|ACT OF THE GENERAL ASSEMBLY||2007-2008|
NO. 81. AN ACT RELATING TO MISCELLANEOUS SUBSTANTIVE TAX AMENDMENTS.
It is hereby enacted by the General Assembly of the State of Vermont:
Sec. 1. [Deleted.]
* * * Electronic Funds Transfer * * *
Sec. 2. 32 V.S.A. § 5842(a)(4) is amended to read:
(4) The commissioner shall prescribe the method of payment of tax and may, without limitation, require electronic funds transfer or payment to a bank depository. The commissioner may, in writing, permit or require returns to be made covering other periods and upon such dates as the commissioner may specify and require payments of tax liability at such intervals and based upon such classifications as the commissioner may designate:
(A) to conform to federal withholding law as the commissioner deems appropriate;
(B) in cases in which less frequent reporting is determined by the commissioner to be sufficient; and
cases in which the commissioner determines that the taxpayer’s repeated failure
to file or pay tax makes more frequent reporting necessary to insure the prompt
and orderly collection of the tax
; (D) in
cases in which electronic funds transfer is required, to allow up to four
additional days for payment.
Sec. 3. 32 V.S.A. § 3201(a)(8) is added to read:
(8) In cases in which payment of taxes is allowed or required by electronic funds transfer, allow up to six additional days for payment.
* * * Property Tax Adjustments * * *
Sec. 4. 32 V.S.A. § 6074 is amended to read:
§ 6074. amendment of certain claims
At any time within three years after the date for filing claims under subsection 6068(b)(a) of this chapter, a claimant who timely filed a claim by September 1, may file to amend that claim, to correct the amount of household income reported on that claim.
* * * Tobacco Tax * * *
Sec. 5. 32 V.S.A. § 7817 is amended to read:
§ 7817. determination of tax on failure to file return
If any person, having
failed to file when due a return relating to the tobacco products tax under
this chapter, fails to file such return within 10 days after notice is given to
him by the commissioner that such return is required, the commissioner may
compute the tax liability of the taxpayer with respect to which the return was
required to be filed, according to the commissioner’s best information and belief,
at any time within three years after the date the return was due, and give
written notice of such determination to such person. (b) When the commissioner
discovers, by examination of the records of the taxpayer as provided in section
7816 of this title, or otherwise, that a person required to file a return under
this subchapter, has filed an incorrect or insufficient return, he may, at any
time within three years after the date the return was due, determine the
correct amount of tax and shall give notice to the taxpayer of the amount of
any deficiency in such tax, together with penalty and interest as hereinafter
provided. If no return has been filed as provided by law, the tax may be
assessed at any time. (c)(b) A
determination by the commissioner in accordance with subdivision (a) or
(b) of this section shall fix the tax, unless the person against whom it is
assessed shall, within 60 days after receiving the notice of such
determination, apply to the commissioner for a hearing as is herein provided. The
decision of the commissioner after the hearing may be reviewed as provided in
Sec. 6. 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 $1.49 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. Wholesalers of tobacco products shall state on the invoice whether the price includes the Vermont tobacco products tax.
Sec. 7. 32 V.S.A. § 9741(29) is amended to read:
including depreciable parts, machinery and equipment to be installed as a
capital asset in such aircraft, sold to a person which holds itself out to
the general public as engaging in air commerce, for use primarily in the
carriage of persons or property for compensation or hire; and parts, machinery,
and equipment to be installed in any aircraft.
Sec. 7a. 32 V.S.A. § 9741(29) is amended to read:
sold to a person which holds itself out to the general public as engaging in
air commerce, for use primarily in the carriage of persons or property for
compensation or hire; and parts, machinery, and equipment to be installed in
Sec. 7b. EFFECTIVE DATE
Sec. 7a of this act (amendment of sales tax exemption for aircraft parts) shall take effect July 1, 2011.
