Vermont 2025-2026 Regular Session

Vermont Senate Bill S0104 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	BILL AS INTRODUCED S.104
2	2	2025 Page 1 of 61
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5	5	VT LEG #381212 v.3
6	6	S.104 1
7	7	Introduced by Senator Vyhovsky 2
8	8	Referred to Committee on 3
9	9	Date: 4
10	10	Subject: Education; State funding of public education; taxation and finance; 5
11	11	education property tax; education income tax; education finance 6
12	12	Statement of purpose of bill as introduced: This bill proposes to transition 7
13	13	from an education property tax to an education income tax in fiscal year 2027. 8
14	14	This bill would create an education tax that is based on the income of Vermont 9
15	15	homeowners with a rate determined by locally voted budgets. This bill 10
16	16	proposes to impose the education tax on the income of all Vermont residents 11
17	17	(both homeowners and renters) in fiscal year 2030. This bill would eliminate 12
18	18	the homestead education property tax and levy the nonhomestead education 13
19	19	property tax on all property except residential dwellings and the two-acre 14
20	20	parcel surrounding the dwellings. This bill would continue to provide the 15
21	21	existing renter credit and create a new renter credit against the education 16
22	22	income tax. This bill also proposes to update the property tax credit income 17
23	23	sensitivity measures to provide relief to a broader class of Vermont taxpayers 18
24	24	in fiscal year 2026. This bill also proposes to address revenue lost due to the 19
25	25	expansion of the income sensitivity measures by creating a one-year new top 20
26	26	marginal tax rate on income. 21 BILL AS INTRODUCED S.104
27	27	2025 Page 2 of 61
28	28
29	29
30	30	VT LEG #381212 v.3
31	31	An act relating to income-based education funding 1
32	32	It is hereby enacted by the General Assembly of the State of Vermont: 2
33	33	* * * Income Sensitivity and New Income Tax Bracket * * * 3
34	34	Sec. 1. 32 V.S.A. § 6066 is amended to read: 4
35	35	§ 6066. COMPUTATION OF PROPERTY TAX CREDIT AND RENTER 5
36	36	CREDIT 6
37	37	(a) An eligible claimant who owned the homestead on April 1 of the year in 7
38	38	which the claim is filed shall be entitled to a credit for the prior year’s 8
39	39	homestead property tax liability amount determined as follows: 9
40	40	(1)(A) For a claimant with household income of $90,000.00 10
41	41	$130,000.00 or more: 11
42	42	(i) the statewide education tax rate, multiplied by the equalized 12
43	43	value of the housesite in the taxable year; 13
44	44	(ii) minus (if less) the sum of: 14
45	45	(I) the income percentage of household income for the taxable 15
46	46	year; plus 16
47	47	(II) the statewide education tax rate, multiplied by the 17
48	48	equalized value of the housesite in the taxable year in excess of $225,000.00 18
49	49	$400,000.00. 19
50	50	(B) For a claimant with household income of less than $90,000.00 20
51	51	but more than $47,000.00 $60,000.00, the statewide education tax rate, 21 BILL AS INTRODUCED S.104
52	52	2025 Page 3 of 61
53	53
54	54
55	55	VT LEG #381212 v.3
56	56	multiplied by the equalized value of the housesite in the taxable year, minus (if 1
57	57	less) the sum of: 2
58	58	(i) the income percentage of household income for the taxable 3
59	59	year; plus 4
60	60	(ii) the statewide education tax rate, multiplied by the equalized 5
61	61	value of the housesite in the taxable year in excess of $400,000.00 6
62	62	$1,000,000.00. 7
63	63	(C) For a claimant whose household income does not exceed 8
64	64	$47,000.00 $60,000.00, the statewide education tax rate, multiplied by the 9
65	65	equalized value of the housesite in the taxable year, minus the lesser of: 10
66	66	(i) the sum of the income percentage of household income for the 11
67	67	taxable year plus the statewide education tax rate, multiplied by the equalized 12
68	68	value of the housesite in the taxable year in excess of $400,000.00 13
69	69	$1,000,000.00; or 14
70	70	(ii) the statewide education tax rate, multiplied by the equalized 15
71	71	value of the housesite in the taxable year reduced by $15,000.00. 16
72	72	* * * 17
73	73	(3) A claimant whose household income does not exceed $47,000.00 18
74	74	shall also be entitled to an additional credit amount from the claimant’s 19
75	75	municipal taxes for the upcoming fiscal year that is equal to the amount by 20
76	76	which the municipal property taxes for the municipal fiscal year that began in 21 BILL AS INTRODUCED S.104
77	77	2025 Page 4 of 61
78	78
79	79
80	80	VT LEG #381212 v.3
81	81	the taxable year upon the claimant’s housesite exceeds a percentage of the 1
82	82	claimant’s household income for the taxable year as follows: 2
83	83	If household income (rounded then the taxpayer is entitled to 3
84	84	to the nearest dollar) is: credit for the reduced property tax in 4
85	85	excess of this percent of that income 5
86	86	$0.00 — 9,999.00 1.50 6
87	87	$10,000.00 — 47,000.00 3.00 7
88	88	(4) A claimant whose household income does not exceed $47,000.00 8
89	89	$60,000.00 shall also be entitled to an additional credit amount from the 9
90	90	claimant’s statewide education tax for the upcoming fiscal year that is equal to 10
91	91	the amount by which the education property tax for the municipal fiscal year 11
92	92	that began in the taxable year upon the claimant’s housesite, reduced by the 12
93	93	credit amount determined under subdivisions (1) and (2) of this subsection, 13
94	94	exceeds a percentage of the claimant’s household income for the taxable year 14
95	95	as follows: 15
96	96	If household income (rounded then the taxpayer is entitled to 16
97	97	to the nearest dollar) is: credit for the reduced property tax in 17
98	98	excess of this percent of that income 18
99	99	$0.00 — 9,999.00 0.50 19
100	100	$10,000 — 24,999.00 1.50 20
101	101	$25,000.00 — 47,000 46,999.00 2.00 21 BILL AS INTRODUCED S.104
102	102	2025 Page 5 of 61
103	103
104	104
105	105	VT LEG #381212 v.3
106	106	$47,000 — 60,000.00 lesser of 2.50 1
107	107	or town rate 2
108	108	(5) In no event shall the credit provided for in subdivision (3) or (4) of 3
