AN ACT RELATING TO MISCELLANEOUS TAX AMENDMENTS
It is hereby enacted by the General Assembly of the State of Vermont:
* * * Sales Tax and Use * * *
Sec. 1. 32 V.S.A. § 9707 is amended to read:
§ 9707. Registration
(a) Before commencing business or opening new places of business, every person required to collect any tax imposed by this chapter and every person purchasing tangible personal property for resale shall apply for a license in the manner prescribed by the commissioner. The commissioner shall issue, without charge, to each registrant a license empowering him or her to collect the tax. Each license shall state the place of business to which it is applicable. The license shall be prominently displayed in the place of business of the registrant. A registrant who has no regular place of doing business shall attach the license to his or her cart, stand, truck, or other merchandising device, or carry it on his or her person. The licenses shall be nonassignable and nontransferable and shall be surrendered to the commissioner immediately upon the registrant’s ceasing to do business at the place named.
(b) No later than one business day prior to an event at which taxable sales will be made by vendors who have no permanent place of business in the state, the promoter of the event shall provide to the commissioner a list of vendors who are authorized by the promoter to sell taxable property at the event and the vendors’ current sales tax license numbers. No later than one week after the event the promoter shall notify the department in writing of any changes to the list of participating vendors and their sales tax license numbers. In this subsection, “event” means a specific time and location at which 25 or more vendors are authorized by the promoter to sell taxable items.
(c) Any person who is not otherwise required to collect any tax imposed by this chapter and who makes sales to persons within the state of tangible personal property or services, the use of which is subject to tax under this chapter, may register with the commissioner who may, in his or her discretion and subject to such conditions as he or she may impose, issue to him or her a certificate of authority to collect the compensating use tax imposed by this chapter.
Sec. 2. 32 V.S.A. § 9741(38) is amended to read:
Retail sales and use of the following shall be exempt from the tax on retail sales imposed under section 9771 of this title and the use tax imposed under section 9773 of this title.
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(38) Tax on the
or use of a tracked vehicle shall not exceed $900.00 $1,100.00.
Sec. 2a. STUDY ON TRACKED VEHICLE SALES TAX CAP
The commissioner of taxes shall study the advisability of indexing the tracked vehicle sales and use tax cap for inflation, and shall report his recommendation to the house committee on ways and means and senate committee on finance by January 15, 2006.
Sec. 2b. 32 V.S.A. § 9741(38) is amended to read:
(38) Tax on the sale or use of a tracked vehicle shall not exceed $1,100.00 adjusted as follows: As of July 1 of each even‑numbered year, the commissioner shall adjust the most recent unrounded cap amount by the cumulative inflation index for the prior two calendar years under the consumer price index for urban consumer all items, and round that amount to the nearest ten dollars, and shall publish this rounded amount as the new cap.
Sec. 3. STUDY OF PURCHASE AND USE TAX CAP INFLATION INDEX
The commissioner of motor vehicles shall study the advisability of indexing the cap on purchase and use tax for inflation, and shall report her recommendation to the house committee on ways and means and senate committee on finance by January 15, 2006.
Sec. 4. NET OPERATING LOSS STUDY
The department of taxes, with the assistance of the joint fiscal office, shall study the possible effects of amending the law to allow 50 percent of federal corporate net operating loss carrybacks and carryforwards to be carried forward in Vermont, based on loss‑year apportionment factors, for a period of up to ten years, beginning with the 2007 taxable year, and of phasing the allowable percentage up from 50 percent to 100 percent by 2010. In analyzing the proposed change, the study group shall quantify the effects upon the general fund, compare the tax liabilities of corporate taxpayers under the current system and under the proposed change, analyze the interaction of the net operating loss carryforward law and unitary combined reporting, and compare the proposed change to other states’ corporate net operating loss provisions; and shall report its findings and any proposed legislation to the house committee on ways and means and senate committee on finance by January 15, 2006.