* * * Dead Claimant/No Escheat * * *
Sec. 8. 32 V.S.A. § 6063 is amended to read:
§ 6063. Claim as
The right to file a claim under
this chapter is personal to the claimant and shall not survive his or her
death, but the right may be exercised on behalf of a claimant by his or her
legal guardian or attorney‑in‑fact. When a claimant dies after
having filed a timely claim, the reduction payment
may be issued to another
member of the household as determined by the commissioner. If the claimant was
the only member of the household, the claim shall be paid to the executor or
administrator, but if neither is appointed within two years of the filing of
the claim, the amount thereof shall escheat to the state shall be paid
to the town in which the housesite of the deceased is located for credit to the
claimant’s estate for property tax liabilities as provided in section 6066a of
Sec. 9. [Deleted.]
Sec. 10. 32 V.S.A. § 3481(1) is amended to read:
(1) “Appraisal value” shall mean, with respect to property enrolled in a use value appraisal program, the use value appraisal as defined in subdivision 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 value. 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. 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 or in the case of properties authorized under 42 U.S.C. § 1437, 12 U.S.C. § 1701q, 42 U.S.C. § 1485, 12 U.S.C. § 1715z‑1, 42 U.S.C. § 1437f, and 24 CFR Part 882 Subpart D and E, the higher of contract rents (meaning the amount of federal rental assistance plus any tenant contribution) and HUD market rents;
(B) actual expenses incurred with respect to the property
shall be provided by the property owner in a format acceptable to the
commissioner and certified by an independent third party, such as a
certified public accounting firm or public or quasi‑public funding agency;
(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. 11. EXEMPTION FROM EDUCATION PROPERTY TAX THROUGH
JUNE 30, 2008
Property tax exemptions authorized under the provisions of 32 V.S.A.
§ 3843 before July 1, 1997, and still in effect on June 30, 2007, shall be deemed to be exemptions affecting the education property tax grand list through June 30, 2008.
Sec. 12. 32 V.S.A. § 5404a(b) is amended to read:
(b) An agreement affecting the education property tax grand list defined under subsection (a) of this section shall reduce the municipality’s education property tax liability under this chapter for the duration of the agreement or exemption without extension or renewal, and for a maximum of ten years, subject to the provisions of subsection 5930b(f) of this title. A municipality’s property tax liability under this chapter shall be reduced by any difference between the amount of the education property taxes collected on the subject property and the amount of education property taxes that would have been collected on such property if its fair market value were taxed at the equalized nonresidential rate for the tax year.
Sec. 13. 32 V.S.A. § 5404a(e) is amended to read:
(e) Allocations. A municipality
on behalf of a person may apply to the Vermont economic progress council for an
allocation of the education grand list value
for up to ten years,
of a portion of the increase in the value and liability assessed under section
5402 of this title on new economic development that is subsequently approved by
the Vermont economic progress council pursuant to this section and subsections
5930a(c) and (d) of this title. The allocation may be awarded for up to ten
years, subject to the provisions of subsection 5930b(f) of this title.
Allocation to a municipality pursuant to this subsection shall be in addition
to any other payments to the municipality under chapter 133 of Title 16. If
allocated, the allocated portion of the education fund liability shall be used
by the municipality for infrastructure that includes wastewater treatment,
water supply, transportation, and telecommunications and utility connections.
Sec. 14. 32 V.S.A. § 5930a(b) is amended to read:
(b) The Vermont economic progress council, within 60 days of receipt of a complete application, shall approve or deny the following economic incentives:
(1) tax stabilization agreements and exemptions under subdivision 5404a(a)(2) of this title;
(2) applications for allocation to municipalities of a portion of education grand list value and municipal liability from new economic development under subsection 5404a(e) of this title; and
the Vermont employment
growth incentives (VEGI) under section 5930b of this title. (4) the tax increment financing
(TIF) district program as established in section 5404a of this title.
All incentives are subject to application of the incentive ratio as determined under subdivision 5930b(b)(3) of this title and no tax stabilization agreement, exemption or allocation shall be approved except in conjunction with the approval of an incentive under subdivision (3) of this subsection.