109	109	this subsection exceed the amount of the reduced property tax. The credits 4
110	110	under subdivision (4) of this subsection shall be calculated considering only 5
111	111	the tax due on the first $400,000.00 $1,000,000.00 in equalized housesite 6
112	112	value. 7
113	113	* * * 8
114	114	Sec. 2. INTENT; OFFSETTING LOSSES TO THE EDUCATION FUND 9
115	115	It is the intent of the General Assembly to transfer 12.5 percent of the 10
116	116	revenue collected pursuant to the highest marginal tax rate imposed under 32 11
117	117	V.S.A. § 5822 from the General Fund to the Education Fund in fiscal year 12
118	118	2026 to offset losses to the Education Fund resulting from the income 13
119	119	sensitivity adjustments adopted pursuant to this act. 14
120	120	Sec. 3. 32 V.S.A. § 5822 is amended to read: 15
121	121	§ 5822. TAX ON INCOME OF INDIVIDUALS, ESTATES, AND TRUSTS 16
122	122	(a) A tax is imposed for each taxable year upon the taxable income earned 17
123	123	or received in that year by every individual, estate, and trust, subject to income 18
124	124	taxation under the laws of the United States, in an amount determined by the 19
125	125	following tables, and adjusted as required under this section: 20
126	126	(1) Married individuals filing joint returns and surviving spouses: 21 BILL AS INTRODUCED S.104
127	127	2025 Page 6 of 61
128	128
129	129
130	130	VT LEG #381212 v.3
131	131	If taxable income is: The tax is: 1
132	132	Not over $64,600.00 3.35% of taxable income 2
133	133	Over $64,600.00 but $2,164.00 plus 6.60% of 3
134	134	not over $156,150.00 the amount of taxable 4
135	135	income over $64,600.00 5
136	136	Over $156,150.00 but $8,206.00 plus 7.60% 6
137	137	not over $237,950.00 of the amount of taxable 7
138	138	income over $156,150.00 8
139	139	Over $237,950.00 but $14,423.00 plus 8.75% 9
140	140	not over $310,000.00 of the amount of taxable 10
141	141	income over $237,950.00 11
142	142	Over $310,000.00 $20,727.00 plus 10.00% 12
143	143	of the amount of taxable 13
144	144	income over $310,000.00 14
145	145	(2) Heads of household: 15
146	146	If taxable income is: The tax is: 16
147	147	Not over $51,850.00 3.35% of taxable income 17
148	148	Over $51,850.00 but $1,737.00 plus 6.60% of 18
149	149	not over $133,850.00 the amount of taxable 19
150	150	income over $51,850.00 20
151	151	Over $133,850.00 but $7,149.00 plus 7.60% 21 BILL AS INTRODUCED S.104
152	152	2025 Page 7 of 61
153	153
154	154
155	155	VT LEG #381212 v.3
156	156	not over $216,700.00 of the amount of taxable 1
157	157	income over $133,850.00 2
158	158	Over $216,700.00 but $13,446.00 plus 8.75% 3
159	159	not over $300,000.00 of the amount of taxable 4
160	160	income over $216,700.00 5
161	161	Over $300,000.00 $20,735.00 plus 10.00% 6
162	162	of the amount of taxable 7
163	163	income over $300,000.00 8
164	164	(3) Unmarried individuals (other than surviving spouses or heads of 9
165	165	household): 10
166	166	If taxable income is: The tax is: 11
167	167	Not over $38,700.00 3.35% of taxable income 12
168	168	Over $38,700.00 but $1,296.00 plus 6.60% of 13
169	169	not over $93,700.00 the amount of taxable 14
170	170	income over $38,700.00 15
171	171	Over $93,700.00 but $4,926.00 plus 7.60% 16
172	172	not over $195,450.00 of the amount of taxable 17
173	173	income over $93,700.00 18
174	174	Over $195,450.00 but $12,659.00 plus 8.75% 19
175	175	not over $275,000.00 of the amount of taxable 20
176	176	income over $195,450.00 21 BILL AS INTRODUCED S.104
177	177	2025 Page 8 of 61
178	178
179	179
180	180	VT LEG #381212 v.3
181	181	Over $275,000.00 $19,620.00 plus 10.00% 1
182	182	of the amount of taxable 2
183	183	income over $275,000.00 3
184	184	(4) Married individuals filing separate returns: 4
185	185	If taxable income is: The tax is: 5
186	186	Not over $32,300.00 3.35% of taxable income 6
187	187	Over $32,300.00 but $1,082.00 plus 6.60% of 7
188	188	not over $78,075.00 the amount of taxable 8
189	189	income over $32,300.00 9
190	190	Over $78,075.00 but $4,103.00 plus 7.60% 10
191	191	not over $118,975.00 of the amount of taxable 11
192	192	income over $78,075.00 12
193	193	Over $118,975.00 but $7,212.00 plus 8.75% 13
194	194	not over $163,000.00 of the amount of taxable 14
195	195	income over $118,975.00 15
196	196	Over $163,000.00 $11,064.00 plus 10.00% 16
197	197	of the amount of taxable 17
198	198	income over $163,000.00 18
199	199	(5) Estate and trusts: 19
200	200	If taxable income is: The tax is: 20
201	201	$2,600.00 or less 3.35% of taxable income 21 BILL AS INTRODUCED S.104
202	202	2025 Page 9 of 61
203	203
204	204
205	205	VT LEG #381212 v.3
206	206	Over $2,600.00 but $87.00 plus 6.60% of 1
207	207	not over $6,100.00 the amount of taxable 2
208	208	income over $2,600.00 3
209	209	Over $6,100.00 but $318.00 plus 7.60% 4
210	210	not over $9,350.00 of the amount of taxable 5
211	211	income over $6,100.00 6
212	212	Over $9,350.00 but $565.00 plus 8.75% 7
213	213	not over $12,500.00 of the amount of taxable 8
214	214	income over $9,350.00 9
215	215	Over $12,500.00 $840.00 plus 10.00% 10
216	216	of the amount of taxable 11
217	217	income over $12,500.00 12
218	218	* * * 13
219	219	* * * Repeal of New Income Tax Bracket * * * 14
220	220	Sec. 4. 32 V.S.A. § 5822 is amended to read: 15
221	221	§ 5822. TAX ON INCOME OF INDIVIDUALS, ESTATES, AND TRUSTS 16
222	222	(a) A tax is imposed for each taxable year upon the taxable income earned 17
223	223	or received in that year by every individual, estate, and trust, subject to income 18
224	224	taxation under the laws of the United States, in an amount determined by the 19
225	225	following tables, and adjusted as required under this section: 20
226	226	(1) Married individuals filing joint returns and surviving spouses: 21 BILL AS INTRODUCED S.104
227	227	2025 Page 10 of 61
228	228
229	229
230	230	VT LEG #381212 v.3
231	231	If taxable income is: The tax is: 1
232	232	Not over $64,600.00 3.35% of taxable income 2
233	233	Over $64,600.00 but $2,164.00 plus 6.60% of 3
234	234	not over $156,150.00 the amount of taxable 4
235	235	income over $64,600.00 5
236	236	Over $156,150.00 but $8,206.00 plus 7.60% 6
