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H.888

AN ACT RELATING TO MISCELLANEOUS TAX AMENDMENTS

It is hereby enacted by the General Assembly of the State of Vermont:

* * * Service of Process Costs * * *

Sec. 1.  32 V.S.A. § 3262 is amended to read:

§ 3262.  Lien Fees; service of process costs

Notwithstanding section 502 of this title, the commissioner may charge against any collection of any liability any related lien fees specified in subdivision 1671(a)(6) or subsection 1671(c) of this title and any related service of process costs awarded to the department and paid by the commissioner.  Fees and costs collected under this section shall be credited to a special fund established and managed pursuant to subchapter 5 of chapter 7 of this title, and shall be available as payment for the fees of the clerk of the municipality and the costs of service.

* * * Use Value Appraisal * * *

Sec. 2.  32 V.S.A. § 3756 is amended to read:

§ 3756.  Qualification for use value appraisal

* * *

(b)  Before January 15, the director shall submit to the assessing officials a list including a description of each parcel of land and any farm buildings for which an application has been received and preliminarily approved for that year.  The listers shall review the list, and shall notify the director before February 15 if there is any reason why any property on the list should not be eligible for use value appraisal.

* * *

(f)  Each year, prior to March 15, the director shall determine whether previously classified property is still eligible for use value appraisal and whether the amount of the previous appraisal is still valid.  If the director determines that previously classified property is no longer eligible, or that the property has undergone a change in use such that the use change tax may be levied, in accordance with section 3757 of this chapter, or that the use value appraisal should be fixed at a different amount than the previous year, he or she shall thereafter notify the property owner of that determination by delivery of the notification to him or her in person or by mailing such notification to his or her last and usual place of abode.  If a change in use which would render the parcel ineligible occurs between March 1 and April 1, the director shall notify the owner by April 15.

* * *

(h)  By April March 15, the director shall mail to each municipality a list of property in the municipality which is to be taxed based on its use value appraisal.  The list shall include the owners’ names, a grand list number or description of each parcel of land to be appraised at use value, the acreage to be taxed on the basis of use value, the use values to be used for land, and the number and type of farm buildings to be appraised by the assessing officials at use value.  The assessing officials shall determine the listed value of the land to be taxed at use value and its estimated fair market value, and fill in these values and the difference between them on the form.  This form shall be used by the treasurer or the collector of current taxes to make up tax bills such that the owner is billed only for taxes due on his or her property not enrolled in the program, plus taxes due on the use value of property enrolled in the program. The assessing officials shall submit the completed form to the director by July 5.

* * *

Sec. 3.  32 V.S.A. § 3757(e) is amended to read:

(e)  The owner of any classified land receiving use value appraisal under this subchapter shall immediately notify the director of:

(1)  the development of the land, as defined in section 3752 of this chapter;

(2)  of any change or discontinuance of use of the classified land so that it is no longer eligible for use value appraisal or is eligible for a different use value appraisal under this subchapter; and

(3)  of any transfer of ownership.  A transfer of ownership, alone, will not affect eligibility of the parcel, and no new maps will be required solely because of a transfer, but failure to provide maps, a new application, or transfer information to the division of property valuation and review within 30 days of a request by the director will result in removal of the parcel from the program.

Sec. 4.  32 V.S.A. § 3758(a) is amended to read:

(a)  Whenever the director denies in whole or in part any application for classification as agricultural land or managed forest land or farm buildings, or grants a different classification than that applied for, or the director or assessing officials fix an erroneous a use value appraisal, or determine that previously classified property is no longer eligible or that the property has undergone a change in use, the aggrieved owner may appeal the decision of the director to the director within 30 days of the decision, and from there in the same manner and under the same procedures as an appeal from a decision of a board of civil authority, as set forth in subchapter 2 of chapter 131 of this title; and may appeal the decision of the assessing officials in the same manner as an appeal of a grand list valuation.


* * * FY09 Education Property Tax Rates * * *

Sec. 5.  FISCAL YEAR 2009 REDUCTION OF EDUCATION PROPERTY TAX RATE ADJUSTMENTS

(a)  For fiscal year 2009 only, the education property tax imposed under subsection 5402(a) of Title 32 shall be reduced from the rate of $1.59 and $1.10 and shall instead be at the following rates:

(1)  the tax rate for nonresidential property shall be $1.36 per $100.00; and

(2)  the tax rate for homestead property shall be $0.87 multiplied by the district spending adjustment for the municipality, per $100.00

of equalized property value as most recently determined under section 5405 of Title 32.

