An act relating to miscellaneous tax policy amendments.
The Senate proposes to the House to amend the bill as follows:
* * * Preserves Changes to Cigarette Tax in Health Bill if it is Enacted * * *
First: By adding a new section to be numbered Sec. 3a to read as follows:
Sec. 3a. PRIORITY OF ENACTMENTS
Sec. 3 of this act
(amending 32 V.S.A. § 7771 relating to the cigarette tax) shall be subject to
and further amended by any amendments to § 7771 in H. 861 which are enacted in
2006, except that the repeal of the sentence at the end of subsection (a)(3) of
Sec. 3 of this act, which reads “
All taxes upon cigarettes under this chapter are declared to be a
direct tax upon the consumer at retail and shall conclusively be presumed to be
precollected for the purpose of convenience and facility only.” shall remain repealed.
* * * Leaves Sales Tax on Downloaded Software to
Begin When SST Begins * * *
Second: By striking out Sec. 4 (accelerating the effective date for sales taxation of prewritten computer software in electronic form)
Third: In Sec. 6 (effective date for Sec. 4) by striking out subsection (4)
* * * Increase of Credit for Higher Ed Investment Plan Contributions * * *
Fourth: By adding a new section to be numbered Sec. 8 to read as follows:
Sec. 8. 32 V.S.A. § 5825A is amended to read:
§ 5825A. CREDIT FOR VERMONT HIGHER EDUCATION
INVESTMENT PLAN CONTRIBUTIONS
(a) A taxpayer of
this state, including each spouse filing a joint return, shall be eligible for
a nonrefundable credit against the tax imposed under section 5822 of this title
five ten percent of the first $2,000.00 $2,500.00
per beneficiary, contributed by the taxpayer during the taxable year to a
Vermont higher education investment plan account under subchapter 7 of chapter
87 of Title 16.
(b) A taxpayer who has
received a credit under subsection (a) of this section shall repay to the
five ten percent of any distribution from a higher
education investment plan account, which distribution is not excluded from
gross income in the taxable year under Section 529 of the Internal Revenue
Code, as amended, up to a maximum of the total credits received by the taxpayer
under subsection (a) of this section minus any amount of repayment of such
credits in prior tax years. Repayments under this subsection shall be subject
to assessment, notice, penalty and interest, collection, and other
administration in the same manner as an income tax under this chapter.
* * * State College Property/VTC “Incubator” * * *
Fifth: By adding two new sections to be numbered Secs. 9 and 10 to read as follows:
Sec. 9. 32 V.S.A. § 3701(1)(A) is amended to read:
(1) “State-owned property” means:
(A) state-owned buildings, including buildings of the
Vermont state colleges
and which are tax-exempt under section 2178 of
Title 16; buildings of the University of Vermont and State Agricultural
College used for educational and not commercial purposes; and buildings
of the agency of transportation and the department of the military; but
excluding the value of land on which the buildings are located, and excluding
all highways and bridges and any land pertaining thereto; and
Sec. 10. 16 V.S.A. § 2178 is amended to read:
§ 2178. TAX EXEMPTION
All real and personal property owned by the corporation and used for educational and not commercial purposes shall be exempt from taxation.
* * * Changing Angel Investment Incentive to a Credit * * *
Sixth: By adding three new sections to be numbered Secs. 11, 12 and 13 to read as follows:
Sec. 11. 32 V.S.A. § 5811(21) is amended to read:
(21) “Taxable income” means federal taxable income:
(A) Increased by the following items of income (to the extent such income is excluded from federal adjusted gross income):
(i) interest income from non-Vermont state and local obligations; and
(ii) dividends or other distributions from any fund to the extent they are attributable to non-Vermont state or local obligations;
(iii) any amount of
capital gain income which was deferred in a prior year under subdivision (B)(iii)
of this subdivision (21), to be added in the taxable year of disposition of the
taxpayer’s interest in the qualified business; and
(B) Decreased by the following items of income (to the extent such income is included in federal adjusted gross income):
(i) income from United States government obligations; and
(ii) 40 percent of adjusted
net capital gain income as defined in Section 1(h) of the Internal Revenue Code
; (iii) 60 percent of capital
gain income that is invested in the taxable year, or (through filing an amended
return) within two years of receipt, in an eligible venture capital investment
under section 5930v of this title.