237	237	not over $237,950.00 of the amount of taxable 7
238	238	income over $156,150.00 8
239	239	Over $237,950.00 but $14,423.00 plus 8.75% 9
240	240	not over $310,000.00 of the amount of taxable 10
241	241	income over $237,950.00 11
242	242	Over $310,000.00 $20,727.00 plus 10.00% 12
243	243	of the amount of taxable 13
244	244	income over $310,000.00 14
245	245	(2) Heads of household: 15
246	246	If taxable income is: The tax is: 16
247	247	Not over $51,850.00 3.35% of taxable income 17
248	248	Over $51,850.00 but $1,737.00 plus 6.60% of 18
249	249	not over $133,850.00 the amount of taxable 19
250	250	income over $51,850.00 20
251	251	Over $133,850.00 but $7,149.00 plus 7.60% 21 BILL AS INTRODUCED S.104
252	252	2025 Page 11 of 61
253	253
254	254
255	255	VT LEG #381212 v.3
256	256	not over $216,700.00 of the amount of taxable 1
257	257	income over $133,850.00 2
258	258	Over $216,700.00 but $13,446.00 plus 8.75% 3
259	259	not over $300,000.00 of the amount of taxable 4
260	260	income over $216,700.00 5
261	261	Over $300,000.00 $20,735.00 plus 10.00% 6
262	262	of the amount of taxable 7
263	263	income over $300,000.00 8
264	264	(3) Unmarried individuals (other than surviving spouses or heads of 9
265	265	household): 10
266	266	If taxable income is: The tax is: 11
267	267	Not over $38,700.00 3.35% of taxable income 12
268	268	Over $38,700.00 but $1,296.00 plus 6.60% of 13
269	269	not over $93,700.00 the amount of taxable 14
270	270	income over $38,700.00 15
271	271	Over $93,700.00 but $4,926.00 plus 7.60% 16
272	272	not over $195,450.00 of the amount of taxable 17
273	273	income over $93,700.00 18
274	274	Over $195,450.00 but $12,659.00 plus 8.75% 19
275	275	not over $275,000.00 of the amount of taxable 20
276	276	income over $195,450.00 21 BILL AS INTRODUCED S.104
277	277	2025 Page 12 of 61
278	278
279	279
280	280	VT LEG #381212 v.3
281	281	Over $275,000.00 $19,620.00 plus 10.00% 1
282	282	of the amount of taxable 2
283	283	income over $275,000.00 3
284	284	(4) Married individuals filing separate returns: 4
285	285	If taxable income is: The tax is: 5
286	286	Not over $32,300.00 3.35% of taxable income 6
287	287	Over $32,300.00 but $1,082.00 plus 6.60% of 7
288	288	not over $78,075.00 the amount of taxable 8
289	289	income over $32,300.00 9
290	290	Over $78,075.00 but $4,103.00 plus 7.60% 10
291	291	not over $118,975.00 of the amount of taxable 11
292	292	income over $78,075.00 12
293	293	Over $118,975.00 but $7,212.00 plus 8.75% 13
294	294	not over $163,000.00 of the amount of taxable 14
295	295	income over $118,975.00 15
296	296	Over $163,000.00 $11,064.00 plus 10.00% 16
297	297	of the amount of taxable 17
298	298	income over $163,000.00 18
299	299	(5) Estate and trusts: 19
300	300	If taxable income is: The tax is: 20
301	301	$2,600.00 or less 3.35% of taxable income 21 BILL AS INTRODUCED S.104
302	302	2025 Page 13 of 61
303	303
304	304
305	305	VT LEG #381212 v.3
306	306	Over $2,600.00 but $87.00 plus 6.60% of 1
307	307	not over $6,100.00 the amount of taxable 2
308	308	income over $2,600.00 3
309	309	Over $6,100.00 but $318.00 plus 7.60% 4
310	310	not over $9,350.00 of the amount of taxable 5
311	311	income over $6,100.00 6
312	312	Over $9,350.00 but $565.00 plus 8.75% 7
313	313	not over $12,500.00 of the amount of taxable 8
314	314	income over $9,350.00 9
315	315	Over $12,500.00 $840.00 plus 10.00% 10
316	316	of the amount of taxable 11
317	317	income over $12,500.00 12
318	318	* * * 13
319	319	* * * Education Income Tax * * * 14
320	320	Sec. 5. 32 V.S.A. chapter 151, subchapter 14 is added to read: 15
321	321	Subchapter 14. Education Income Tax 16
322	322	§ 5961. NAME OF TAX 17
323	323	The tax imposed by this subchapter shall be known as the Vermont 18
324	324	education income tax. 19 BILL AS INTRODUCED S.104
325	325	2025 Page 14 of 61
326	326
327	327
328	328	VT LEG #381212 v.3
329	329	§ 5962. EDUCATION INCOME TAX ON INDIVIDUALS 1
330	330	(a) In addition to the personal income tax assessed under section 5822 of 2
331	331	this title, there shall be an education income tax imposed each taxable year 3
332	332	upon the adjusted gross income earned or received in that year by every 4
333	333	individual subject to income taxation under the laws of the United States who 5
334	334	is not listed as a renter for that year on a landlord certificate furnished pursuant 6
335	335	to section 6069 of this title, in an amount determined by the following tables 7
336	336	and adjusted as required under this section and section 5963 of this subchapter. 8
337	337	(1) Married individuals filing joint returns and surviving spouses: 9
338	338	If adjusted gross income is: The tax is: 10
339	339	Not over $64,600.00 2.00% of adjusted 11
340	340	gross income 12
341	341	Over $64,600.00 but $1,292.00 plus 4.00% of 13
342	342	not over $156,150.00 the amount of adjusted 14
343	343	gross income over $64,600.00 15
344	344	Over $156,150.00 but $4,954.00 plus 6.00% 16
345	345	not over $237,950.00 of the amount of adjusted 17
346	346	gross income over $156,150.00 18
347	347	Over $237,950.00 $9,862.00 plus 8.00% 19
348	348	of the amount of adjusted 20
349	349	gross income over $237,950.00 21 BILL AS INTRODUCED S.104
350	350	2025 Page 15 of 61
351	351
352	352
353	353	VT LEG #381212 v.3
354	354	(2) Heads of household: 1
355	355	If adjusted gross income is: The tax is: 2
356	356	Not over $51,850.00 2.00% of adjusted 3
357	357	gross income 4
358	358	Over $51,850.00 but $1,037.00 plus 4.00% of 5
359	359	not over $133,850.00 the amount of adjusted 6
360	360	gross income over $51,850.00 7
361	361	Over $133,850.00 but $4,317.00 plus 6.00% 8
362	362	not over $216,700.00 of the amount of adjusted 9
363	363	gross income over $133,850.00 10
364	364	Over $216,700.00 $9,288.00 plus 8.00% 11
365	365	of the amount of adjusted 12
366	366	gross income over $216,700.00 13
367	367	(3) Unmarried individuals, other than surviving spouses or heads of 14
368	368	household: 15
369	369	If adjusted gross income is: The tax is: 16
370	370	Not over $38,700.00 2.00% of adjusted 17
371	371	gross income 18
372	372	Over $38,700.00 but $774.00 plus 4.00% of 19
373	373	not over $93,700.00 the amount of adjusted 20