Sec. 15. 32 V.S.A. § 5930a(d) is amended to read:
(d) The council
shall apply the cost‑benefit model in reviewing applications under
subdivisions (b)(1), (2), and (3) of this section to determine the net
fiscal benefit to the state. The cost‑benefit model shall be a uniform
and comprehensive methodology for assessing and measuring the projected net
fiscal benefit or cost to the state of proposed economic development activities
over the five‑year award period. Any modification of the cost‑benefit
model shall be subject to the approval of the joint fiscal committee. The cost‑benefit
analysis shall include consideration of the effect of the passage of time and
inflation on the value of multi‑year fiscal benefits and costs.
(1) In determining the projected net fiscal benefit or cost of the incentives considered under subdivisions (b)(1) and (2) of this section, the council shall calculate the net present value of the enhanced or forgone statewide education tax revenues, reflecting both direct and indirect economic activity. If the council approves an incentive pursuant to this section, the net fiscal costs, if any, to the state shall be counted as if all those costs occurred in the year in which the council first approved the incentive and that cost shall reduce the amount of the annual authorization for such approvals established by the legislature for the applicable calendar year.
(2) In determining the projected net fiscal benefit or cost of the incentives considered under subdivision (b)(3) of this section, the council shall calculate the net present value of the enhanced or forgone state tax revenues attributable to the incentives, reflecting both direct and indirect economic activity over the five‑year award period. If the council approves an incentive, the net fiscal costs, if any, to the state shall be counted as if all of those costs occurred in the year in which the council first approved the incentive and that cost shall reduce the amount of the council's annual authorization for approval of economic incentives as established by the legislature for the applicable calendar year.
Sec. 17. 32 V.S.A. § 5930b(a)(16) is amended to read:
“Payroll target” means the projected
qualifying payroll Vermont gross
wages and salaries for qualifying jobs in an award period year as reported
on the Vermont employment growth incentive application.
Sec. 18. 32 V.S.A. § 5930b(a)(17) is amended to read:
“Payroll threshold” means
base payroll or application base payroll (if year
1), plus expected average industry payroll growth as determined by the cost‑benefit
Sec. 19. 32 V.S.A. § 5930b(a)(21) is amended to read:
“Qualifying payroll” means
actual annualized Vermont gross wages
and salaries paid for qualifying jobs created in or carried forward
to a utilization period the award period year, provided incremental
payroll in that year equals or exceeds such gross wages that:
(A) award period year base payroll; minus
(B) Vermont gross wages and salaries paid for new qualifying jobs created in or carried forward to the award period year; equals or exceeds
(C) prior‑year base payroll minus any carry‑forward of qualifying payroll under subdivision (c)(4) of this section, plus award‑year payroll threshold.
Sec. 20. 32 V.S.A. § 5930b(c) is amended to read:
(c) Claiming an employment growth incentive.
business whose application is approved and, in any year during the award
period, meets or exceeds its payroll target and either its jobs or capital
investment target may file an annual return claiming incentives pursuant to
this section. Upon approval by the department of taxes, incentive payments
issued by the department of taxes calculated for each of
the five award period years in equal annual installments. The
department of taxes will disburse the incentives over consecutive five‑year
periods, beginning with each award period year, provided that the incentive‑triggering
award period year payroll and job targets are maintained in each utilization
period year for which an installment is claimed.
installments Incentives shall be calculated and disbursed as
follows: Qualifying payroll for the utilization award period
year, not to exceed the payroll target or targets reduced by the
payroll threshold for the incentive‑triggering award period year or
years shall be multiplied by the incentive percentage. Up to one‑fifth
of the total incentive amount shall be disbursed in the first of five
consecutive utilization period years, to the extent the full amount of
qualifying payroll was actually paid in that year. A full one‑fifth of
the total incentive amount shall be disbursed in each of the remaining four
consecutive utilization period years, provided that incentive‑triggering
targets are maintained.
* * *
(4) Qualifying jobs, qualifying capital investment, and qualifying payroll in excess of the jobs, capital investment, and payroll targets for an award year shall be carried forward and counted toward future award period year targets, provided such excess jobs, investment and payroll are maintained.