Sec. 12. 32 V.S.A. § 5930v is amended to read:
§ 5930v. Angel venture capital
; capital gain rollover
(a) A qualified taxpayer of
this state shall be eligible for
taxation of capital gain income under
subdivision 5811(21) of this title resulting from a credit of three
percent of capital gain income from an eligible venture capital investment
under this section made by the taxpayer during the taxable year. If the
taxpayer is a partnership, limited liability company, or S corporation, the
treatment of capital gain income under this section shall be allocated ratably
among the partners, members, or shareholders of the entity.
* * *
(b) In this section:
* * *
(3) “Eligible venture capital investment” means at least $50,000.00 and up to $200,000.00 of total investment by one person, which is equity or at-risk debt investment in one qualified business, for expenditure by the qualified business on the plant, equipment, research, and development or as working capital in Vermont.
Sec. 13. INVESTMENTS DEFERRED UNDER PRIOR LAW
Capital gain income, the taxation of which was deferred pursuant to 32 V.S.A. § 5811(21)(B)(iii), must be included in the qualified taxpayer’s taxable income no later than five years after the taxable year in which the investment that gave rise to the deferral was made.
* * * Local Option Taxes for All Towns, No Sunset; Highway Funds * * *
Seventh: By adding three new sections to be numbered Secs. 14, 15 and 16 to read as follows
Sec. 14. 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 .
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 A local option tax adopted under this section 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.
Sec. 15. 32 V.S.A. § 3707a is added to read:
(a) There is hereby established a PILOT special fund, consisting of local option tax revenue paid to the Treasurer pursuant to 24 V.S.A. § 138. This fund shall be managed by the commissioner of taxes pursuant to subchapter 5 of chapter 7 of this title. Notwithstanding section 588(3) of this title, all interest earned on the fund shall be retained in the fund for use in meeting future obligations. The fund shall be used exclusively for state payments in lieu of taxes required under this subchapter 4. The commissioner of finance and management may draw warrants for disbursement from this fund in anticipation of receipts.
(b) If the PILOT special fund in insufficient to pay the full amount of all payments in lieu of taxes required under this subchapter 4, then payments, after application of the cap in subsection 3703(c) of this subchapter, shall be reduced proportionately.
Sec. 16. 24 V.S.A. § 138(d) is amended to read:
taxes reported under this section, 80 percent shall be paid to the municipality
in which they were reported for calendar year 1999, 70 percent shall be paid to
the municipality in which they were reported for calendar years thereafter.
Such revenues may be expended by the municipality for municipal services only
and not for educational expenditures. The remaining amount of the taxes
reported shall be remitted monthly to the state treasurer for deposit in the
PILOT special fund established in Sec. 89 of No. 60 of the Acts of 1997.
Amounts to be paid to a municipality under this section shall be reduced by
five percent to reflect the difference between the amounts reported and
collected. Taxes due to a municipality under this section, less the costs of
administration and collection, shall be paid on a quarterly basis. Taxes
collected under this section shall be paid as follows:
(i) 70 percent of the taxes shall be paid on a quarterly basis to the municipality in which they were collected, after reduction for the costs of administration and collection. Revenues received by a municipality may be expended for municipal services only, and not for educational expenditures.
(ii) The first $2.5 million of any remaining revenue shall be deposited into the PILOT special fund established by 32 V.S.A. §3709.
(iii) Any then remaining revenue shall be deposited fifty percent into the PILOT special fund established by 32 V.S.A. §3709, and fifty percent into the Town Highway Fund for town highway state aid.