374	374	gross income over $38,700.00 21 BILL AS INTRODUCED S.104
375	375	2025 Page 16 of 61
376	376
377	377
378	378	VT LEG #381212 v.3
379	379	Over $93,700.00 but $2,974.00 plus 6.00% 1
380	380	not over $195,450.00 of the amount of adjusted 2
381	381	gross income over $93,700.00 3
382	382	Over $195,450.00 $9,079.00 plus 8.00% 4
383	383	of the amount of adjusted 5
384	384	gross income over $195,450.00 6
385	385	(4) Married individuals filing separate returns: 7
386	386	If adjusted gross income is: The tax is: 8
387	387	Not over $32,300.00 2.00% of adjusted 9
388	388	gross income 10
389	389	Over $32,300.00 but $646.00 plus 4.00% of 11
390	390	not over $78,075.00 the amount of adjusted 12
391	391	gross income over $32,300.00 13
392	392	Over $78,075.00 but $2,477.00 plus 6.00% 14
393	393	not over $118,975.00 of the amount of adjusted 15
394	394	gross income over $78,075.00 16
395	395	Over $118,975.00 $4,931.00 plus 8.00% 17
396	396	of the amount of adjusted 18
397	397	gross income over $118,975.00 19 BILL AS INTRODUCED S.104
398	398	2025 Page 17 of 61
399	399
400	400
401	401	VT LEG #381212 v.3
402	402	(b) The amounts of adjusted gross income shown in the tables in this 1
403	403	section shall be adjusted annually for inflation by the Commissioner of Taxes 2
404	404	pursuant to subdivision 5822(b)(2) of this chapter. 3
405	405	(c)(1) The rates shown in the tables in this section shall be adjusted for 4
406	406	each school district by dividing the school district’s per pupil education 5
407	407	spending, as defined in 16 V.S.A. § 4001(6), by the prior year’s statewide 6
408	408	average per pupil education spending and multiplying the result by the rates 7
409	409	under this section. 8
410	410	(2) The final rate for each school district determined under this 9
411	411	subsection shall apply to the Vermont income, as defined in section 5963 of 10
412	412	this title, of a resident or part-year resident for the entire taxable year. As used 11
413	413	in this subdivision, the “final rate” for each school district means the average 12
414	414	of the district’s rates in effect between January 1 and December 31. 13
415	415	(3) A resident or part-year resident individual shall pay the rate adjusted 14
416	416	under this subsection for the individual’s school district of residence on 15
417	417	January 1 of the taxable year or, in the case of a part-year resident individual 16
418	418	whose residence begins on a day other than January 1, the school district where 17
419	419	the individual resides on the first day of residence in this State. The rate 18
420	420	adjustments under this subsection shall not apply to a nonresident individual. 19
421	421	(d) The tax liability determined under subsections (a) through (c) of this 20
422	422	section shall be reduced by a percentage equal to the portion of adjusted gross 21 BILL AS INTRODUCED S.104
423	423	2025 Page 18 of 61
424	424
425	425
426	426	VT LEG #381212 v.3
427	427	income that is not Vermont income; provided, however, that if a taxpayer’s 1
428	428	Vermont income exceeds the taxpayer’s adjusted gross income, no reduction 2
429	429	shall be made and provided further that if a taxpayer has zero or negative 3
430	430	Vermont income and the taxpayer’s Vermont income computed without regard 4
431	431	to the reductions in section 5963 of this subchapter does not equal or exceed 5
432	432	the taxpayer’s adjusted gross income, no tax shall be due under this section. 6
433	433	(e) The education income tax under this subchapter shall be assessed and 7
434	434	administered in the same manner as the personal income tax under this chapter. 8
435	435	(f) As used in this section, “married individuals,” “surviving spouse,” 9
436	436	“head of household,” and “unmarried individual” have the same meaning as 10
437	437	under the Internal Revenue Code. 11
438	438	§ 5963. VERMONT INCOME OF INDIVIDUALS 12
439	439	(a) As used in this subchapter, for any taxable year, the Vermont income of 13
440	440	a resident individual is the adjusted gross income of the individual for that 14
441	441	taxable year, less income exempted from State taxation under the laws of the 15
442	442	United States. 16
443	443	(b)(1) As used in this subchapter, for any taxable year, the Vermont income 17
444	444	of a nonresident individual is the sum of the following items of income to the 18
445	445	extent they are required to be included in the adjusted gross income of the 19
446	446	individual: 20 BILL AS INTRODUCED S.104
447	447	2025 Page 19 of 61
448	448
449	449
450	450	VT LEG #381212 v.3
451	451	(A) rents and royalties derived from the ownership of property 1
452	452	located within this State; 2
453	453	(B) gains from the sale or exchange of property located within this 3
454	454	State; 4
455	455	(C) wages, salaries, commissions, or other income received with 5
456	456	respect to services performed within this State; 6
457	457	(D) income, other than income exempted from State taxation under 7
458	458	the laws of the United States, derived from every business, trade, occupation, 8
459	459	or profession to the extent that the business, trade, occupation, or profession is 9
460	460	carried on within this State, including any compensation received: 10
461	461	(i) under an agreement not to compete with a business operating in 11
462	462	Vermont; 12
463	463	(ii) for goodwill associated with the sale of a Vermont business; or 13
464	464	(iii) for services to be performed under a contract associated with 14
465	465	the sale of a Vermont business, unless it is shown that the compensation for 15
466	466	services does not constitute income from the sale of the business; 16
467	467	(E) income that was previously deferred under a nonqualified 17
468	468	deferred compensation plan and that would have previously been included in 18
469	469	the taxpayer’s Vermont income if it had not been deferred and income derived 19
470	470	from such previously deferred income; and 20 BILL AS INTRODUCED S.104
471	471	2025 Page 20 of 61
472	472
473	473
474	474	VT LEG #381212 v.3
475	475	(F) proceeds from wagering transactions made within the State; or 1