(5) A business whose application
is approved and, in the first award period year, fails to meet or exceed its
payroll target and one out of two of its jobs and capital investment targets
shall forfeit all authority to earn and claim incentives under this section.
The department of taxes shall notify the Vermont economic progress council that
the first year award period targets have not been met, and the council shall
rescind the incentive authorization in its entirety.
A business whose
incentive authorization is rescinded for failure to meet first‑year award
period targets may reapply to the Vermont economic progress council for a new
authorization pursuant to this section.
* * *
Sec. 21. 32 V.S.A. § 5930b(f) is added to read:
(f) The property of a business whose authority to earn, apply or retain incentives under this section has been revoked is ineligible for property tax stabilization under subdivision 5404a(a)(2) of this title or allocation of property tax value under subsection 5404a(e) of this title for any education property tax grand list after the date of revocation.
Sec. 22. EFFECTIVE DATE
Secs. 12 through 21 (Vermont Employment Growth Incentive technical amendments conforming to Act 184) of this act shall apply to claims filed in 2007 and after.
Sec. 23. 32 V.S.A. § 5930ee is amended to read:
§ 5930ee. LIMITATIONS
in fiscal year
2007 2008 and thereafter, the state board may
award tax credits to all qualified applicants under this subchapter, provided
The total amount of tax credits awarded annually, together with sales tax
reallocated under section 9819 of this title, does not exceed
Sec. 24. CASH PAYMENT OF PROPERTY TAX ADJUSTMENTS FOR
2007 REAL ESTATE CLOSINGS
For 2007 only, notwithstanding any other provision of law, for a residence transferred after March 31 and before June 21, 2007, if the transferor notifies the commissioner of taxes of the transfer, in writing, no later than 4:30 p.m. on June 20, 2007, and includes with the notice a copy of the property transfer tax return and proof of payment of the property transfer tax, the transferor's Social Security number, the property's school parcel account number, and any additional information which the commissioner may request the commissioner shall not notify the municipality of a property tax adjustment amount for the property, and the commissioner shall pay the property tax adjustment amount to the transferor by July 15, 2007.
Sec. 25. 32 V.S.A. § 10002(o) is added to read:
(o) Also excluded from the definition of land is the land sold to an organization that qualifies under Section 501(c)(3) of the Internal Revenue Code and also meets the “public support” test of Section 509(a)(2) of the Code, if one of the stated purposes of the organization is to provide affordable housing and if the land is sold by the organization within 12 months of the transfer to the organization to a buyer, qualified under an affordable housing program, in a transfer which meets all the requirements of subsection (b) of this section.
(1) If the organization fails to transfer the land within 12 months, or transfers it within 12 months but not to a qualified buyer for occupancy as the buyer's principal residence, then the organization shall become liable for the land gains tax due on the original transfer of the land to the organization and for the land gains tax on the transfer by the organization; and
(2) If the organization transfers the land within 12 months, but at the time of the transfer by the organization there is no dwelling on the land completed and fit for occupancy, and the qualified buyer fails to complete and occupy a principal residence on the land within two years of purchase from the organization, then the organization shall become liable for the land gains tax due on the original transfer of the land to the organization, and the buyer who purchased the land from the organization shall become liable for the land gains tax due on the transfer from the organization to the buyer.
Sec. 26. EFFECTIVE DATES
This act shall take effect upon passage except:
(1) Secs. 2 and 3 (additional time to pay electronically‑filed tax returns) shall take effect July 1, 2008.
(2) Sec. 5 (no statute of limitations for assessment of tobacco tax in cases of failure to file) shall apply with regard to returns with a filing due date of July 1, 2004, or after.
(3) As provided in Secs. 7b and 22.
(4) Sec. 10 of this act (grand list valuation of affordable rental housing) shall apply to grand lists of April 1, 2007, and after.
Approved: June 11, 2007
The Vermont General Assembly
115 State Street