(b)  For claims filed in 2009 only, “applicable percentage” in subdivision 6066(a)(2) of Title 32 shall be reduced from 2.0 percent and instead shall be 1.80 percent multiplied by the fiscal year 2009 district spending adjustment for the municipality in which the homestead residence is located; but in no event shall the applicable percentage be less than 1.80 percent.


* * * Education Property Tax * * *

Sec. 6.  32 V.S.A. § 3843 is amended to read:

§ 3843.  Housing projects for low and moderate income occupants

(a)  The selectboard of a town, the board of aldermen or city council of a city, or the supervisor of an unorganized town or gore, may enter into an agreement on behalf of the municipality with a person who owns or intends to acquire or seeks to construct a federally subsidized, low or moderate income housing project, for payments by such person to the municipality in lieu of all taxes which would otherwise be assessed against the property, where federal assistance would not be available in the absence of such an agreement.  An agreement entered into under this section shall be in writing and shall be executed by the person owning or intending to acquire or to construct the project, and by the selectboard or aldermen, or in the case of an unorganized town or gore by the supervisor, on behalf of the municipality.  Property which is subject to an agreement entered into under this section shall be included in the equalized grand list of the municipality under chapter 123 of Title 16 in an amount which at the tax rate in effect in the municipality would, if the property were subject to taxation, yield a tax equal to the amount of the payments in lieu of taxes provided for under the agreement.  The amount of the payments and the date or dates when the payments are to be made shall be as specified in the agreement, and the term of the agreement shall not exceed 40 years, but otherwise the same may contain any provisions not inconsistent with this section  A municipality may vote at any regular or special meeting to exempt, in full or in part, for a term not to exceed 40 years, a federally subsidized low or moderate income housing project from education property tax if federal assistance would not be available in the absence of such an exemption.

(b)  An agreement entered into under this section shall be filed in the office of the clerk of the town or city executing the same within ten days following its execution or in the case of an agreement executed by the supervisor of an unorganized town or gore, in the county clerk’s office.  The text of the agreement shall also be posted in at least five conspicuous places within the municipality and published in a newspaper circulating in the municipality within ten days following its execution.  

(c)  The agreement shall become effective 20 days following its execution unless a petition is filed for a referendum pursuant to section 3844 of this title in which case it shall become effective pursuant to the provisions of section 3844 of this title.

Sec. 7.  REPEAL

     32 V.S.A. § 3844 (allowing permissive referendum to disapprove action by the town’s selectboard under 32 V.S.A. § 3843, “Housing projects for low and moderate income occupants”) is repealed as of May 1, 2008.

Sec. 8.  TRANSITION RULE

A federally subsidized low or moderate income housing project agreement entered into under 32 V.S.A. § 3843 prior to April 1, 2008, shall continue to be exempt from property tax to the extent and for the period provided for in the agreement; and shall affect the education property tax grand list and reduce the total education property tax due to the state from that municipality; provided, however, that beginning with fiscal year 2010, the agreement shall not affect the education property tax grand list nor reduce the total education property tax due to the state from that municipality, and that agreement shall be subject to the provisions of 32 V.S.A. § 5404a(d) for assessment of a separate tax on the municipality’s municipal grand list.

Sec. 9.  REPEAL

32 V.S.A. § 4186 (refunds based on false or incorrect abstracts) is repealed.

Sec. 10.  32 V.S.A. § 5402(b)(1) is amended to read:

(b)  Calculation of education tax.

(1)  The commissioner of taxes shall determine for each municipality the education tax rates under subsection (a) of this section, divided by the municipality’s most recent common level of appraisal.  The legislative body in each municipality shall then bill each property taxpayer at the homestead or nonresidential rate determined by the commissioner under this subdivision, multiplied by the education property tax grand list value of the property, properly classified as homestead or nonresidential property and without regard to any other tax classification of the property.  Each homestead property tax bill shall include notice of the education spending per equalized pupil in the taxpayer’s district and its relation to the base education payment; and the effect of the education spending in the district upon the homestead tax rate and the applicable percentage for income sensitivity; and shall also include an insert supplied by the commissioner of taxes which explains the relationship of district education spending and the common level of appraisal to property tax rates.  Tax bills shall show the tax due and the calculation of the rate determined under subsection (a) of this section, divided by the municipality’s most recent common level of appraisal, multiplied by the current grand list value of the property to be taxed.  Each homestead property tax bill shall include a copy of the two page document attached to the May 11, 2007 memorandum from the speaker of the house to the commissioner of taxes, which shall be entitled “About Your 20XX Taxes ‘The more you spend the more you pay’,” updated annually for each town by the commissioner of taxes.

