An act relating to administrative and policy changes to tax laws

The Local Government Revenue Working Group (which would have evaluated municipal revenue sources and made recommendations by December 15, 2024) was entirely removed from the enacted bill.

The Wealth Tax Commission (which would have studied taxation of wealth and investment gains that escape income taxation, with a report due November 1, 2025) was entirely removed from the enacted bill.

New section authorizes municipalities to impose local option taxes: a 1 percent sales tax, a 1 percent meals and alcoholic beverages tax, or a 1 percent rooms tax. The Commissioner of Taxes may limit certifications to five municipalities per calendar year and may delay or reject further notices if additional certifications would cause undue burden on tax administration.

The machinery and equipment tax credit carryforward period was extended from December 31, 2026 to December 31, 2030, and the overall sunset of the credit was extended from July 1, 2026 to July 1, 2030. The annual reporting deadline was changed from February 28 to the due date of the taxpayer's tax return including extensions.

The sales tax exemption sunset date for advanced wood boilers was extended from July 1, 2024 to July 1, 2027.

New definition of 'casual sale' in 32 V.S.A. section 9701(12) that specifically excludes aircraft, snowmobiles, all-terrain vehicles, motorboats, and vessels 16 feet or more in length from the casual sale exemption.

New tax benefit for persons who sell a snowmobile, ATV, motorboat, or vessel and purchase another within three months: the 'sales price' for tax purposes on the new vehicle excludes the lesser of the sale price or average book value of the first vehicle. Similar relief applies for insurance payments after total destruction or damage accepted as trade-in.

The federal income tax law adoption date was updated from December 31, 2022 to December 31, 2023 in both the main provision (section 5824) and the definition of 'Laws of the United States' (section 7402(8)).

Gender-neutral language changes: 'his or her' was replaced with 'the person's' in several provisions relating to casual sales and vehicle trade-in tax benefits.

New report requirement: by December 15, 2025, the Commissioner of Motor Vehicles must report on changes in ATV registrations, revenue from ATV registrations, changes to VASA trail system funding, and suggestions for restoring revenue from ATV registrations, in consultation with the Vermont ATV Sportsman's Association.

The fuel tax exemption sunset date was extended from June 30, 2024 to June 30, 2029, a five-year extension that keeps the exemption in place much longer than originally enacted.

The Health IT Fund sunset date was extended from July 1, 2025 to July 1, 2026, adding one additional year of funding for health information technology infrastructure.

A new section (Sec. 15) adds fee waivers for certified copies of vital event certificates (birth, death, marriage records) for two groups: individuals attesting to a lack of fixed, regular, and adequate nighttime residence (homeless), and individuals aged 18-24 who resided in foster care or residential child care between ages 16 and 18. Effective July 1, 2024.

Extensive reformatting throughout: page count changed from 16 to 45, header format changed from 'No. 144' style to 'BILL AS PASSED BY THE HOUSE AND SENATE' style, line wrapping and spacing adjusted throughout the document.

The federal income tax link date is changed from December 31, 2022 to December 31, 2023 in both Section 5824 and Section 7402, meaning Vermont will adopt one additional year of federal tax law changes.

A new Wealth Tax Commission (Section 14) is created to study taxation of wealth and investment gains that currently escape income taxation, including mark-to-market approaches, residency rules, valuation of nonpublic assets, and interstate coordination. It must report by November 1, 2025 and ceases to exist July 1, 2026. $125,000 is appropriated from the General Fund in FY2025.

A new Local Government Revenue Working Group (Section 13) is created to evaluate municipal revenue sources and recommend new tools, including local option tax expansion beyond 1 percent, application to new bases like motor vehicle sales and cannabis, and a municipal revenue sharing program. It must report by December 15, 2024 and ceases to exist July 1, 2025.

The entire exemption for U.S. military retirement income and survivor benefit income (former Sections 8-9, amending 32 V.S.A. sections 5811 and 5830e) is deleted from the bill. Military retirees and surviving spouses will no longer receive this tax exclusion under this legislation.

A new county property tax exemption (Section 9, adding 32 V.S.A. section 3802(22)) exempts real and personal estate owned by a Vermont county from state property tax, but land and buildings outside the county's territorial limits remain subject to municipal property tax where situated.

A new fee waiver (Section 15, amending 18 V.S.A. section 5017) waives the $10 certified vital event certificate fee for individuals attesting to lack of fixed, regular, and adequate nighttime residence (homeless persons) and for individuals aged 18-24 who were in foster care or residential child care between ages 16-18.

A new utility property valuation section (Section 8) requires public utilities to submit sworn inventories of taxable property to the Division of Property Valuation and Review by March 31 each year, with valuations furnished to listers by May 1. Listers are required to use Division-provided valuations for electricity transmission and distribution property.

The fuel tax sunset (Section 10) is extended from June 30, 2024 to June 30, 2029, a five-year extension of the existing tax.

The Health IT Fund sunset (Sections 11-12) is extended from July 1, 2025 to July 1, 2026.

The property tax credit late fee structure is reorganized: the $15 reduction for claims filed after April 15 (Section 6066a(d)) is repealed, and a new tiered penalty system is added in Section 6068(b) where untimely claims are reduced by $15 (paid to municipality) and claims filed between October 15 and March 15 of the following year are reduced by $150 but issued directly to the claimant without requiring an adjusted municipal bill.

The fuel tax exemption sunset date was extended from June 30, 2024 to June 30, 2029, giving the exemption five additional years of effect.

The Health IT Fund sunset date was extended from July 1, 2025 to July 1, 2026, giving the fund one additional year before expiration.

The federal income tax law adoption date was updated from December 31, 2022 to December 31, 2023 in both Section 5824 and the definition of 'Laws of the United States' in Section 7402, incorporating one additional year of federal tax law changes into Vermont's income tax code.

Sports betting transactions were added to the list of potential new tax bases for local option taxes in the Local Government Revenue Working Group section (Sec. 13), expanding the range of revenue tools municipalities could consider.

Capitalization was corrected from 'county' to 'County' in the renter credit definition for Franklin or Grand Isle County (Sec. 5).