476	476	any Vermont State Lottery, tri-state lottery, or multijurisdictional lottery ticket 2
477	477	paid to a person who purchased the ticket in Vermont, including payments 3
478	478	received from a third party for the transfer of the rights to future proceeds 4
479	479	related to the ticket; and the Commissioner may require withholding of any 5
480	480	taxes due to the State under this subdivision (b)(1) from payments of wagering 6
481	481	or lottery proceeds. 7
482	482	(2) As used in this subchapter, for any taxable year, the Vermont income 8
483	483	of a nonresident individual shall not include any income from the activities 9
484	484	listed in this subdivision or the income of a nonresident through an entity, such 10
485	485	as a partnership, limited liability company, or trust, provided that the entity’s 11
486	486	activities in this State are limited to activities that, without more, would not 12
487	487	constitute nexus, plus any or all of the following activities necessary to create 13
488	488	or maintain a web page or internet site for the nonresident or entity: 14
489	489	(A) ownership of data or programming code in this State, or use of 15
490	490	that data or programming code by a person other than the nonresident or entity 16
491	491	or by a person not in this State; 17
492	492	(B) ownership of, or receipt of services from, computer servers in 18
493	493	this State; and 19
494	494	(C) receipt of computer processing or web hosting services from a 20
495	495	computer service provider or web hosting service in this State. 21 BILL AS INTRODUCED S.104
496	496	2025 Page 21 of 61
497	497
498	498
499	499	VT LEG #381212 v.3
500	500	(c) As used in this subchapter, for any taxable year, the Vermont income of 1
501	501	a part-year resident individual or trust is the sum of: 2
502	502	(1) all items of income constituting Vermont income for the purpose of 3
503	503	subsection (a) of this section that are earned or received during the period of 4
504	504	the taxpayer’s residency in this State in the taxable year; and 5
505	505	(2) all items of income constituting Vermont income for the purposes of 6
506	506	subdivision (b)(1) of this section that are earned or received during the period 7
507	507	of the taxpayer’s nonresidency in this State in the taxable year. 8
508	508	* * * Withholding, Estimated Payments, and Returns * * * 9
509	509	Sec. 6. 32 V.S.A. § 5841 is amended to read: 10
510	510	§ 5841. REQUIREMENT AND RATE OF WITHHOLDING 11
511	511	(a) Every person who is required under the laws of the United States to 12
512	512	withhold federal income tax from payments that are also subject to Vermont 13
513	513	income tax or education income tax shall deduct and withhold during the 14
514	514	calendar year from the payments made by such person such the amount of tax 15
515	515	as the Commissioner shall prescribe. Every person who makes payments of 16
516	516	income with respect to services performed for such person that were previously 17
517	517	deferred under a nonqualified deferred compensation plan shall deduct and 18
518	518	withhold during the calendar year from the payments made by such person six 19
519	519	percent of any payment (including any withheld tax) of such previously 20
520	520	deferred income and of income derived from such previously deferred income. 21 BILL AS INTRODUCED S.104
521	521	2025 Page 22 of 61
522	522
523	523
524	524	VT LEG #381212 v.3
525	525	The Commissioner may authorize any person to deduct and withhold Vermont 1
526	526	income tax and education income tax from any other payments that are subject 2
527	527	to the tax taxes imposed by this chapter. Notwithstanding the foregoing, banks 3
528	528	(as defined in 8 V.S.A. § 909a(a)) shall not be required to withhold Vermont 4
529	529	income tax or education income tax from payments that are subject to federal 5
530	530	back-up withholding. 6
531	531	(b) The Commissioner shall establish such withholding tables, schedules, 7
532	532	or formulae as will result in the withholding of such amounts from the 8
533	533	payments made by any person during any taxable year, as shall closely 9
534	534	approximate the income tax liabilities of the recipients of those payments with 10
535	535	respect to those payments for that year under this chapter, including any 11
536	536	liability for the education income tax under section 5962 of this title. 12
537	537	* * * 13
538	538	(d) The Commissioner shall base the withholding requirements for the 14
539	539	education income tax under section 5962 of this title on the federal adjusted 15
540	540	gross income of recipients from the prior year and the statewide average rates 16
541	541	from the prior year, provided the rate shall be adjusted annually for inflation 17
542	542	using the National Income and Product Accounts (NIPA) Implicit Price 18
543	543	Deflator for State and Local Government Consumption Expenditures and 19
544	544	Gross Investment as reported by the U.S. Department of Commerce, Bureau of 20
545	545	Economic Analysis. 21 BILL AS INTRODUCED S.104
546	546	2025 Page 23 of 61
547	547
548	548
549	549	VT LEG #381212 v.3
550	550	Sec. 7. 32 V.S.A. § 5851(1) is amended to read: 1
551	551	(1) “Tax” means, for any taxpayer and for any taxable year, the income 2
552	552	tax liability of the taxpayer for that taxable year under section 5822 or 5962 of 3
553	553	this title, reduced by any allowable credits against such tax. 4
554	554	Sec. 8. 32 V.S.A. § 5852(a) is amended to read: 5
555	555	(a) Every individual, estate, and trust subject to taxation under section 5822 6
556	556	of this title (other than a person receiving at least two-thirds of his or her the 7
557	557	person’s income from farming or fishing as defined under the laws of the 8
558	558	United States) or section 5962 of this title shall make installment payments of 9
559	559	the taxpayer’s estimated tax liability for each taxable year. The amount of 10
560	560	each payment shall be 25 percent of the required annual payment. For any 11
561	561	taxable year, payments shall be made on or before April 15, June 15, and 12
562	562	September 15 of the taxable year and January 15 of the following taxable year. 13