* * * Less Frequent Reporting for Voluntary SST Collections * * *
Eighth: By striking out Sec. 5 in its entirety and inserting a new Sec. 5 to read as follows:
Sec. 5. 32 V.S.A. § §9775(a) and (f) are amended to read:
Every Except as
otherwise provided in this section, every person required to collect or pay
tax under this chapter shall, where the sales and use tax liability under this
chapter for the immediately preceding calendar year has been (or would have
been in cases when the business was not operating for the entire year) $500.00
or less, pay the tax imposed by this chapter in one annual payment on or before
the 25th day of January of each year. Every person required to collect or pay
tax under this chapter shall, where the sales and use tax liability under this
chapter for the immediately preceding calendar year has been (or would have
been in cases when the business was not operating for the entire year) more
than $500.00 but less than $2,500.00, pay the tax imposed by this chapter in
quarterly installments on or before the 25th day of the calendar month
succeeding the quarter ending on the last day of March, June, September and
December of each year. In all other cases, except as provided in subsection (e)
of this section, the tax imposed by this chapter shall be due and payable
monthly on or before the 25th (23rd of February) day of the month following the
month for which the tax is due. Payment by electronic funds transfer does not
affect the requirement to file returns. The return of a vendor of tangible
personal property shall show such information as the commissioner may require.
* * *
(f) A person registered under the Multistate Streamlined Sales and Use Tax Agreement that does not have a legal requirement to register in this state and is not a Model 1, 2 or 3 seller may file a return within one year of the month of initial registration and may file annual returns in the same month for succeeding years; provided, however, that such person must file a return on the 25th of the month following any month in which the taxpayer accumulated state and local taxes in the amount of $1000.00 or more.
* * * Technical: Repeal of Unused Credit * * *
Ninth: By adding a new section to be numbered Sec. 17 to read as follows:
Sec. 17. REPEAL
32 V.S.A. § 5930t (tax credit for training employees) is repealed.
* * * Technical: Updated Reference to “Telecom Provider” * * *
Tenth: By adding a new section to be numbered Sec. 18 to read as follows:
Sec. 18. 32 V.S.A. § 9701(9)(H) is amended to read:
(H) A person who provides
provider as defined in 30 V.S.A. § 7501
32 V.S.A. § 9701(19), except that "vendor" shall not include
a person whose activities in this state are limited to the performance of any
activities which, without more, would not constitute nexus for sales tax
collection purposes, plus any or all of the following necessary to create or
maintain a worldwide web page or internet site for the person:
(i) ownership of data or programming code in this state, or use of that data or programming code by another person or by a person not in this state;
(ii) ownership of, or receipt of services from, computer servers in this state;
(iii) receipt of computer processing or web hosting services from a computer service provider or web hosting service in this state.
* * * Technical: Arithmetic Error in 2006 Corp. Tax Table * * *
Eleventh: By adding a new section to be Sec. 19 to read as follows:
Sec. 19. 32 V.S.A. § 5832(1) is amended to read:
Vermont net income of the corpo-
ration for the taxable year allo-
cated or apportioned to Vermont
under section 5833 of this title Tax
$ 10,001.00-25,000.00 $600.00 plus 7.0% of the excess
25,001.00-250,000.00 $1,650.00 plus 8.75% of the excess over $25,000.00
of the excess over $250,000.00
* * * Net Operating Loss Simplification * * *
Twelfth: By adding four new sections to be numbered Secs. 20, 21, 22 and 23 to read as follows:
Sec. 20. 32 V.S.A. § 5811(25) is added to read:
§ 5811 Definitions
The following definitions shall apply throughout this chapter unless the context requires otherwise:
* * *
(25) “Vermont net operating loss” means any negative income after allocation and apportionment of Vermont net income pursuant to section 5833 of this chapter.