Sec. 5. Sec. 62 of No. 143 of the Acts of the 2001 Adj. Sess. (2002) is amended to read:
Sec. 62. Sec. 277 of No. 62 of the Acts of 1999 is amended to read:
Sec. 277. EFFECTIVE DATES
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(c) Sec. 272 shall be effective on passage
, and the
provisions in Sec. 272 providing a property transfer tax exemption shall be
repealed on July
Sec. 6. 32 V.S.A. § 3481(1) is amended to read:
§ 3481. DEFINITIONS
The following definitions shall apply in this Part and chapter 101 of this title, pertaining to the listing of property for taxation:
value” shall mean, with respect to property enrolled in a use value appraisal
program, the use value appraisal as defined in
3752(12) of this title, multiplied by the common level of appraisal, and with
respect to all other property, the estimated fair market value. The estimated
fair market value of a property is the price which the property will bring in
the market when offered for sale and purchased by another, taking into
consideration all the elements of the availability of the property, its use
both potential and prospective, any functional deficiencies, and all other
elements such as age and condition which combine to give property a market
elements shall include a consideration of a decrease in value in non‑rental
residential property due to a housing subsidy covenant as defined in
section 610 of Title 27, or the effect of any state or local law or regulation
affecting the use of land, including but not limited to chapter 151 of Title 10
or any land capability plan established in furtherance or implementation
thereof, rules adopted by the state board of health and any local or regional
zoning ordinances or development plans. In determining estimated
fair market value, the sale price of the property in question is one element to
consider, but is not solely determinative.
For residential rental property that is subject to a housing subsidy covenant or other legal restriction, imposed by a governmental, quasi‑governmental, or public purpose entity, on rents that may be charged, fair market value shall be determined by an income approach using the following elements:
(A) market rents with utility allowance adjustments for the geographic area in which the property is located as determined by the federal office of Housing and Urban Development;
(B) actual expenses incurred with respect to the property as provided by the property owner and certified by an independent third party;
(C) a vacancy rate that is 50 percent of the market vacancy rate as determined by the United States Census Bureau with local review by the Vermont housing finance agency; and
(D) a capitalization rate that is typical for the geographic area determined and published annually prior to April 1 by the division of property valuation and review after consultation with the Vermont housing finance agency.
Sec. 7. 32 V.S.A. § 5930u(a)(5) and (c) are amended to read:
(5) “Credit certificate” means a certificate issued by the allocating agency to a taxpayer that specifies the amount of affordable housing tax credits that can be applied against the taxpayer’s individual or corporate income tax or franchise or insurance premium tax liability as provided in this subchapter.
Amount of credit. A taxpayer who makes an eligible cash contribution shall be
entitled to claim against the taxpayer’s individual income, corporate,
franchise, or insurance premium tax liability a credit in an
amount specified on the taxpayer’s credit certificate.
Sec. 8. INCOME TAX CREDIT ALTERNATIVE FOR NONPROFIT
A nonprofit organization which was issued an income tax credit under 32 V.S.A. § 5930p or 5930q before January 1, 2005, and which was unable to apply the credit to an income tax liability or to a mortgage debt related to the qualified building, may transfer the tax credit allocation to a bank, which may accept it in return for cash. A bank which purchases a credit allocation under this provision may use it to reduce its bank franchise tax liability under 32 V.S.A. § 5836 for taxable year 2006.
Sec. 9. [Deleted]
Sec. 10. [Deleted]
Sec. 11. EFFECTIVE DATES
(a) This section shall take effect upon passage.
(b) Sec. 1 of this act (promoter’s list of vendors at an event) shall take effect upon passage.
(c) Sec. 2 of this act ($1,100.00 cap on sales tax for tracked vehicles) shall apply to sales on and after July 1, 2005; Sec. 2a of this act (tracked vehicle tax cap study) shall take effect upon passage; Sec. 2b of this act (inflation index applied to tracked vehicle tax cap) shall take effect July 1, 2006 and the first adjustment of the cap for inflation shall be July 1, 2006.
(d) Sec. 3 of this act (study of purchase and use tax cap inflation index) shall take effect upon passage.
(e) Sec. 4 of this act (net operating loss study) shall take effect upon passage.
(f) Sec. 5 of this act (repeal of sunset of property transfer tax exemption for VHFA-financed housing) shall take effect upon passage.
(g) Sec. 6 of this act (method for appraising affordable housing) shall apply to grand lists of April 1, 2006, and after.
(h) Sec. 7 of this act (extension of affordable housing tax credits to insurance premiums tax) shall take effect upon passage.
(i) Sec. 8 of this act (tax credit alternative for nonprofit entities with building rehabilitation credits and no mortgage debt) shall take effect upon passage.
Sec. 12. 32 V.S.A. § 5406(c) is amended to read:
If the director of property valuation and review certifies that a municipality
has completed a townwide reappraisal, the common level of appraisal for that
municipality shall be equal to its new grand list value divided by its most
recent equalized grand list value, for purposes of determining education
property tax rates
, education property tax liabilities, and income
sensitivity claims relating to the fiscal year designated by the director.