563	563	In applying this section to a taxable year beginning on any date other than 14
564	564	January 1, there shall be substituted, for the months specified in this section, 15
565	565	the months that correspond thereto. 16
566	566	Sec. 9. 32 V.S.A. § 5861 is amended to read: 17
567	567	§ 5861. RETURNS BY INDIVIDUALS, TRUSTS, AND ESTATES 18
568	568	(a) Every individual, trust, or estate subject to taxation for any taxable year 19
569	569	under section 5822 or 5962 of this title shall file a Vermont personal income 20 BILL AS INTRODUCED S.104
570	570	2025 Page 24 of 61
571	571
572	572
573	573	VT LEG #381212 v.3
574	574	tax return for that taxable year if that person is required to file a United States 1
575	575	income tax return for that year and: 2
576	576	(1) earned or received more than $100.00 of Vermont income, or; 3
577	577	(2) earned or received more than $1,000.00 in gross income from the 4
578	578	sources listed in subdivisions 5823(b)(1) through (6) or subsections 5962(b) 5
579	579	and (c) of this title, whether or not a resident, in that year,; or 6
580	580	(3) has a tax liability under this chapter for that year. 7
581	581	* * * 8
582	582	(e) The Commissioner may shall require information on a Vermont 9
583	583	personal income tax return that is sufficient to identify the school district, as 10
584	584	defined in 16 V.S.A. § 11(a)(10), in which the taxpayer resides and whether 11
585	585	the taxpayer’s residence is a rental dwelling in this State. The Commissioner 12
586	586	may consider a return incomplete if the information required under this 13
587	587	subsection is not provided and shall cause the return to be completed. 14
588	588	* * * 15
589	589	Sec. 10. 32 V.S.A. § 5820 is amended to read: 16
590	590	§ 5820. PURPOSE 17
591	591	(a) This chapter is intended to conform the Vermont personal and, 18
592	592	corporate, and education income taxes with the U.S. Internal Revenue Code, 19
593	593	except as otherwise expressly provided, in order to simplify the taxpayer’s 20 BILL AS INTRODUCED S.104
594	594	2025 Page 25 of 61
595	595
596	596
597	597	VT LEG #381212 v.3
598	598	filing of returns, reduce the taxpayer’s accounting burdens, and facilitate the 1
599	599	collection and administration of these taxes. 2
600	600	(b) It is intended that, for any taxable year, individuals, estates, and trusts 3
601	601	shall be taxed upon only their Vermont income for that year, but that the rate at 4
602	602	which the Vermont income of any taxpayer is taxed under this chapter shall 5
603	603	reflect the taxpayer’s ability to pay as measured by his or her the taxpayer’s 6
604	604	adjusted gross income for the taxable year. 7
605	605	* * * Nonhomestead Education Property Tax * * * 8
606	606	Sec. 11. 32 V.S.A. § 5401 is amended to read: 9
607	607	§ 5401. DEFINITIONS 10
608	608	As used in this chapter: 11
609	609	* * * 12
610	610	(7) “Homestead”: 13
611	611	(A) “Homestead” means the principal dwelling and parcel two acres 14
612	612	of land surrounding the dwelling, owned and occupied by a resident individual 15
613	613	as the individual’s domicile or owned and fully leased on April 1, provided the 16
614	614	property is not leased for more than 182 days out of the calendar year or, for 17
615	615	purposes of the renter credit under subsection 6066(b) of this title, is rented 18
616	616	and occupied by a resident individual as the individual’s domicile. 19
617	617	* * * 20 BILL AS INTRODUCED S.104
618	618	2025 Page 26 of 61
619	619
620	620
621	621	VT LEG #381212 v.3
622	622	(G) For purposes of homestead declaration and application of the 1
623	623	homestead property tax rate, “homestead” “Homestead” also means a 2
624	624	residence that was the homestead of the decedent at the date of death and, from 3
625	625	the date of death through the next April 1, is held by the estate of the decedent 4
626	626	and not rented. 5
627	627	* * * 6
628	628	(10) “Nonhomestead property” means all property except: 7
629	629	* * * 8
630	630	(C) Homesteads declared in accordance with section 5410 of this title 9
631	631	as defined in subdivision (7) of this section. 10
632	632	* * * 11
633	633	(13)(A) “Education property tax spending adjustment” means the 12
634	634	greater of one or a fraction in which: 13
635	635	(i) the numerator is the district’s per pupil education spending plus 14
636	636	excess spending for the school year, and 15
637	637	(ii) the denominator is the property dollar equivalent yield for the 16
638	638	school year, as defined in subdivision (15) of this section, multiplied by the 17
639	639	statewide adjustment. 18
640	640	(B) “Education income tax spending adjustment” means the greater 19
641	641	of one or a fraction in which the numerator is the district’s per pupil education 20
642	642	spending plus excess spending for the school year, and the denominator is the 21 BILL AS INTRODUCED S.104
643	643	2025 Page 27 of 61
644	644
645	645
646	646	VT LEG #381212 v.3
647	647	income dollar equivalent yield for the school year, as defined in subdivision 1
648	648	(16) of this section. [Repealed.] 2
649	649	* * * 3
650	650	(15) “Property dollar equivalent yield” means the amount of per pupil 4
651	651	education spending that would result in a district having a homestead tax rate 5
652	652	of $1.00 per $100.00 of equalized education property value. [Repealed.] 6
653	653	(16) “Income dollar equivalent yield” means the amount of per pupil 7
654	654	education spending that would result in a district having an income percentage 8
655	655	in subdivision 6066(a)(2) of this title of 2.0 percent. [Repealed.] 9
656	656	* * * 10
657	657	Sec. 12. 32 V.S.A. § 5402 is amended to read: 11
658	658	§ 5402. NONHOMESTEAD EDUCATION PROPERTY TAX LIABILITY 12
659	659	(a) A statewide education tax is imposed on all nonhomestead and 13
660	660	homestead property at the following rates: 14
661	661	(1) The tax rate for nonhomestead property shall be rate of $1.59 per 15
662	662	$100.00 divided by the statewide adjustment. 16
663	663	(2) The tax rate for homestead property shall be $1.00 multiplied by the 17
