Introduced by Senator Illuzzi of Essex-Orleans District and Senator Starr of Essex-Orleans District
Subject: Taxation; income tax; property tax; incentives for wood products manufacture
Statement of purpose: This bill proposes to create an income tax credit and extend a property tax limitation for wood products manufacture.
AN ACT RELATING TO WOOD PRODUCTS INCOME TAX CREDIT AND EDUCATION PROPERTY TAX LIMITATION
It is hereby enacted by the General Assembly of the State of Vermont:
Sec. 1. STATEMENT OF PURPOSE
The general assembly finds that the economic vitality within certain adjacent counties in the state with the highest unemployment rates is dependent on a limited number of employers that manufacture finished wood products. In order to support the sustainability and vitality of the finished wood products industry, the general assembly further finds that income tax credits will provide financial assistance needed to maintain the economic well‑being of the communities that rely so heavily on this industry for the health of their economies.
Sec. 2. 32 V.S.A. § 5930y is added to read:
§ 5930y. Wood Products Manufacturer Credit
(a) The secretary of commerce and community development, annually on or before February 1, shall designate any two adjacent counties having at least five percent of their jobs provided by employers that manufacture finished wood products and having the highest unemployment rate in the state for at least one month in the previous calendar year. Upon making a designation, the secretary shall send a written notice to the commissioner of taxes identifying the designated counties.
(b) A credit against the income tax liability is available as follows:
(1) A credit of two percent of the wages paid in the taxable year by an employer for services performed in a designated county or an adjacent county associated with the manufacture of finished wood products. The credit shall be available to the employer in any year the county qualifies and for one year after a qualification ends.
(2) The credit, either alone or in combination with any other credit allowed by this chapter, shall not reduce the income tax liability of the employer by more than 80 percent.
(3) The recapture of development incentives established in subchapter 6 of chapter 47 of Title 3 shall apply to the tax credits in this section, except that the provisions of subsection 2512(c) of that title shall not apply to a business relocation outside the designated counties.
Sec. 3. Sec. 84 of No. 68 of the Acts of 2003 is amended to read:
Sec. 84. TRANSITION TAX RATES
Beginning in fiscal year
2005, a manufacturing business with at least 1,000 full‑time-equivalent
employees at two or fewer business locations in this state in fiscal year 2003,
shall, in any municipality in which the combined statewide and local share
education property tax rate in fiscal year 2003 was $1.45 or less, be subject
to education property tax under 32 V.S.A. § 5402(a)(1) at a rate equal to its
2003 education tax rate plus $0.04 for each year after 2004,
year 2008; at which time it shall be subject to but in no year shall its
education tax rate exceed the education property tax rate in that
municipality under subdivision 5402(a)(1) at the rate provided in that
subdivision as amended.
Sec. 4. EFFECTIVE DATE
Sec. 2 of this act (wood products manufacturer tax credit) shall apply to taxable years beginning on or after July 1, 2005.
The Vermont General Assembly
115 State Street