Sec. 11.  32 V.S.A. § 5402(c) is amended to read:

(c)  The treasurer of each municipality shall by December 1 of the year in which the tax is levied and on June 1 of the following year pay to the state treasurer for deposit in the education fund one half of the municipality’s statewide nonresidential tax and one half of the municipality’s homestead education tax, as determined under subdivision (b)(1) of this section.  The commissioner of education shall determine the municipality’s net nonresidential education tax payment, and its net homestead education tax payment to the state, and payment based on grand list information received by the commissioner no later than the March 15 prior to the June 1 net payment.  Payment shall be accompanied by a return prescribed by the commissioner of education.  The municipality may retain 0.225 of one percent of the total education tax collected, only upon timely remittance of net payment to the state treasurer.  The municipality may also retain $15.00 for each late property tax adjustment claim filed after April 15 and before September 2, as notified by the department, for the cost of issuing a new property tax bill.

Sec. 12.  32 V.S.A. § 5410(h) is amended to read:

(h)  The filing of a new or corrected declaration or rescission of an erroneous declaration, on or before September 1 of the property tax year, that is not reflected in the first education fund payment under 16 V.S.A. § 4028 for that fiscal year or in a municipality’s first payment to the education fund under subsection 5402(c) of this title for that fiscal year, shall be reflected in the final net payment to or from the education fund for that fiscal year.  The municipality may retain one-eighth 0.225 of one percent of the tax collected.  Any reduction in tax paid to a municipality due to a new, revised, or rescinded declaration shall be paid by the municipality to the taxpayer no later than May 15 of the fiscal year.  No later than June 1, each municipality shall provide to the state treasurer a list of taxpayers who filed late or corrected declarations or rescinded declarations, the amount of the change in education tax, and the amount of any interest and penalty billed the taxpayer.

Sec. 13.  32 V.S.A. § 5412 is amended as follows:

§ 5412.  Valuation appeals Reduction of listed value and recalculation of education tax liability

(a)(1)  If a listed value is reduced as the result of an appeal or court action, and if the municipality files a written request with the commissioner within 30 days after the date of the settlement agreement, determination, or entry of the final order, or settlement agreement if the commissioner determines that the settlement value is the fair market value of the parcel, the commissioner shall recalculate the municipality’s education property tax liability for the year at issue, in accord with the reduced valuation, provided that:

(A)  the reduction in valuation is the result of an appeal under chapter 131 of this title to the director of property valuation and review or to a court, with no further appeal available with regard to that valuation, or any judicial decision with no further right of appeal, or a settlement of either an appeal or court action  if the commissioner determines that the settlement value is the fair market value of the parcel;

(B)  the municipality notified the commissioner of the appeal or court action, in writing, within ten days after notice of the appeal was filed under section 4461 of this title or after the complaint was served; and

(C)  as a result of the valuation reduction of the parcel, the value of the municipality’s grand list is reduced at least one percent.

(2)  The municipality’s request shall include a copy of the agreement, determination or final order, and any other documentation necessary to show the existence of these conditions.

(b)  To the extent that the municipality has paid that liability, the commissioner shall allow a credit for any reduction in education tax liability against the next ensuing year’s education tax liability or, at the request of the municipality, may refund to the municipality an amount equal to the reduction in education tax liability.

(c)  If a listed value is increased as the result of an appeal under chapter 131 of this title or court action, whether adjudicated or settled and the commissioner determines that the settlement value is the fair market value of the parcel, with no further appeal available with regard to that valuation, the commissioner shall recalculate the municipality’s education property tax for each year at issue, in accord with the increased valuation, and shall assess the municipality for the additional tax at the same time the commissioner assesses the municipality’s education tax liability for the next ensuing year, unless the resulting assessment would be less than $300.00.  Payment under this section shall be due with the municipality’s education tax liability for the next ensuing year.

(d)  Recalculation of education property tax under this section shall have no effect other than to reimburse or assess a municipality for education property tax changes which result from property revaluation. 

* * * Property Tax Adjustments * * *

Sec. 14.  32 V.S.A. § 6066a(c) is amended to read:

(c)  The commissioner shall notify the municipality of any claim and refund amounts unresolved by September 15 at the time of final resolution, including adjudication if any; provided, however, that towns will not be notified of any additional adjustment amounts after December 31 of the claim year, and such amounts shall be paid to the claimant by the commissioner.

