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H.408

Introduced by   Representatives Kiss of Burlington, Donovan of Burlington, Dowland of Holland, Head of S. Burlington, Larson of Burlington, Leriche of Hardwick and Seibert of Norwich

Referred to Committee on

Date:

Subject:  Taxation; income tax; mortgage interest deduction

Statement of purpose:  This bill proposes to limit the amount of mortgage interest deduction available for Vermont income taxation.

AN ACT RELATING TO MORTGAGE INTEREST DEDUCTION CAP

It is hereby enacted by the General Assembly of the State of Vermont:

Sec. 1.  32 V.S.A. § 5811(21) is amended to read:

(21)  “Taxable income” means federal taxable income:

(A)  Increased by the following items of income (to the extent such income is excluded from federal adjusted gross income):

(i)  interest income from non-Vermont state and local obligations; and

(ii)  dividends or other distributions from any fund to the extent they are attributable to non-Vermont state or local obligations; and

(iii)  any amount of capital gain income which was deferred in a prior year under subdivision (B)(iii) of this subdivision (21), to be added in the taxable year of disposition of the taxpayer’s interest in the qualified business; and

(B)  Decreased by the following items of income (to the extent such income is included in federal adjusted gross income):

(i)  income from United States government obligations;

(ii)  40 percent of adjusted net capital gain income as defined in Section 1(h) of the Internal Revenue Code;

(iii)  60 percent of capital gain income that is invested in the taxable year, or (through filing an amended return) within two years of receipt, in an eligible venture capital investment under section 5930v of this title; and

(C)  Increased by the home mortgage interest itemized deduction claimed by the taxpayer for federal income tax purposes in the taxable year in excess of $20,000.00.

Sec. 2.  HOMELESSNESS PREVENTION SPECIAL FUND; CREATION

(a)  There is created the homelessness prevention special fund in the state treasury to provide financial resources to fund Vermont homelessness prevention programs and other housing services, including homeless shelters and other temporary housing, back rent programs, housing deposits and rental support consistent with the goal of housing as a basic right.

(b)  Revenues generated by the home mortgage deduction limitation under 32 V.S.A. § 5811(21)(C) as determined by the commissioner of taxes shall be deposited in the funds.  Proceeds from grants, donations, contributions, appropriations, and any other sources of revenue that may be provided by statute or rule may also be deposited in the fund. 

(c)  All monies received or generated by the fund shall be used for the purposes described in subsection (a) of this section.

Sec. 3.  EFFECTIVE DATE

This act shall apply to taxable years 2005 and after.



Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont


www.leg.state.vt.us