Sec. 21. 32 V.S.A. § 5831 is amended to read:
A tax is imposed for each calendar year, or fiscal year ending during that calendar year, upon the income earned or received in that taxable year by every taxable corporation, reduced by any Vermont net operating loss allowed under section 5888 of this title, such tax being the greater of
* * *
Sec. 22. 32 V.S.A. § 5888(4)(B) is amended to read:
(4) Notwithstanding any other provision of law:
* * *
(B) The amount of any Vermont
net operating loss
, or net operating loss carryback or carryforward, which
is available to a taxpayer under the laws of the United States, shall be
available to a taxpayer as a carryforward in the ten years following the
loss year in the determination of his Vermont tax, provided, however,
that the amount of any refund due to a net operating loss carryback shall not
exceed $5,000.00 for any taxable year.
Sec. 23. TRANSITION
The transition rules for implementation of Secs. 20, 21 and 22 of this act shall be:
(a) For losses occurring in taxable year 2007, the amount of net operating loss carryforward available under 32 V.S.A. § 5885(4)(B) shall be the same proportion of the Vermont net operating loss as the proportion of the federal net operating loss that was carried forward in determining federal taxable income increased by ten percent of remaining Vermont net operating loss.
(b) For losses occurring in taxable year 2008, the amount of net operating loss carryforward available under 32 V.S.A. § 5888(4)(B) shall be the same proportion of the Vermont net operating loss as the proportion of the federal net operating loss that was carried forward in determining the federal taxable income increased by thirty percent of remaining Vermont net operating loss.
(c) For losses occurring in taxable year 2009, the amount of Vermont net operating loss carryforward available under 32 V.S.A. § 5888(4)(B) shall be the same proportion of the Vermont net operating loss as the proportion of the federal net operating loss that was carried forward in determining the federal taxable income increased by forty percent of the remaining Vermont net operating loss.
(d) For losses occurring in taxable years 2009 and after, the full amount of the Vermont net operating loss may be carried forward.
* * * Study on How to Tax Trailer Coaches * * *
Thirteenth: By adding a new section to be numbered Sec. 24 to read as follows:
Sec. 24. PROPERTY TAXATION OF TRAILER COACHES
The legislative council, in consultation with the Division of Property Taxation and Review, the Vermont Association of Listers and Assessors, and the Vermont Campground Association, Inc., shall draft a proposal to amend the property tax laws to allow taxation or tax-exemption of trailer coaches in a fair and equitable manner, which can be applied uniformly across the state. The legislative council shall present its draft to the House Committee on Ways and Means and the Senate Committee on Finance by January 15, 2007.
Fourteenth: By adding a new Sec. 24a to read as follows:
Sec. 24a. 32 V.S.A. §3752(14) is amended to read:
(14) "Farm buildings" means all farm buildings and other farm improvements which are actively used by a farmer as part of a farming operation, are owned by a farmer or leased to a farmer under a written lease for a term of three years or more, and are situated on land that is enrolled in a use value appraisal program or on a house site adjoining enrolled land; but "farm buildings" shall not include any dwelling other than a dwelling in use during the preceding tax year exclusively to house one or more farm employees, as defined in section 4469 of Title 9, and their families, as a nonmonetary benefit of the farm employment. With respect to a dwelling used to house farm employees, the dwelling shall be on a parcel of no more than two acres situated on enrolled land or surrounded by enrolled land, or surrounded by enrolled land interrupted only by road frontage, as long as the ownership of the dwelling and the enrolled land is in the same family.
* * * Film Credit * * *
Fifteenth: By adding three new sections to be numbered Secs. 25, 26 and 27 to read as follows:
Sec. 25. 32 V.S.A. § 5930z is added to read:
§ 5930z. MOTION PICTURE TAX CREDIT
(a) For the purposes of this section:
(1) “Commission” means the Vermont film commission.
