1,
1998 to be effective beginning January 1, 1999, and anytime after December 1,
1998 a local option tax shall be effective beginning on the next tax quarter
following 30 days' notice to the department of taxes of the imposition; and all
authority to opt to impose a local option tax under this section shall
terminate September 1, 2007, and all authority to impose a local option tax
shall terminate on December 31, 2008; and (2) a municipality
opting to impose a local option tax may do so prior to July 1, 1998 to be
effective beginning January 1, 1999, and anytime after December 1, 1998 a A
local option tax adopted under this section shall be effective beginning
on the next tax quarter following 90 days' notice to the department of taxes of
the imposition ; and all authority to opt to impose a local option tax under
this section shall terminate September 1, 2007, and all authority to impose a
local option tax shall terminate on December 31, 2008; and (3) a
local option tax may only be adopted by a municipality in which: (A) the
education property tax rate in 1997 was less than $1.10 per $100.00 of
equalized education property value; or (B) the
equalized grand list value of personal property, business machinery, inventory,
and equipment is at least ten percent of the equalized education grand list as
reported in the 1998 Annual Report of the Division of Property Valuation and
Review; or (C) the
combined education tax rate of the municipality will increase by 20 percent or
more in fiscal year 1999 or in fiscal year 2000 over the rate of the combined
education property tax in the previous fiscal year.
(b) If the legislative body of a municipality by a majority vote recommends, the voters of a municipality may, at an annual or special meeting warned for that purpose, by a majority vote of those present and voting, assess any or all of the following:
(1) a one percent sales tax;
(2) a one percent meals and alcoholic beverages tax;
(3) a one percent rooms tax.
(c) Any tax imposed under the authority of this section shall be collected and administered by the department of taxes, in accordance with state law governing such state tax or taxes; provided however, that a sales tax imposed under this section shall be collected on each sale that is subject to the Vermont sales tax using a destination basis for taxation. Seventy percent of the costs of administration and collection shall be borne by the municipality, and 30 percent shall be borne by the state to be paid from the pilot special fund.
(d) Of the taxes reported under this section, 80 percent shall be paid to the municipality in which they were reported for calendar year 1999, 70 percent shall be paid to the municipality in which they were reported for calendar years thereafter. Such revenues may be expended by the municipality for municipal services only and not for educational expenditures. The remaining amount of the taxes reported shall be remitted monthly to the state treasurer for deposit in the PILOT special fund established in Sec. 89 of No. 60 of the Acts of 1997. Amounts to be paid to a municipality under this section shall be reduced by five percent to reflect the difference between the amounts reported and collected. Taxes due to a municipality under this section, less the costs of administration and collection, shall be paid on a quarterly basis.
(e) As used in this section, "municipality" means a city, town, or incorporated village.
(f) Nothing in this section shall affect the validity of any existing provision of law or municipal charter authorizing a municipality to impose a tax similar to the local option taxes authorized in this section.
The Vermont General Assembly
115 State Street