Sec. 15.  32 V.S.A. § 6066a(d) is amended to read:

(d)  For late claims, filed after April 15, the property tax adjustment amount shall be reduced by $15.00, which shall be paid by the commissioner to the municipality for the cost of issuing a new property tax bill to the claimant.

Sec. 16.  32 V.S.A. § 6066a(f) is amended to read:

(f)  Property tax bills.

(1)  For amounts stated in the notice to towns on July 1, municipalities shall include on the homestead property tax bill notice to the taxpayer of the total amount allocated to payment of homestead education property tax liabilities and notice of the balance due.  By a majority of those voting at an annual or special meeting called for that purpose, the voters of a municipality may elect to Municipalities shall apply the amount allocated under this chapter to current-year property taxes to in equal amounts to each of the taxpayers’ property tax installments in order or pro rata that include education taxes.

(2)  For property tax adjustment amounts for which municipalities receive notice on or after September 15, municipalities shall issue a new homestead property tax bill with notice to the taxpayer of the total amount allocated to payment of homestead property tax liabilities and notice of the balance due.

(3)  The property tax adjustment amount determined for the taxpayer shall be allocated first to current-year property tax on the homestead parcel, next to current-year homestead parcel penalties and interest, next to any prior year homestead parcel penalties and interest, and last to any prior year property tax on the homestead parcel.  No adjustment shall be allocated to a property tax liability for any year after the year for which the claim or refund allocation was filed.  If the property tax adjustment amount exceeds the amount allocated under this subsection, the municipality shall refund the excess to the taxpayer, without interest, within 20 days of the first date upon which taxes become due and payable or 20 days after notification by the commissioner of education, whichever is later.  No municipal tax-reduction incentive for early payment of taxes shall apply to any amount allocated to the property tax bill under this chapter.

(4)  If the property tax adjustment amount as described in subsection (b) of this section exceeds the property tax, penalties and interest, due for the current and all prior years, the municipality shall refund the excess to the taxpayer, without interest, within 20 days of the first date upon which taxes become due and payable or 20 days after notification by the commissioner of education, whichever is later.

Sec. 17.  32 V.S.A. § 6063 is amended to read:

§ 6063.  CLAIM AS PERSONAL; ADJUSTMENT AMOUNT AT TIME OF

              TRANSFER

(a)  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 property tax adjustment amount shall be credited to the homestead property tax liability of the claimant’s estate, as provided in section 6066a of this title.

(b)  In case of sale or transfer of a residence, any property tax adjustment amounts related to that residence shall be allocated to the seller at closing unless the parties otherwise agree. 

Sec. 18.  REPEAL

32 V.S.A. § 6066(f) (proration of unadjusted property tax at time of sale) is repealed as of January 1, 2008.

Sec. 19.  32 V.S.A. § 6066a(h) is added to read:

     (h)  Adjusted property tax bills shall be public records, and the provisions of this section requiring municipalities to include on the homestead property tax bill notice of the adjusted property tax liability shall override any confidentiality provisions of section 3102 of this title. 

Sec. 20.  1 V.S.A. § 317(c) is amended to read:

(c)  The following public records are exempt from public inspection and copying:

* * *

(6)  a tax return and related documents, correspondence and certain types of substantiating forms which include the same type of information as in the tax return itself filed with or maintained by the Vermont department of taxes or submitted by a person to any public agency in connection with agency business; for purposes of this section, property tax bills and related documents, including any adjustment to the property tax liability under chapter 154 of Title 32, are not tax returns and do not contain the same type of information as a tax


return and are not exempt from public disclosure under this subchapter.

* * *

* * * Capital Gains* * *

Sec. 21.  32 V.S.A. § 5811(21)(B) is amended to read:

(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, but the total amount of decrease under this subdivision (ii) shall not exceed 40 percent of federal taxable income.

* * * Refund Procedure * * *

Sec. 22.  32 V.S.A. § 3203 is amended to read:

§ 3203.  Notice of deficiencies; assessment of penalties and interest; denial of refund

If the commissioner finds that any taxpayer has failed to discharge in full the amount of any tax liability incurred under this title, or has claimed a refund in error or that a penalty or interest should be assessed under it this title, the commissioner shall notify the taxpayer of the deficiency or denial of refund or assess the penalty or interest, as the case may be, by mail.  The mailing of the notice shall be presumptive evidence of its receipt by the person to whom it is addressed.  Any period of time which is determined under this chapter by the giving of notice shall commence to run from the date of mailing of the notice.