(2) “Eligible expense” means preproduction, production, and postproduction expenditures directly incurred in Vermont by an eligible production company for the production of a qualified motion picture. This term includes wages and salaries paid to individuals employed in Vermont in the production of the motion picture, but does not include wages or salaries in excess of $1,000,000.00 for any one individual for any one motion picture; and includes expenditures for the following activities: set construction and operation, editing and related services, photography, sound synchronization, lighting, wardrobe, make-up, and accessories, film processing, transfer, mixing, special and visual effects, music, screenplay purchase, location fees, purchase or rental of facilities and equipment, or any other production expense incurred in Vermont that may be determined by the commission to be an eligible expense. This term does not include expenses incurred for marketing or advertising a motion picture or any amounts paid to persons as a result of their participation in profits from the exploitation of the production.
(3) “Eligible production company” means a company, including its subsidiaries, engaged in the business of producing qualified motion pictures; but shall not include any company which is in default, or which is affiliated with, or owned or controlled, in whole or in part, by any person in default, on taxes owed to the state or on a loan made or guaranteed by the state.
(4) “Qualified motion picture” means a feature-length film, video, video game, television series of 22 or more episodes, pilot, video on demand, or commercial made in whole or in part in Vermont, for commercial distribution, theatrical or television viewing, or mobile or wireless platforms. “Qualified motion picture” does not mean a television production featuring news, current events, weather, financial market reports, a sporting event, an award show, a production solely for fundraising, a long-form production primarily intended to market a product or service, or a production containing obscene material.
(5) “Secretary” means the secretary of the agency of commerce and community development.
(6) “State-certified production” means a qualified motion picture certified by the Vermont film commission, pursuant to rules adopted by the commission, and produced by an eligible production company that has signed a viable distribution plan with either a major theatrical exhibitor, a television network, or a cable television program.
(b) Motion picture tax credit. An eligible production company shall be allowed a refundable credit against the income tax imposed under this chapter in the amount of 25 percent of the eligible expenses not to exceed $7,000,000.00 incurred within the state in the taxable year and related to a state-certified production with a total production budget of at least $1,000,000.00, as certified by the secretary.
(c) A film production company allowed a credit under this section shall acknowledge the state of Vermont in the end credits of the film production.
(d) The director of the commission shall determine by rule criteria for
(e) Upon completion of a state-certified production, the secretary shall review the production expenses and certify the amount of expenses qualified for credit under this section.
(f) Any taxpayer applying for the credit shall reimburse the secretary for any audit the secretary determines is required to certify the credit.
Sec. 26. 32 V.S.A. § 9701(45) is added to read:
(45) Manufacturing: shall not include motion picture or film production.
Sec. 27. EFFECTIVE DATE
Sec. 25 of this act (motion picture tax credit) shall take effect upon passage and shall apply to any production commenced on or after July 1, 2006, that may be certified by the Vermont film commission; and Sec. 26 of this act (manufacturing does not include film production) shall take effect upon passage. No payment shall be made by the state for any refundable motion picture tax credit awarded under Section 25 of this act before July 1, 2007.
* * * Affordable Housing Tax Credit and Study * * *
Sixteenth: By adding four new sections to be numbered Secs. 28, 29, 30 and 31 to read as follows:
Sec. 28. 32 V.S.A. § 5930u(c), (d), and (g) are amended to read:
(c) 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. The first-year allocation of a credit amount to a taxpayer shall also be deemed an allocation of the same amount in each of the following four years.
Affordable The amount of affordable housing tax credits
credit allocated with respect to a project shall be available to the
taxpayer in each of every year for five consecutive tax years,
beginning with the tax year in which the eligible cash contribution is made. Total
tax credits available to the taxpayer shall be the amount of the first-year
allocation plus the succeeding four years’ deemed allocations.
(g) In any
fiscal year, the allocating agency shall not award a total amount of
tax credits may award up to $400,000.00 in total first-year credit
allocations to all applicants under this subchapter in excess of $150,000.00.