664	664	education property tax spending adjustment for the municipality per $100.00 of 18
665	665	equalized education property value as most recently determined under section 19
666	666	5405 of this title. The homestead property tax rate for each municipality that is 20 BILL AS INTRODUCED S.104
667	667	2025 Page 28 of 61
668	668
669	669
670	670	VT LEG #381212 v.3
671	671	a member of a union or unified union school district shall be calculated as 1
672	672	required under subsection (e) of this section. 2
673	673	(b) The statewide nonhomestead education tax shall be calculated as 3
674	674	follows: 4
675	675	(1) The Commissioner of Taxes shall determine for each municipality 5
676	676	the nonhomestead education tax rates rate under subsection (a) of this section 6
677	677	divided by the number resulting from dividing the municipality’s most recent 7
678	678	common level of appraisal by the statewide adjustment. The legislative body 8
679	679	in each municipality shall then bill each property taxpayer at the homestead or 9
680	680	nonhomestead rate determined by the Commissioner under this subdivision, 10
681	681	multiplied by the nonhomestead education property tax grand list value of the 11
682	682	property, properly classified as homestead or nonhomestead property and 12
683	683	without regard to any other tax classification of the property. Statewide 13
684	684	nonhomestead education property tax bills shall show the tax due and the 14
685	685	calculation of the rate determined under subsection (a) of this section, divided 15
686	686	by the number resulting from dividing the municipality’s most recent common 16
687	687	level of appraisal by the statewide adjustment, multiplied by the current grand 17
688	688	list value of the property to be taxed. Statewide nonhomestead education 18
689	689	property tax bills shall also include language provided by the Commissioner 19
690	690	pursuant to subsection 5405(g) of this title. 20 BILL AS INTRODUCED S.104
691	691	2025 Page 29 of 61
692	692
693	693
694	694	VT LEG #381212 v.3
695	695	(2) Taxes assessed under this section shall be assessed and collected in 1
696	696	the same manner as taxes assessed under chapter 133 of this title with no tax 2
697	697	classification other than as homestead or nonhomestead property; provided, 3
698	698	however, that the tax levied under this chapter shall be billed to each taxpayer 4
699	699	by the municipality in a manner that clearly indicates the tax is separate from 5
700	700	any other tax assessed and collected under chapter 133, including an 6
701	701	itemization of the separate taxes due. The bill may be on a single sheet of 7
702	702	paper with the statewide education tax and other taxes presented separately and 8
703	703	side by side. 9
704	704	(3) If a district has not voted a budget by June 30, an interim homestead 10
705	705	education tax shall be imposed at the base rate determined under subdivision 11
706	706	(a)(2) of this section, divided by the number resulting from dividing the 12
707	707	municipality’s most recent common level of appraisal by the statewide 13
708	708	adjustment, but without regard to any spending adjustment under subdivision 14
709	709	5401(13) of this title. Within 30 days after a budget is adopted and the deadline 15
710	710	for reconsideration has passed, the Commissioner shall determine the 16
711	711	municipality’s homestead tax rate as required under subdivision (1) of this 17
712	712	subsection. [Repealed.] 18
713	713	(c)(1) The treasurer of each municipality shall by December 1 of the year in 19
714	714	which the tax is levied and on June 1 of the following year pay to the State 20
715	715	Treasurer for deposit in the Education Fund one-half of the municipality’s 21 BILL AS INTRODUCED S.104
716	716	2025 Page 30 of 61
717	717
718	718
719	719	VT LEG #381212 v.3
720	720	statewide nonhomestead tax and one-half of the municipality’s homestead 1
721	721	education tax, as determined under subdivision (b)(1) of this section. 2
722	722	(2) The Secretary of Education shall determine each municipality’s net 3
723	723	nonhomestead education tax payment and its net homestead education tax 4
724	724	payment to the State based on grand list information received by the Secretary 5
725	725	not later than the March 15 prior to the June 1 net payment. Payment shall be 6
726	726	accompanied by a return prescribed by the Secretary of Education. Each 7
727	727	municipality may retain 0.225 of one percent of the total education tax 8
728	728	collected, only upon timely remittance of net payment to the State Treasurer or 9
729	729	to the applicable school district or districts. Each municipality may also retain 10
730	730	$15.00 for each late property tax credit claim filed after April 15 and before 11
731	731	September 2, as notified by the Department of Taxes, for the cost of issuing a 12
732	732	new property tax bill. 13
733	733	(d) [Repealed.] 14
734	734	(e) The Commissioner of Taxes shall determine a homestead education tax 15
735	735	rate for each municipality that is a member of a union or unified union school 16
736	736	district as follows: 17
737	737	(1) For a municipality that is a member of a unified union school 18
738	738	district, use the base rate determined under subdivision (a)(2) of this section 19
739	739	and a spending adjustment under subdivision 5401(13) of this title based upon 20
740	740	the per pupil education spending of the unified union. 21 BILL AS INTRODUCED S.104
741	741	2025 Page 31 of 61
742	742
743	743
744	744	VT LEG #381212 v.3
745	745	(2) For a municipality that is a member of a union school district: 1
746	746	(A) Determine the municipal district homestead tax rate using the 2
747	747	base rate determined under subdivision (a)(2) of this section and a spending 3
748	748	adjustment under subdivision 5401(13) of this title based on the per pupil 4
749	749	education spending in the municipality who attends a school other than the 5
750	750	union school. 6
751	751	(B) Determine the union district homestead tax rate using the base 7
752	752	rate determined under subdivision (a)(2) of this section and a spending 8
