Introduced by Representative Obuchowski of Rockingham
Subject: Taxation; sales tax; beer exemption; Streamlined Sales and Use Tax Agreement; effective date; sales tax rate reduction
Statement of purpose: This bill proposes to exempt beer from the sales tax, which necessitates the exemption of wine from the sales tax, as well, under the Streamlined Sales and Use Tax Agreement. The bill also proposes to create a July 1, 2007 effective date for streamlined sales tax provisions and to use a portion of the additional revenue from streamlined sales tax compliance to reduce the sales tax rate.
AN ACT RELATING TO SALES TAX EXEMPTION FOR BEER AND SALES TAX RATE REDUCTION
It is hereby enacted by the General Assembly of the State of Vermont:
Sec. 1. LEGISLATIVE INTENT
It is the intent of the general assembly in Sec. 2 of this act to prevent the extension of the sales tax to beer, which also prevents application of the sales tax to wine; and in Secs. 3 through 5 of this act to use a portion of the additional revenues resulting from participation in the Streamlined Sales and Use Tax Agreement to reduce the sales and use tax rates, as anticipated by prior action of the general assembly in Sec. 30 of No. 68 of the Acts of 2003.
Sec. 2. AMENDMENT
The repeal of subdivision 9741(5) of Title 32 (sales tax exemption for malt beverages) in Sec. 58 of No. 68 of the Acts of 2003 is amended to read:
Sales of malt beverages
taxed or exempted under chapter 15 of Title 7. Sales of alcoholic
beverages containing one-half of one percent or more of alcohol by volume.
Sec. 3. REPORT
Because Vermont’s participation in the Streamlined Sales and Use Tax Agreement requires that Vermont treat all alcoholic beverages the same under the sales tax, a sales tax exemption for beer necessitates a sales tax exemption for wine, as well. In order to make this sales tax exemption for alcoholic beverages revenue‑neutral, the general assembly requests that by January 15, 2007, the commissioner of taxes, who has access to confidential information necessary to design a revenue‑neutral amendment, report to the house committee on ways and means. In the report, the commissioner shall present alternatives for replacing the wine sales tax revenue through:
(1) adjustments to the wholesalers’ tax on wine, on a gallonage basis and on a price basis;
(2) adjustments to the wholesalers’ tax on wine and beer, on a gallonage basis and on a price basis; and
(3) any other means which the commissioner may find appropriate.
Sec. 4. Sec. 27 of No. 152 of the Acts of 2004 is amended to read:
Sec. 27. Sec. 87(17) of No. 68 of the Acts of 2003 is amended to read:
Secs. 51-67, relating to streamlined sales tax provisions, including provisions
relating to alcoholic beverages, clothing, and $20.00 telecommunications
credit, and provisions relating to local option taxation of telecommunications
and exemption of clothing, shall take effect on the first day of the second
quarter following the date of Vermont’s membership in the multistate
streamlined sales and use tax agreement, but no earlier than
July 1, 2005
July 1, 2007.
Sec. 5. AMENDED STREAMLINED SALES TAX EFFECTIVE DATES
Effective dates in any act of the general assembly which are described as “the first day of the second quarter following the date of Vermont’s membership in the multistate Streamlined Sales and Use Tax Agreement, but no earlier than July 1, 2005,” are hereby amended to read: “the first day of the second quarter following the date of Vermont’s membership in the multistate Streamlined Sales and Use Tax Agreement, but no earlier than July 1, 2007.”
Sec. 6. 32 V.S.A. § 9771 is amended to read:
§ 9771. IMPOSITION OF SALES TAX
Except as otherwise provided in
this chapter, there is imposed a tax on retail sales in this state. The tax
shall be paid at the rate of
six 5.5 percent of the sales price
charged for the following:
* * *
Sec. 7. 32 V.S.A. § 9772 is amended to read:
Tax bracket schedule Amount of tax to be
(a) For the purpose of adding and collecting the tax
imposed by this chapter, or an amount equal as nearly as possible or
practicable to the average equivalent thereof, to be reimbursed to the vendor
by the purchaser, the
following formula shall be in force and effect as
follows: vendor shall use either the calculation in subdivision (1) of
this subsection or the formula in subdivision (2). The tax required to be
remitted shall be the rate specified in section 9771 of this title multiplied
by the total sales price of all the taxable transactions; provided, however,
the tax required to be remitted shall be no more than the amount required to be
collected. The vendor shall be entitled to retain any amount lawfully
collected by the person in excess of the tax imposed by this chapter.
(1) The total sales price of the transaction multiplied by the rate specified in section 9771 of this title carried to the third decimal place and rounded up to the nearest whole cent if the third decimal place is greater than four and rounded down to the nearest whole cent if the third decimal place is four or less. The tax may be computed on either the total invoice amount or on each taxable item.
(2) Amount of Sale Amount of Tax
No Tax 0.11-0.16
$0.01 - 0.09 No Tax
0.10 - 0.18 $0.01
0.19 - 0.36 $0.02
0.37 - 0.54 $0.03
0.55 - 0.72 $0.04
0.73 - 0.90 $0.05
0.91 - 1.00 $0.06
to a tax of $0.06 on each full dollar, a tax shall be collected on each part of
a dollar in excess of a full dollar in accordance with the following formula: $
0.01-0.16 $ .01 0.17-0.33
The commissioner shall publish brackets for sales prices greater than one dollar which will allow vendors to collect tax on each sale of 5.5 percent rounded to the next higher cent. When several taxable articles are purchased together at the same time, the tax shall be computed on the total amount of the sale of the several taxable items.
(b) The commissioner may adopt transition rules that comply with any applicable multistate agreement in the event of a rate change.
Sec. 8. 32 V.S.A. § 9773 is amended to read:
§ 9773. IMPOSITION OF COMPENSATING USE TAX
property has already been or will be subject to the sales tax under this
chapter, there is imposed on every person a use tax at the rate of
six 5.5 percent
for the use within this state, except as otherwise exempted under this chapter:
* * *
Sec. 9. EFFECTIVE DATE
This act shall take effect upon passage, except that Secs. 6 through 8 of this act (reduction of sales and use tax rates) shall take effect on the first day of the second quarter following the date of Vermont’s membership in the multistate Streamlined Sales and Use Tax Agreement, but no earlier than July 1, 2007.
The Vermont General Assembly
115 State Street