In any fiscal year, total first-year allocations plus succeeding-year deemed
allocations shall not exceed $2,000,000.00.
Sec. 29. ADMINISTRATION REPORT ON NEW AFFORDABLE
HOUSING TAX CREDIT
The Agency of Commerce and Community Development and the Department of Taxes, in consultation with the Vermont Housing Finance Agency and the Affordable Housing Coalition, are requested to study whether an additional tax credit, or other alternative form of incentive, would enable more low- and moderate-income individuals to become first-time homebuyers in Vermont. The study should include: (a) a description of possible recipients of the credit, for example, whether the credit would be available to employers who provide home buying assistance to employees, to income-eligible homebuyers, or others; (b) any limits on the credit; (c) a description of those who would be eligible for home buying assistance under the proposal; (d) a description of the goals of the credit, including the home buying assistance which would be provided, how and by whom, and the costs of the assistance provided; (e) an analysis of the annual cost of the proposal to the revenues of the state beginning in fiscal year 2008; (f) an analysis of the effectiveness of existing tax credits in other states for employer assistance to low- and moderate-income employees on first-home purchases; and (g) detailed information on the number of first-time homebuyers currently aided by VHFA, including income levels, the form of aid received, the price of homes purchased, whether this initial aid is sufficient to allow continued ownership, and if not, what additional issues need to be addressed. The Agency of Commerce and Community Development and the Department of Taxes shall report their findings to the standing committees of jurisdiction of the House and Senate by December 1, 2006.
Sec. 30. 32 V.S.A. § 312 is amended 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, insurance premium tax and bank franchise 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. 31. EFFECTIVE DATE AND TRANSITION RULE
Secs. 28, 29 and 30 this act ( affordable housing tax credits) shall take effect upon passage except that the Sec. 28 increase in amount available for affordable housing investment tax credits shall take effect July 1, 2006, and the total amount of first-year tax credits which may be allocated in fiscal year 2007 under 32 V.S.A. § 5930u(g) shall be limited to $300,000.00, and the total amount of first-year tax credits which may be allocated in fiscal years 2008 and after shall be $400,000.00.
* * * Smokeless Tobacco Amendments * * *
Seventeenth: By adding four new sections to be numbered Secs. 32, 33, 34 and 35 to read as follows:
Sec. 32. 32 V.S.A. § 7702 is amended to read:
§ 7702 DEFINITIONS
The following words and phrases, as used in this chapter, shall have the following meanings, unless the context otherwise requires:
shall mean the common
article of commerce known by this name consisting of a small cylindrical roll
composed in whole or in part of finely-cut tobacco, wrapped in paper or in any
substance other than tobacco means:
(A) any roll of tobacco wrapped in paper or any substance not containing tobacco, and
(B) any roll of tobacco wrapped in substance containing tobacco which, because of its appearance, the type of tobacco used in the filler, or its packaging and labeling, is likely to be offered to, or purchased by, consumers as a cigarette described in subdivision (A) of this subsection.
(2) "Commissioner" shall mean the commissioner of taxes.
(3) "Dealer" means any wholesale dealer and retail dealer as herein defined.
(4) "Distributor" means any person who imports, or causes to be imported, into this state any tobacco product for sale or who manufactures any tobacco product in this state, and any person within or without the state who is authorized by the commissioner to make returns and pay the tax on tobacco products sold, shipped or delivered by him to any person in the state.
(5) "Licensed wholesale dealer" shall mean a wholesale dealer licensed under the provisions of this chapter.
(6) “Little cigars” means any rolls of tobacco wrapped in leaf tobacco or any substance containing tobacco (other than any roll of tobacco which is a cigarette within the meaning of subdivision (1) of this section) and as to which one thousand units weigh not more than three pounds.