Sec. 23.  32 V.S.A. § 5882 is amended to read:

§ 5882.  Time limitation on notices of deficiency and assessment of penalty and interest

(a)  The commissioner may notify a taxpayer of a deficiency with respect to the payment of any tax liability, or assess a penalty or interest with respect thereto, in accordance with section 5881 3202 of this title, at any time within three years after the date that tax liability was originally required to be paid under this chapter.

(b)  Notwithstanding subsection (a) of this section:

(1)  If the taxpayer fails to file a proper return with respect to any tax liability at the time prescribed for its filing, the notification or assessment may be made at any time before the end of three years after the taxpayer files such a return.

(2)  If the deficiency is caused by reason of fraud or the willful intent of the taxpayer to defeat or evade this chapter, the notification or assessment may be made at any time.

(3)  If the notice of deficiency or assessment is founded upon an assertion or determination by the United States that the taxable income, or income tax liability, of the taxpayer under the laws of the United States is greater than the amount of the taxable income or income tax liability reported on any return of the taxpayer filed under the laws of the United States, the notification or assessment under section 5881 3203 of this title may be made within the time prescribed under subsection (a) of this section, or at any time before the expiration of six months after the date the commissioner is notified, in writing, by the taxpayer or by the United States of the federal assertion or determination, whichever period is the later to expire.

(4)  If the taxpayer and commissioner agree, the notification or assessment may be made at any time before the date so agreed upon.

(5)  If a person withholds tax under subchapter 4 of this chapter but under-reports the tax withheld by 20 percent or more, the notification or assessment may be made at any time before the expiration of six years from the date of the filing of such return.

(6)  If the notice or deficiency is based upon a refund that was paid in error, the notification or assessment under section 3203 of this title may be made within the time prescribed under subsection (a) of this section or at any time before the expiration of one year after the date the refund was paid, whichever period is the later to expire.


Sec. 24.  32 V.S.A. § 5883 is amended to read:

§ 5883.  Determination of deficiency, refund, penalty, or interest

Upon receipt of a notice of deficiency, of denial or reduction of a refund claim, or of assessment of penalty or interest under section 5881 3203 of this title, the taxpayer may, within 60 days after the date of mailing of the notice or assessment, petition the commissioner in writing for a determination of that deficiency, refund, or assessment.  The commissioner shall thereafter grant a hearing upon the matter and notify the taxpayer in writing of his or her determination concerning the deficiency, penalty or interest.

Sec. 25.  32 V.S.A. § 5884(a) is amended to read:

(a)  At any time within three years after the date a return is required to be filed under this chapter, or six months after a refund was received from the United States with respect to an income tax liability, or an amount of taxable income, under the laws of the United States, reported in a return filed under the laws of the United States for the taxable year, with respect to which that return was filed under this chapter, whichever is later, a taxpayer may petition the commissioner for the refund of all or any part of the amount of tax paid with respect to the return.  Unless the period is extended by agreement of the commissioner and the taxpayer, the commissioner shall thereafter, upon notice to the taxpayer, hold a hearing on the claim and shall notify the taxpayer of his or her determination of the claim within 30 days of the hearing.  The failure of the commissioner to refund the amount claimed by a taxpayer within six months of the date of the petition for the refund, under this subsection, shall be considered to be a notification to the taxpayer of the commissioner’s determination concerning the claim.  The notification shall be considered to have been given on the date of the expiration of the six-month period. that the petition has been denied.  Denial of such petition in whole or in part may be appealed to the commissioner pursuant to section 5883 of this title.

* * * Unused Income Tax Credits * * *

Sec. 26.  REVIEW OF CERTAIN INCOME TAX CREDITS

The house committee on ways and means shall in January 2012 determine whether the tax credits under 32 V.S.A. § 5828 (capital gain credit for sale of a mobile home park), § 5830c (charitable investment tax credit) or § 5930u (affordable housing investment tax credit) have been used by a corporate taxpayer against its corporate income tax in the three years 2008 through 2010 and, if not, shall consider whether to repeal the unused credits as they apply to corporate income tax.

Sec. 27.  REPEAL 

32 V.S.A. § 3802(10) (property tax exemption for Civil and Spanish American war veterans) is repealed.


* * * Tax Expenditures* * *

Sec. 28.  32 V.S.A. § 312(c) is added to read:

(c)  Based on the information contained in the tax expenditure report, the commissioner shall recommend to the general assembly that any expenditure that has cost less than $50,000.00 or has been claimed by fewer than ten taxpayers in each of the three preceding years be repealed two years hence.