Sec. 13. 32 V.S.A. § 9819(d)(2) is amended to read:
The board shall review the joint application. If the project meets the
requirements of this section and the requested allocation does not exceed the
statutory limit set by this section, the board shall approve the application
and forward it to the commissioner of taxes who may authorize an allocation up
to the approved amount. Fifty percent of the authorized allocation shall be
paid to the municipality
upon commencement of when construction is
50 percent complete as determined by the board, and the balance shall be
paid after completion of the project.
Sec. 14. Sec. 15(d) of No. 14 of the Acts of 2005 is amended to read:
Sec. 9 (simplification of designated downtown sales tax allocation formula)
shall take effect with respect to applications submitted after
July June 1,
Sec. 15. 32 V.S.A. § 5822(d) is amended to read:
taxpayer shall be entitled to a credit against the tax imposed under this
section of 24 percent of each of the credits allowed against the taxpayer’s
federal income tax for the taxable year as follows:
credit elderly and permanently totally disabled credit, investment
tax credit, and child care and dependent care credits.
Sec. 16. REPEAL
Effective upon passage, 32 V.S.A. §§ 5926 (expired credit for new jobs in a development zone), 5927, and 5928 (expired research and development credit) are repealed.
Sec. 17. EFFECTIVE DATES
This section and Secs. 12 through 16 of this act (technical changes) shall take effect upon passage.
Sec. 18. 10 V.S.A. § 611(b), (c), (d), (e), (g), and (h) are amended to read:
The agency shall consist of
seven nine commissioners, including
ex officio the commissioner of banking, insurance, securities, and health care
administration, the state treasurer, the secretary of commerce and community
development, the executive director of the Vermont housing and conservation
board or their designees, and four five commissioners, who
shall be residents of the state, and who shall in the opinion of the governor with
consideration of statewide geographic representation be knowledgeable in
housing, finance, and financial planning or other related areas, to be
appointed by the governor with the advice and consent of the senate for terms
of four years. The terms of the four commissioners initially appointed by
the governor, however, shall end on the first day of February in 1975, 1976,
1977 and 1978. Any vacancies in the membership of the agency shall be
filled in like manner but only for the remainder of an unexpired term. Each
commissioner shall hold office for the term of his or her appointment
and until his or her successor is appointed and qualified. A
commissioner appointed by the governor may be removed from office by the
governor for misfeasance, malfeasance, or willful neglect of duty or
other cause after notice and public hearing unless such notice or hearing is
expressly waived in writing.
The governor shall designate annually a
chairman chair of the
agency from among the commissioners. The commissioners shall elect from among
their number a vice-chairman vice chair annually and such other
officers as they may determine. Meetings shall be held at the call of the chairman
chair or whenever two commissioners so request. Four Five
commissioners of the agency shall constitute a quorum, and any action
taken by the agency under the provisions of this chapter may be authorized by
resolution approved by a majority but not less than three four of
the commissioners present at any regular or special meeting. Resolutions of
the agency shall be made available to the public. No vacancy in the membership
of the agency shall impair the right of a quorum to exercise all the rights and
perform all the duties of the agency.
Commissioners other than ex officio members shall receive
$30.00 per day
compensation authorized under section 1010 of Title 32 for each day
spent in the performance of their duties and each such commissioner shall be
reimbursed from the funds of the agency for his or her reasonable
expenses incurred in carrying out his or her duties under this chapter.
(e) Notwithstanding the provisions of any other law, no officer or employee of this state shall be deemed to have forfeited or shall forfeit his or her office or employment by reason of his or her acceptance of membership of the agency or his or her service thereto.
The secretary shall keep a record of the proceedings of the agency and shall be
custodian of all books, documents and papers filed with the agency and of its
minute book and seal.
He The secretary shall have authority to
cause to be made copies of all minutes and other records and documents of the
agency and to give certificates under the seal of the agency to the effect that
the copies are true copies and all persons dealing with the agency may rely
upon those certificates.
(h) Before entering into his or her duties, each commissioner of the agency shall take and subscribe an oath to perform the duties of his or her office faithfully, impartially, and justly to the best of his or her ability. A record of the oath shall be filed in the office of the secretary of state.
Sec. 19. 10 V.S.A. § 631(k) is added to read:
(k) Interest rate exchange agreements. The agency may enter into one or more agreements for the exchange of interest rates, cash flows, or payments to reduce net borrowing costs, achieve desirable net effective interest rates in connection with its issuance and sale of debt obligations and to provide for an efficient means of debt management.