"Manufacturer" means a person who manufactures and sells tobacco
"Person" shall mean any individual, firm, fiduciary, partnership,
corporation, trust or association, however formed. (8)(9)
"Place of business" means any place where tobacco products are sold
or where tobacco products are manufactured, stored, or kept for the purpose of
sale or consumption, including any vessel, vehicle, airplane, train, or vending
"Retail dealer" shall mean a person who sells or furnishes cigarettes
or tobacco products, or both, in small quantities to consumers only, but not
for the purpose of resale.
(11) “Roll-your-own tobacco” means any tobacco which, because of its appearance, type, packaging, or labeling, is suitable for use and likely to be offered to, or purchased by, consumers as tobacco for making cigarettes.
"Sale" or "sell" means any transfer, exchange or barter in
any manner or by any means whatever, of any cigarettes or tobacco products.
(13) “Snuff” means any finely cut, ground, or powdered tobacco that is not intended to be smoked.
"Stamp" shall mean any impression, stamp, label or print
manufactured, printed or made as prescribed by the commissioner. (12)(15)
"Tobacco products" means cigars; cheroots; stogies; periques;
granulated, plug cut, crimp cut, ready rubbed, and other smoking tobacco;
snuff, snuff flour; cavendish; plug and twist tobacco; fine-cut and other
chewing tobaccos; shorts; refuse scraps, clippings, cuttings and sweeping of
tobacco, and other kinds and forms of tobacco, prepared in such manner as to be
suitable for chewing or smoking in a pipe or otherwise, or both for chewing and
smoking; but shall not include cigarettes as defined in this section. (13)(16)
"Wholesale dealer" shall mean a person who sells or furnishes
cigarettes or tobacco products, or both, to wholesale or retail dealers for the
purpose of resale, but not by the small quantity or parcel to consumers
"Wholesale dealer's license" shall mean the license granted under the
provisions of this chapter to a wholesale dealer for a wholesale outlet. (15)(18)
"Wholesale outlet" shall mean any premises where cigarettes or
tobacco products, or both, are sold, transferred, displayed or held for sale by
a wholesale dealer. (16)(19)
"Wholesale price" means the price at which a distributor sells or
furnishes tobacco products to any retail dealer.
Sec. 33. 32 V.S.A. § 7771 is amended to read:
§ 7771. RATE OF TAX
(a) A tax
is imposed on all cigarettes, little cigars, and roll your own tobacco
held in this state by any person for sale or by any person in possession of
more than 10,000 cigarettes, little cigars, and roll your own tobacco,
cigarettes products shall be:
(1) in the possession of a licensed wholesale dealer;
(2) in the course of transit and consigned to a licensed wholesale dealer or retail dealer; or
(3) in the possession of a retail dealer who has held
cigarettes products for 24 hours or less.
tax shall be at the rate of 59.5 mills for each cigarette
and the payment
thereof to or little cigar and for each nine-hundredths of an ounce of
roll-your-own tobacco. Payment of the tax on cigarettes shall be evidenced
by the affixing of stamps to the packages containing the cigarettes as hereinafter
provided. Where practicable, the commissioner may also require that
stamps be affixed to packages containing little cigars or roll-your-own
tobacco. Any cigarette, little cigar or roll-your-own tobacco, on
which the tax imposed by this chapter has been paid, such payment being
evidenced by the affixing of such stamp or such evidence as the commissioner
may require, shall not be subject to a further tax under this chapter.
