An act relating to miscellaneous administrative and policy changes to the tax laws

The property tax assessment date is changed from April 1 to January 1 throughout the tax code, affecting how real estate, personal property, homesteads, managed forestland plans, and numerous other items are valued and listed for taxation.

Vermont's position on the federal tax credit program for contributions to scholarship granting organizations (26 U.S.C. section 25F) is changed from a flat prohibition on participation to allowing the General Assembly to annually elect to participate by enactment of an act, with requirements to identify qualifying organizations and designate a responsible party.

The equalization study provisions are expanded to require that tax increment financing districts and housing development sites under 24 V.S.A. chapter 53 subchapter 7 include fair market value (rather than original taxable value) in the equalized education property tax grand list.

The threshold for requiring a Vermont estate tax return (when no federal return is required) is raised from $2,750,000 to $5,000,000 in combined federal gross estate and adjusted taxable gifts made within two years of death.

New homestead declaration provisions are added for: (1) joint tenants with a former spouse who have possession per a divorce decree, (2) owners of portions of a duplex where all owners occupy their units as principal residences (tax is proportional to unit value), and (3) joint tenants with a spouse in active divorce or separation proceedings (claimant is responsible for 100 percent of property tax).

The Health IT Fund sunset date is extended from July 1, 2026 to July 1, 2031, keeping the health care claims tax in effect for five additional years.

A new 3.4 percent property transfer tax rate is imposed on transfers of residential property that is fit for year-round habitation, will not be the transferee's principal residence, and where no landlord certificate is filed. A penalty provision applies if a fraudulent landlord certificate is used to avoid this rate.

The land use change tax revenue distribution is restructured: the municipality receives the lesser of half the tax or $2,000 (if it timely determines value), with three-quarters of the remainder going to the Education Fund and one-quarter to the General Fund. If the municipality fails to act within 30 days, it forfeits its share entirely.

A new funding tier is added for the Down Payment Assistance Program: fiscal years 2027 through 2031 allow up to $350,000 in total first-year credit allocations, increased from the $250,000 cap applicable in fiscal years 2020 through 2026.

The inflation index used for adjusting education funding thresholds, contract renewal limits, and Medicaid incentive fund thresholds is changed from the New England Economic Project Cumulative Price Index to the National Income and Product Accounts (NIPA) implicit price deflator for state and local government purchases of goods and services, consumption expenditures and gross investment.

Communications service provider inventory submission deadline is changed from March 31 to April 15, with a new penalty of up to $100 per violation for late or non-conforming submissions. Willful omission of an inventory now also bars the provider from any statutory appeal of the Division's valuation.

The Department of Fish and Wildlife Commissioner is given new authority to issue licenses for long-term use of department lands for research, commercial use, or regulated utilities, and to set conservation camp tuition. A report with recommended fees must be submitted to the legislature by January 15, 2027, after which fees must be established by statute.

Several sections of subchapter 9 (Delinquent Taxes) governing the Director's supervision of municipal tax collectors - including provisions for conferences, meetings, and returns to the Director - are marked as repealed.

The property tax assessment date is changed from April 1 to January 1 across dozens of sections, fundamentally shifting when property ownership and value are determined for tax purposes statewide.

The House version permanently prohibited Vermont from participating in the federal tax credit program for contributions to scholarship granting organizations (26 U.S.C. 25F). The enacted version instead allows the General Assembly to annually elect to participate by passing an act, and requires identifying qualifying organizations.

The equalization study provisions are expanded to include housing development sites under 24 V.S.A. chapter 53, subchapter 7 in addition to tax increment financing districts when determining equalized education property tax grand lists.

The estate tax filing threshold is raised from $2,750,000 to $5,000,000, meaning estates below $5 million no longer need to file a Vermont estate tax return even if they have property in Vermont.

A new homestead credit provision is added: a joint tenant or tenant by the entirety with a spouse not in the household who is in a divorce or separation proceeding is entitled to 100 percent of the property tax for credit purposes.

The Health IT Fund sunset date is extended from July 1, 2026 to July 1, 2031, keeping the health care claims tax in effect for five additional years.

The deadline for communications service providers to submit sworn inventories of taxable property is changed from March 31 to April 15.

A new funding tier is added for the Down Payment Assistance Program: fiscal years 2027 through 2031 allow up to $350,000 in total first-year credit allocations, up from $250,000 for fiscal years 2020-2026.

The inflation index used to adjust education funding amounts, Medicaid reimbursement thresholds, and property tax equalization calculations is changed from the New England Economic Project Cumulative Price Index to the NIPA implicit price deflator for state and local government purchases of goods and services published by the Bureau of Economic Analysis.

The Department of Fish and Wildlife fee-setting authority is restructured: the Commissioner may now issue licenses for long-term use of lands for research, commercial use, or regulated utilities, but is prohibited from requiring a license or permit to access Department lands. A report with recommended fees must be submitted to the legislature by January 15, 2027.

Several sections of Subchapter 9 on delinquent taxes (state oversight of municipal tax collection, including Director supervision, collector meetings, and return requirements) are repealed, reducing state oversight of local tax collection practices.

The Health IT Fund sunset date is extended from July 1, 2026 to July 1, 2031, keeping the health care claims tax in effect five additional years to fund the Health IT Fund.

The estate tax filing threshold is raised from $2,750,000 to $5,000,000 (sum of federal gross estate and adjusted taxable gifts made within two years of death), meaning fewer estates will be required to file a Vermont estate tax return.

The introduced bill explicitly stated that Vermont shall not participate in the federal Section 25F scholarship granting organization credit program. The passed version replaces this with a provision allowing the General Assembly to annually elect to participate by enactment, and requires any such election to be made by the legislature rather than another state official.

A new provision is added to the equalization study section allowing the unified towns and gores of Essex County to be treated as one municipality for determining an equalized education property grand list and coefficient of dispersion, if the Director determines all such entities have a uniform appraisal schedule and practices.

A new funding tier is added for the Down Payment Assistance Program: in fiscal years 2027 through 2031, the allocating agency may award up to $350,000 in total first-year credit allocations (up from the $250,000 cap for FY 2020-2026).

The land use change tax section adds detailed procedural requirements including a 30-day determination timeline for local assessing officials, appeal rights with a 30-day window, payment due 30 days after notice is mailed, distribution rules (municipality receives the lesser of half the tax or $2,000; three-quarters of remainder to Education Fund; one-quarter to General Fund), and form requirements signed under penalty of perjury.

A new Section 19 was added in the official version that designates the Vermont General Assembly as the sole entity authorized to elect participation in the federal tax credit program under 26 U.S.C. section 25F, and explicitly states that Vermont shall not participate in that program. Any contrary election by another state official or entity is declared void.

Header changed from 'AS PASSED BY HOUSE' to 'BILL AS PASSED BY THE HOUSE', page count increased from 56 to 60, and a detailed subject line plus statement of purpose were added in the official version. These are formatting differences between the unofficial and official printings.