Sec. 20. 10 V.S.A. § 637 is amended to read:
§ 637. SOVEREIGN IMMUNITY, CREDIT OF STATE NOT PLEDGED
The agency shall have the benefit of sovereign immunity to the same extent as the state of Vermont. Commissioners, officers, employees, and the executive director of the agency shall be deemed employees of the state for purposes of 12 V.S.A. chapter 189 (tort claims against state) and 3 V.S.A. chapter 29 (claims against state employees). Notwithstanding the foregoing, obligations issued under the provisions of this chapter shall not be deemed to constitute a debt or liability or obligation of the state or of any political subdivision thereof or a pledge of the faith and credit of the state or of any political subdivision but shall be payable solely from the revenues or assets of the agency. Each obligation issued under this chapter shall contain on the face thereof a statement to the effect that the agency shall not be obligated to pay the same nor the interest thereon except from the revenues or assets pledged therefor and that neither the faith and credit nor the taxing power of the state or of any political subdivision thereof is pledged to the payment of the principal of or the interest on such obligations.
Sec. 21. 32 V.S.A. § 9701 is amended to read:
§ 9701. DEFINITIONS
Unless the context in which they occur requires otherwise, the following terms when used in this chapter mean:
* * *
Telecommunications service: means
intrastate and interstate
telecommunications services as defined in 30 V.S.A. § 7501. the
electronic transmission, conveyance, or routing of voice, data, audio, video,
or any other information or signals to a point, or between or among points.
The term “telecommunications service” includes such transmission, conveyance,
or routing in which computer processing applications are used to act on the
form, code, or protocol of the content for purposes of transmission,
conveyance, or routing without regard to whether such service is referred to as
voice‑over internet protocol services or is classified by the Federal
Communications Commission as enhanced or value added. Telecommunications
service does not include:
(A) Data processing and information services that allow data to be generated, acquired, stored, processed, or retrieved and delivered by an electronic transmission to a purchaser where such purchaser’s primary purpose for the underlying transaction is the processed data or information;
(B) Installation or maintenance of wiring or equipment on a customer’s premises;
(C) Tangible personal property;
(D) Advertising, including but not limited to directory advertising;
(E) Billing and collection services provided to third parties;
(F) Internet access service;
(G) Radio and television audio and video programming services, regardless of the medium, including the furnishing of transmission, conveyance, and routing of such services by the programming service provider. Radio and television audio and video programming services shall include but not be limited to cable service as defined in 47 U.S.C. § 522(6) and audio and video programming services delivered by commercial mobile radio service providers, as defined in 47 C.F.R. § 20.3;
(H) Ancillary services; or
(I) Digital products delivered electronically, including but not limited to software, music, video, reading materials, or ring tones.
* * *
(38) Paging service: means a telecommunications service that provides transmission of coded radio signals for the purpose of activating specific pagers; such transmissions may include messages and/or sounds.
(39) Private communications service: means a telecommunications service that entitles the customer to exclusive or priority use of a communications channel or group of channels between or among termination points, regardless of the manner in which such channel or channels are connected, and includes switching capacity, extension lines, stations, and any other associated services that are provided in connection with the use of such channel or channels.
(40) Value-added non-voice data service: means a service that otherwise meets the definition of telecommunications service in which computer processing applications are used to act on the form, content, code, or protocol of the information or data primarily for a purpose other than transmission, conveyance, or routing.
(41) Coin-operated telephone service: means a telecommunications service paid for by inserting money into a telephone accepting direct deposits of money to operate.
(42) Ancillary services: means services that are associated with or incidental to the provision of telecommunications services, including but not limited to detailed telecommunications billing, directory assistance, vertical service, and voice mail services.
(43) Telecommunication nonrecurring charges: means an amount billed for the installation, connection, change or initiation of telecommunications service received by the customer.
(44) Directory assistance: means an ancillary service of providing telephone number information, or address information, or both.
Sec. 22. 32 V.S.A. § 9741 is amended to read:
§ 9741. SALES NOT COVERED
Retail sales and use of the following shall be exempt from the tax on retail sales imposed under section 9771 of this title and the use tax imposed under section 9773 of this title.
* * *
Charges paid by inserting coins in coin-operated telecommunications service
Sec. 23. 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 percent of the sales price charged for the following:
* * *
(5) Telecommunications service except coin-operated telephone service, paging service, private communications service, or value-added non-voice data service.
