Introduced by Senator Dunne of Windsor District
Subject: Taxation; income tax; Vermont higher education investment plan
Statement of purpose: This bill proposes to maintain Vermont's income tax exemption for non‑Vermont plans when the federal exemption expires in 2011.
AN ACT RELATING TO THE VERMONT HIGHER EDUCATION INVESTMENT PLAN
It is hereby enacted by the General Assembly of the State of Vermont:
Sec. 1. 16 V.S.A. § 2879c(a) is amended to read:
(a) The assets of the Vermont higher education investment plan held by the corporation, and the assets of any similar plan qualified under Section 529 of the Internal Revenue Code and any income therefrom, shall be exempt from all taxation by the state or any of its political subdivisions. Income earned or received from the fund by any participant or beneficiary shall not be subject to state income tax and shall be eligible for any benefits provided in accordance with the investment plan provisions of the Internal Revenue Code. The exemption from taxation under this section shall apply only to assets and income maintained, accrued, or expended pursuant to the requirements of the Vermont higher education investment plan, the provisions of this subchapter, and the applicable provisions of the Internal Revenue Code. No exemption shall apply to assets and income expended for any other purposes. If the exclusion from gross income for federal income tax purposes under Section 529(c)(3)(B) for distributions for qualified higher education expenses becomes ineffective, the exclusion shall nonetheless apply for purposes of Vermont income tax.
Sec. 2. EFFECTIVE DATE
This act shall apply to taxable years beginning on or after January 1, 2011.
The Vermont General Assembly
115 State Street