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AN ACT RELATING TO MISCELLANEOUS TAX AMENDMENTS

The Senate proposes to the House to amend the bill as follows:

First:  In Sec. 2, on page 3, on line 7, by striking all after “shall not exceed $900.00” and inserting in lieu thereof “the same cap amount as contained in the purchase and use tax provisions of 32 V.S.A. § 8903.

Second:  In Sec. 3, and in Sec. 4, after the words “House Committee on Ways and Means” by inserting the words:  and Senate Committee on Finance

Third:  In Sec. 4, in the first sentence, by striking out the words “In order to take a reasoned action on changing the structure of Vermont net operating loss law, the House Committee on Ways and Means requests that the Joint Fiscal Office and the Department of Taxes study the possible effects of” and inserting in lieu thereof the following words:  The Department of Taxes, with the assistance of the Joint Fiscal Office, shall study the possible effects of

Fourth:  In Sec. 6, in 32 V.S.A. § 3481, subdivision (1), by striking out the third sentence in its entirety and inserting in lieu thereof the following:

Those 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.

Fifth:  By striking out Secs. 9 and 10 and subsection 11(j) and inserting in lieu thereof new Secs. 9 and 10 and subsection 11(j) to read:

Sec. 9.  24 V.S.A. § 138(a) is amended to read:

(a)  Local option taxes are authorized under this section for the purpose of affording municipalities an alternative method of raising municipal revenues. to facilitate the transition and reduce the dislocations in those municipalities that may be caused by reforms to the method of financing public education under the Equal Educational Opportunity Act of 1997. Accordingly:

(1)  the local option taxes authorized under this section may be imposed by a municipality only during calendar years 1999 through 2008;

(2)  a municipality opting to impose a local option tax may do so prior to July 1, 1998 to be effective beginning January 1, 1999, and anytime after December 1, 1998 a local option tax shall be effective beginning on the next tax quarter following 30 days' notice to the department of taxes of the imposition; and all authority to opt to impose a local option tax under this section shall terminate September 1, 2007, and all authority to impose a local option tax shall terminate on December 31, 2008; and

(3)  a local option tax may only be adopted by a municipality in which:

(A)  the education property tax rate in 1997 was less than $1.10 per $100.00 of equalized education property value; or

(B)  the equalized grand list value of personal property, business machinery, inventory, and equipment is at least ten percent of the equalized education grand list as reported in the 1998 Annual Report of the Division of Property Valuation and Review; or

(C)  the combined education tax rate of the municipality will increase by 20 percent or more in fiscal year 1999 or in fiscal year 2000 over the rate of the combined education property tax in the previous fiscal year For any municipality which imposes a local option tax under this section, the tax shall be effective beginning with the next tax quarter following 90 days’ notice to the department of taxes of the imposition.

Sec. 10.  REPEAL

Sec 15 of No. 152 of the Acts of the 2003 Adj. Sess. (2004) (changing notice period for a municipality which opts to impose local taxes) is repealed, effective upon passage of this act.

Sec. 11.  EFFECTIVE DATES

(j)  Secs. 9 and 10 of this act (authority to opt for certain local taxes extended to all municipalities) shall take effect upon passage.

Sixth:  By adding Secs. 12 through 17 to read:

Sec. 12.  32 V.S.A. § 5406(c) is amended to read:

(c)  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:

(2)  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:

(d)  Sec. 9 (simplification of designated downtown sales tax allocation formula) shall take effect with respect to applications submitted after July June 1, 2005.

Sec. 15.  32 V.S.A. § 5822(d) is amended to read:

(d)  A 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:  retirement income 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.

Seventh:  By adding Secs. 18, 19, and 20 to read:

Sec. 18.  10 V.S.A. § 611(b), (c), (d), (e), (g), and (h) are amended to read:

(b)  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.

(c)  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.

(d)  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.

(g)  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 VermontCommissioners, 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.

Eighth:  By adding Secs. 21 through 25 to read:

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:

* * *

(19)  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.

* * *

(42)  Charges paid by inserting coins in coin-operated telecommunications service devices.

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.

(6)  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:

* * *

(v)  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 if:

(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.

* * *

(B)  Sales price shall not include:

* * *

(iv)  Installation charges; and

(v)  Credit for any trade-in.  ; and

(vi)  Telecommunications nonrecurring charges.

Sec. 25.  EFFECTIVE DATES AND TRANSITION RULE

(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.

Ninth:  By adding Secs. 26 and 27 to read:

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.  The report shall also 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 to 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.

(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.

(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.

(b)  The department of taxes shall advise the Joint Fiscal Committee at its September meeting in 2005, 2006, and 2007, on the status of the department’s research in preparation for the report due the following January under subsection (a) of this section.

 



Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont


www.leg.state.vt.us