Prepaid telephone calling cards or prepaid telephone authorization numbers;
or the reathorization of prepaid telephone calling cards or prepaid telephone
authorization numbers. Directory assistance.
(7) Tangible personal property to an advertising agency for its use in providing advertising services or creating advertising materials for transfer in conjunction with the delivery of advertising services.
Sec. 24. 32 V.S.A. § 9701(4) is amended to read:
(4)(A) Sales price: means the total amount of consideration, including cash, credit, property, and services, for which personal property or services are sold, leased or rented, valued in money, whether received in money or otherwise, without deduction for the following:
* * *
The value of exempt personal property given to the purchaser where taxable and
exempt personal property have been bundled together and sold by the seller as a
single product or piece of merchandise; and including consideration received by the seller from third parties
(I) The seller actually receives consideration from a party other than the purchaser and the consideration is directly related to a price reduction or discount on the sale;
(II) The seller has an obligation to pass the price reduction or discount through to the purchaser;
(III) The amount of the consideration attributable to the sale is fixed and determinable by the seller at the time of the sale of the item to the purchaser; and
(IV) One of the following criteria is met:
(aa) The purchaser presents a coupon, certificate, or other documentation to the seller to claim a price reduction or discount where the coupon, certificate, or documentation is authorized, distributed, or granted by a third party with the understanding that the third party will reimburse any seller to whom the coupon, certificate, or documentation is presented;
(bb) The purchaser identifies himself or herself to the seller as a member of a group or organization entitled to a price reduction or discount (a “preferred customer” card that is available to any patron does not constitute membership in such a group); or
(cc) The price reduction or discount is identified as a third party price reduction or discount on the invoice received by the purchaser or on a coupon, certificate, or other documentation presented by the purchaser.
* * *
* * *
for any trade-in
. ; and
(vi) Telecommunications nonrecurring charges.
(a) Secs. 21, 22 and 23 of this act (sales tax changes) shall take effect July 1, 2005.
(b) Sec. 24 of this act (sales tax definition of “sales price”) 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.
(c) Telecommunications nonrecurring charges as defined in Sec. 21 of this act shall be exempt from the sales and use tax beginning July 1, 2005.
Sec. 26. 32 V.S.A. § 312 is added to read:
§ 312. TAX EXPENDITURE REPORT
(a) For purposes of this section, “tax expenditure” shall mean the actual or estimated loss in tax revenue resulting from any exemption, exclusion, deduction, or credit applicable to the tax.
(b) Tax expenditure reports. Biennially, as part of the budget process, beginning January 15, 2009, the department of taxes shall file with the House Committees on Ways and Means and Appropriations and the Senate Committees on Finance and Appropriations a report on tax expenditures in the personal and corporate income, sales and use, and meals and rooms tax returns, and education property tax grand lists and such other tax expenditures for which the joint fiscal office and the tax department jointly have produced revenue estimates. The report shall include, for each tax expenditure, the following information:
(1) A description of the tax expenditure.
(2) The most recent fiscal information available on the direct cost of the tax expenditure in the past two years.
(3) The date of enactment of the expenditure.
(4) A description of and estimate of the number of taxpayers directly benefiting from the expenditure provision.
Sec. 27. TRANSITION REPORTS
(a) The department of taxes shall file with the House Committees on Ways and Means and Appropriations, and with the Senate Committees on Finance and Appropriations reports on the following:
(1) By January 15, 2006, tax expenditures reported under the personal and corporate income tax with the information required by 32 V.S.A. § 312 for the most recent fiscal year available and such other tax expenditures for which the joint fiscal office and the tax department jointly have produced revenue estimates.
(2) By January 15, 2007, tax expenditures reported under the personal and corporate income tax and sales and use tax, with the information required by 32 V.S.A. § 312 for the most recent fiscal year available and such other tax expenditures for which the joint fiscal office and the tax department jointly have produced revenue estimates.
(3) By January 15, 2008, tax expenditures reported under the personal and corporate income tax, sales and use tax, meals and rooms tax, and education property tax, with the information required by 32 V.S.A. § 312 for the most recent fiscal year available and such other tax expenditures for which the joint fiscal office and the tax department jointly have produced revenue estimates.
(b) For each of the joint fiscal committee’s September 2005, 2006 and 2007 meetings, the joint fiscal office and the tax department shall file a joint report identifying specific tax expenditures or categories of expenditures in addition to those reported to the tax department for which revenue estimates shall be included in the next report or subsequent reports filed with the legislative committees.
The Vermont General Assembly
115 State Street