Sec. 29.  TAX EXPENDITURE STUDY

The joint fiscal office (JFO) shall review the state’s tax expenditures for items which could be considered for repeal for policy, fiscal, or administrative reasons in order to allow offset of an anticipated revenue shortfall or to allow for tax reduction.  The department of taxes shall provide research and technical assistance to JFO for this study.  JFO shall submit its findings and recommendations to the house committee on ways and means and the senate committee on finance by January 9, 2009. 

* * * Meals and Rooms Tax Petitions * * *

Sec. 30.  32 V.S.A. § 9243 is amended to read:

§ 9243.  Returns and payment

(a)  Where the meals and rooms tax liability under this chapter for the immediately preceding full calendar year has been (or would have been in cases when the business was not operating for the entire year) $500.00 or less, the gross receipts taxes imposed by this chapter shall be due and payable in quarterly installments on or before the twenty-fifth day of the calendar month succeeding the quarter ending the last day of March, June, September and December of each year.  In all other cases, the gross receipts tax imposed by this chapter shall be due and payable monthly on or before the twenty-fifth (23rd of February) day of the month following the month for which the tax is due.  The commissioner may authorize payment of the tax due by electronic funds transfer.  The commissioner may require payment by electronic funds transfer from any taxpayer who is required by federal tax law to pay any federal tax in that manner, or from any taxpayer who has submitted to the tax department two or more protested or otherwise uncollectible checks with regard to any state tax payment in the prior two years.  Each operator shall make out and sign under the pains and penalties of perjury a return for each quarter or month.  The return shall be filed with the commissioner on a form prescribed by the commissioner. The commissioner shall distribute return forms to the operators, but no operator shall be excused from liability for failure to file a return or pay the tax because he has failed to receive a form.  A remittance for the amount of taxes shall accompany each quarterly or monthly return.  Returns shall be made on forms provided by the commissioner. Payment of taxes by electronic funds transfer does not affect the requirement to file returns.

(b)  The commissioner may require returns and amended returns to be filed within 20 days after notice and to contain the information specified in the notice.  Upon failure of a taxpayer to file any return required under this chapter within 20 days of the date of a notice to the taxpayer, the commissioner may petition a judge of the superior court in the county wherein the taxpayer resides or has a place of business (or, if the taxpayer neither resides nor has a place of business in this state, the commissioner may petition the Washington superior court), and upon the petition of the commissioner and a hearing, the judge shall issue a citation requiring the taxpayer (and, if the taxpayer is a corporation, any principal officer of such corporation) to file a proper return in accordance with this chapter, upon pain of contempt.  The order of notice upon the petition shall be returnable not later than 20 days after the filing of the petition.  The petition shall be heard and determined on the return day or on such day thereafter as the court shall fix, having regard to the speediest possible determination of the case consistent with the rights of the parties.  The judgment shall include costs in favor of the prevailing party.  The commissioner’s authority to petition under this subsection is in addition to the commissioner’s authority under subsection 9273 of this title to compute the tax liability of a taxpayer who fails to file a required return or files an incorrect or insufficient return.


* * * Annual Update of Links to Federal Law * * *

Sec. 31.  32 V.S.A. § 5824 is amended to read:

§ 5824.  ADOPTION OF FEDERAL INCOME TAX LAWS

The statutes of the United States relating to the federal income tax, as in effect for taxable year 2006 2007, but without regard to federal income tax rates under Section 1 of the Internal Revenue Code, are hereby adopted for the purpose of computing the tax liability under this chapter.

Sec. 32.  32 V.S.A. § 7475 is amended to read:

§7475.  ADOPTION OF FEDERAL ESTATE AND GIFT TAX LAWS

The laws of the United States, relating to federal estate and gift taxes as in effect on January 1, 2007 2008, are hereby adopted for the purpose of computing the tax liability under this chapter, except with the credit for state death taxes under Section 2011 and 2604 as in effect on January 1, 2001, of the Internal Revenue Code, and without any deduction for state death taxes under Section 2058 of the Internal Revenue Code.

* * * Vermont Employment Growth Incentive Grace Period * * *

Sec. 33.  32 V.S.A. § 5930b(c)(5) and (6) are amended to read:

(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.

(6)  A business whose application is approved and, in the first, second, or third year of the award period, fails to meet or exceed its payroll target and one out of two of its jobs and capital investment targets may not claim incentives in that year.  To the extent such business reaches its first, second, or third year award period targets within the succeeding two calendar year reporting periods immediately succeeding year one, two, or three of the award period, which ever is applicable, such business may claim incentives in five-year installments as provided in subdivisions (1) through (4) of this subsection.  A business which fails to meet or exceed its payroll target and one of its two jobs and capital investment targets within this time frame shall forfeit all authority under this section to earn and claim incentives for award period year one, two, or three, as applicable, and any future award period years.  The department of taxes shall notify the Vermont economic progress council that the first, second, or third year award period targets have not been met within the prescribed period, and the council shall rescind authority for the business to earn incentives for the activity in year one, two, or three, as applicable, and any future award period years.