Nothing contained in this chapter shall be construed to impose a tax on any
transaction the taxation of which by this state is prohibited by the
constitution of the United States. The amount of taxes advanced and paid by a licensed
wholesale dealer or a retail dealer as herein provided shall be added to and
collected as part of the retail sale price on the cigarettes, little cigars
or roll-your-own tobacco. All taxes upon cigarettes under this chapter
are declared to be a direct tax upon the consumer at retail and shall
conclusively be presumed to be precollected for the purpose of convenience and
Sec. 34. 32 V.S.A. § 7811 is amended to read:
§ 7811. Imposition of tobacco products tax
There is hereby imposed and shall be paid a tax on all tobacco products except roll-your-own tobacco and little cigars taxed under section 7771 of this title possessed in the state of Vermont by any person for sale on and after July 1, 1959 which were imported into the state or manufactured in the state after said date, except that no tax shall be imposed on tobacco products sold under such circumstances that this state is without power to impose such tax, or sold to the United States, or sold to or by a voluntary unincorporated organization of the armed forces of the United States operating a place for the sale of goods pursuant to regulations promulgated by the appropriate executive agency of the United States. Such tax on tobacco products shall be at the rate of 41 percent of the wholesale price for all tobacco products except snuff which shall be taxed at the rate of $1.08 per ounce, or fractional part thereof, and is intended to be imposed only once upon any tobacco product. Provided, however, that upon payment of the tax within ten days, the distributor or dealer may deduct from the tax two percent of the tax due. It shall be presumed that all tobacco products within the state are subject to tax until the contrary is established and the burden of proof that any tobacco products are not taxable hereunder shall be upon the person in possession thereof.
Sec. 35. CIGARETTE AND TOBACCO PRODUCTS; EFFECTIVE DATE;
Secs. 32 through 34 (cigarette and tobacco products taxation) of this act and
this section 35 shall take effect July 1, 2006; and the amendments in
these sections 32 through 34 shall be subject to and further amended by
any amendments to § 7771 in Sec. 3 of this act and any amendment to § 7771 in
H. 861 which are enacted in 2006, except that the repeal of the sentence at the
end of subsection (b)(3) of Sec. 38 of this act, which reads “
All taxes upon cigarettes under this
chapter are declared to be a direct tax upon the consumer at retail and shall
conclusively be presumed to be precollected for the purpose of convenience and
facility only.” shall
Eighteenth: By adding a new section to be numbered Sec. 35a to read as follows:
Sec. 35a. 32 V.S.A. § 3802 (11) is amended to read:
Real and personal property to the extent of
of appraisal value, except any part used for business or rental, occupied as
the established residence of and owned in fee simple by a veteran of any war or
a veteran who has received an American Expeditionary Medal, his or her spouse,
widow, widower or child, or jointly by any combination of them, if one or more
of them are receiving disability compensation for at least 50 percent
disability, death compensation, dependence and indemnity compensation, or
pension for disability paid through any military department or the veterans
administration if, before May 1 of each year, there is filed with the listers:
* * *
An unremarried widow or widower
of a previously qualified veteran shall be entitled to the exemption provided
in this subdivision whether or not he or she is receiving government
compensation or pension. By majority vote of those present and voting at an
annual or special meeting warned for the purpose, a town may increase the
veterans' exemption under this subsection to up to
of appraisal value. Any increase in exemption shall take effect for the taxable
year in which it was voted, and shall remain in effect for future taxable years
until amended or repealed by a similar vote.
* * * Effective Date Additions * * *
Nineteenth: By renumbering Sec. 6 as Sec. 36, and adding new subsections to that section as follows:
(5) Sec. 7 (disallowance of domestic production activity deduction in excess of 3 percent of qualified income) shall apply to taxable years 2006 and after.
(6) Sec. 8 of this act (expanding the Higher Education Investment Plan tax credit) shall apply to contributions made in taxable years 2007 and after.
(7) Sec. 9 of this act (payments in lieu of taxes for tax-exempt State College buildings) shall take effect July 1, 2006; and Sec. 10 of this act (limitation on State College property tax exemption to property used for educational and not commercial purposes) shall apply to grand lists of April 1, 2011 and after.
(8) Secs. 11 and 12 of this act (angel venture capital credit) shall apply to taxable years 2006 and after.
(9) Sec. 19 of this act (correcting arithmetic error in tax table) shall apply to taxable year 2006 only.
The Vermont General Assembly
115 State Street