* * * Wood Products Tax Credit * * *

Sec. 34.  Sec. 9 of No. 212 of the Acts of the 2005 Adj. Sess. (2006) is amended to read:

Sec. 9.  SUNSET

Sec. 2 of Act No. 2 of the Acts of 2005 is amended to read:

Sec. 2.  EFFECTIVE DATE; SUNSET

Sec. 1 of this act (wood products manufacture tax credit) shall apply to taxable years beginning on or after July 1, 2005.  32 V.S.A. § 5930y is repealed July 1, 2008 2011, and no credit under that section shall be available for any taxable year beginning on or after July 1, 2008 2011

Sec. 35.  WOOD PRODUCTS TAX CREDIT REPORT

     By January 15 in each of the years 2009, 2010, and 2011, the commissioner of economic development shall report to the house committee on ways and means and the senate committee on finance the effect of the wood products manufacture tax credit under 32 V.S.A. § 5930y on wood products manufacturing employment and on the outlook for future wood products manufacturing activity in Vermont by any taxpayers claiming the credit in the three years prior to each report.


* * * Common Level of Appraisal after Townwide Reappraisal* * *

Sec. 36.  COMMON LEVEL OF APPRAISAL FOLLOWING 2007

               TOWNWIDE REAPPRAISAL

In the case of a townwide reappraisal which adjusts the value of only the April 1, 2007, grand list, the common level of appraisal under 32 V.S.A.

§ 5406(c) to be applied to that grand list shall be no less than 100 percent; and any resulting reduction in the municipality’s fiscal-year 2008 education tax liability to the education fund shall be reimbursed as a credit on the municipality’s fiscal-year 2009 education tax liability to the education fund. 

* * * Ratification of Act No. 81 Affordable Housing Provision * * *

Sec. 37.  RATIFICATION OF ENROLLED VERSION OF H.521 IN ACT 81

               OF 2007

The general assembly hereby ratifies Section 10 of the enrolled version of No. 81 of the Acts of 2007 as the correct version of the amendments to 32 V.S.A. § 3481(1) in that act.

* * * Fire Service Training Council * * *

Sec. 38.  32 V.S.A. § 8557 is amended to read:

§ 8557.  VERMONT FIRE SERVICE TRAINING COUNCIL

(a)  Sums for the expenses of the operation of training facilities and curriculum of the Vermont fire service training council not to exceed $400,000.00 $600,000.00 per year shall be paid to the fire service training council safety special fund created by section 3157 of Title 20 by insurance companies writing fire, homeowners multiple peril, allied lines, farmowners multiple peril, commercial multiple peril (fire and allied lines), private passenger auto physical damage and commercial auto physical damage policies on property and situated within the state of Vermont within 30 days after notice from the commissioner of banking, insurance, securities, and health care administration of such estimated expenses.  Captive and surplus line companies shall be excluded from the effect of this section.  The commissioner shall annually, on or before July 1, apportion such charges among all such companies and shall assess them for the same on a fair and reasonable basis as a percentage of their gross direct written premiums on such insurance written during the second prior calendar year on property situated in the state.  An amount not less than $100,000.00 shall be specifically allocated to the provision of what are now or formerly referred to as Level I, units I, II, and III (basic) courses for entry level firefighters.

* * *

Sec. 39.  32 V.S.A. § 8557 is amended to read:

§ 8557.  VERMONT FIRE SERVICE TRAINING COUNCIL

(a)  Sums for the expenses of the operation of training facilities and curriculum of the Vermont fire service training council not to exceed $600,000.00 $800,000.00 per year shall be paid to the fire safety special fund created by section 3157 of Title 20 by insurance companies writing fire, homeowners multiple peril, allied lines, farmowners multiple peril, commercial multiple peril (fire and allied lines), private passenger auto physical damage and commercial auto physical damage policies on property and situated within the state of Vermont within 30 days after notice from the commissioner of banking, insurance, securities, and health care administration of such estimated expenses.  Captive and surplus line companies shall be excluded from the effect of this section.  The commissioner shall annually, on or before July 1, apportion such charges among all such companies and shall assess them for the same on a fair and reasonable basis as a percentage of their gross direct written premiums on such insurance written during the second prior calendar year on property situated in the state.  An amount not less than $100,000.00 shall be specifically allocated to the provision of what are now or formerly referred to as Level I, units I, II, and III (basic) courses for entry level firefighters.

* * *

Sec. 40.  20 V.S.A. § 3152(a) is amended to read:

(a)  The Vermont fire service training council is created.  The council shall consist of 11 12 members.  The commissioner of labor, the commissioner of public safety, the director of fire safety, the commissioner of forests, parks and recreation, the commissioner of education, and the commissioner of health, or their designees, shall serve as ex officio members of the council.  Five Six members shall be appointed by the governor for three-year terms.  Of the appointed members, the governor shall appoint one member who during incumbency is a representative of the Vermont career fire chiefs association; one member who, at the time of appointment, is a representative of the professional firefighters of Vermont; one member, who, at the time of appointment, is a representative of the Vermont fire chiefs association and who is a fire chief of a volunteer fire department; one member who, at the time of appointment, is a representative of the Vermont state firefighters association and who is a volunteer firefighter; one member who during incumbency is an employee, officer, or director of an insurance company domiciled in this state and subject to the assessment under 32 V.S.A. § 8557; and one member of the public who is not involved in fire service. To the extent possible, appointments shall be geographically representative.

* * * Elimination of Pass-Through of New Accelerated Depreciation

 on the Personal Income Tax * * *

Sec. 41.  32 V.S.A. § 5811(21) is amended to read: 

(21)  “Taxable income” means federal taxable income determined without regard to Section 168(k) of the Internal Revenue Code and:

* * *


Sec. 42.  EXTENSION OF 2007 FILING DEADLINE FOR CERTAIN

                PROPERTY TAX ADJUSTMENT CLAIMS

(a)  Any 2007 late-filed property tax adjustment claim which was denied before December 1, 2007, may be refiled before August 1, 2008, if all the following conditions are met:

(i)  the claimant submits a written request for reconsideration of claim, including all information required by the commissioner, in the form prescribed by the commissioner, signed by the claimant under pains and penalties of perjury; and

(ii)  the first 2007 property tax bill issued in the claimant’s town was issued after September 4, 2007; and

(iii)  the commissioner, in his judgment, finds that the claimant was unable to file the claim by September 4, 2007, as a result of sickness, absence, or other disability, or other good cause.

(b)  The commissioner’s determination to allow or deny a claim under this section shall be final, and the commissioner shall not notify the municipality of the claimant’s property tax adjustment, but instead shall refund the property tax adjustment amount to the claimant, without interest and without penalty under 32 V.S.A. § 6066a(d).


* * * Effective Dates * * *

Sec. 43.  EFFECTIVE DATES 

This act shall take effect upon passage, except as follows:

(1)  Sec. 10 (property tax bill notice on education spending and rates) shall apply to property tax bills for 2008 and after.

(2)  Sec. 11 provisions regarding final date for grand list information used in net education tax calculation shall take effect July 1, 2008; and Sec. 11 provisions regarding town retention of $15.00 late fee for property tax adjustment claims shall apply to claims filed in 2008 and after.

(3)  Sec. 12 (increasing amount municipalities may retain to 0.225 of one percent of education taxes collected) shall apply to education property taxes for fiscal years 2009 and after.

(4)  Sec. 15 (commissioner does not pay $15.00 late fee to town) shall apply to claims filed in 2008 and after.

(5)  Sec. 16  (property tax adjustments allocated to property tax installments) shall apply to property taxes for fiscal years 2009 and after.

(6)  Secs. 19 and 20 (adjusted property tax bills are not confidential and are public records) shall be effective retroactively as of January 1, 2007.

(7)  Sec. 21 (regarding a limitation on the reduction of taxable income by the capital gains deduction) shall apply to taxable years 2008 and after.

(8)  Sec. 31 of this act (update of link to federal income tax laws) shall apply to taxable years beginning on or after January 1, 2007; and Sec. 32 of this act (update of link to federal estate and gift tax laws) shall apply to estates of decedents with a date of death on or after, and gifts made on or after, January 1, 2007.

(9)  Sec. 33 of this act (VEGI grace period for first year) shall take effect retroactively as of January 1, 2007.

(10)  Sec. 38 ($600,000.00 fire training council assessment) shall apply to fiscal year 2009; and Sec. 39 ($800,000.00 fire training council assessment) shall apply to fiscal years 2010 and after.

(11)  Sec. 41 (block of federal bonus depreciation on personal income tax) shall apply to taxable years 2008 and after, and shall apply only to assets placed in service on or after January 1, 2008.



Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont


www.leg.state.vt.us