753	753	adjustment under subdivision 5401(13) of this title based on the per pupil 9
754	754	education spending of the union school district. 10
755	755	(C) Determine a combined homestead tax rate by calculating the 11
756	756	weighted average of the rates determined under subdivisions (A) and (B) of 12
757	757	this subdivision (2), with weighting based upon the ratio of union school long-13
758	758	term membership, as defined in 16 V.S.A. § 4001(7), from the member 14
759	759	municipality to total long-term membership of the member municipality; and 15
760	760	the ratio of long-term membership attending a school other than the union 16
761	761	school to total long-term membership of the member municipality. Total long-17
762	762	term membership of the member municipality is based on the number of pupils 18
763	763	who are legal residents of the municipality and attending school at public 19
764	764	expense. If necessary, the Commissioner may adopt a rule to clarify and 20
765	765	facilitate implementation of this subsection (e). [Repealed.] 21 BILL AS INTRODUCED S.104
766	766	2025 Page 32 of 61
767	767
768	768
769	769	VT LEG #381212 v.3
770	770	Sec. 13. 32 V.S.A. § 5402b is amended to read: 1
771	771	§ 5402b. STATEWIDE EDUCATION TAX YIELDS RATES; 2
772	772	RECOMMENDATION OF THE COMMISSIONER 3
773	773	(a) Annually, not later than December 1, the Commissioner of Taxes, after 4
774	774	consultation with the Secretary of Education, the Secretary of Administration, 5
775	775	and the Joint Fiscal Office, shall calculate and recommend a property dollar 6
776	776	equivalent yield, an income dollar equivalent yield, the education income tax 7
777	777	rates and a nonhomestead property tax rate for the following fiscal year. In 8
778	778	making these calculations, the Commissioner shall assume: 9
779	779	(1) the homestead base tax rate in subdivision 5402(a)(2) of this title is 10
780	780	$1.00 per $100.00 of equalized education property value; 11
781	781	(2) the applicable percentage in subdivision 6066(a)(2) of this title is 12
782	782	2.0; 13
783	783	(3) the statutory reserves under 16 V.S.A. § 4026 and this section were 14
784	784	maintained at five percent; and 15
785	785	(4)(2) the percentage change in the average education tax bill applied to 16
786	786	nonhomestead property and the percentage change in the average education 17
787	787	income tax bill of homestead property and the percentage change in the 18
788	788	average education tax bill for taxpayers who claim a credit under subsection 19
789	789	6066(a) of this title are equal; 20 BILL AS INTRODUCED S.104
790	790	2025 Page 33 of 61
791	791
792	792
793	793	VT LEG #381212 v.3
794	794	(5) the equalized education grand list is multiplied by the statewide 1
795	795	adjustment in calculating the property dollar equivalent yield; and 2
796	796	(6) the nonhomestead rate is divided by the statewide adjustment. 3
797	797	(b) For each fiscal year, the property dollar equivalent yield and the income 4
798	798	dollar equivalent yield shall be the same as in the prior fiscal year, unless set 5
799	799	otherwise by the General Assembly. [Repealed.] 6
800	800	* * * 7
801	801	Sec. 14. 32 V.S.A. § 5404 is amended to read: 8
802	802	§ 5404. DETERMINATION OF EDUCATION PROPERTY TAX GRAND 9
803	803	LIST 10
804	804	(a)(1) Municipalities shall determine the education property tax grand list 11
805	805	by calculating one percent of the listed value of nonhomestead and homestead 12
806	806	real property as provided in this section. The listed value of all nonhomestead 13
807	807	and homestead real property in a municipality shall be its fair market value, its 14
808	808	value established under a stabilization agreement described in section 5404a of 15
809	809	this title, or the use value of property enrolled in a Use Value Program under 16
810	810	chapter 124 of this title. 17
811	811	(2) If a homestead is located on a parcel of greater than two acres, the 18
812	812	entire parcel shall be appraised at fair market value;, the housesite homestead 19
813	813	shall then be appraised as if it were situated on a separate parcel, and the value 20
814	814	of the housesite homestead shall be subtracted from the value of the total 21 BILL AS INTRODUCED S.104
815	815	2025 Page 34 of 61
816	816
817	817
818	818	VT LEG #381212 v.3
819	819	parcel to determine the value of the remainder of the parcel, which shall be 1
820	820	subject to the nonhomestead tax imposed under this chapter. Pursuant to 2
821	821	subdivision 4152(a)(9) of this title, a homestead shall be appraised and listed at 3
822	822	what the full fair market value of the property would be absent the exemption 4
823	823	from nonhomestead tax. 5
824	824	* * * 6
825	825	Sec. 15. 32 V.S.A. § 5405 is amended to read: 7
826	826	§ 5405. DETERMINATION OF EQUALIZED EDUCATION PROPERTY 8
827	827	TAX GRAND LIST AND COEFFICIENT OF DISPERSION 9
828	828	* * * 10
829	829	(c) In determining the fair market value of property that is required to be 11
830	830	listed at fair market value, the Commissioner shall take into consideration 12
831	831	those factors required by section 3481 of this title. The Commissioner shall 13
832	832	value property as of April 1 preceding the determination and shall take account 14
833	833	of all homestead declaration information available before October 1 each year. 15
834	834	* * * 16
835	835	(g) The Commissioner shall provide to municipalities for the front of 17
836	836	property tax bills the district homestead property tax rate before equalization, 18
837	837	the nonresidential nonhomestead tax rate before equalization, and the 19
838	838	calculation process that creates the equalized homestead and nonhomestead tax 20
839	839	rates rate. The Commissioner shall further provide to municipalities for the 21 BILL AS INTRODUCED S.104
840	840	2025 Page 35 of 61
841	841
842	842
843	843	VT LEG #381212 v.3
844	844	back of property tax bills an explanation of the common level of appraisal, 1
845	845	including its origin and purpose. 2
846	846	Sec. 16. 32 V.S.A. § 5406(c) is amended to read: 3
847	847	(c) If the Director of Property Valuation and Review certifies that a 4
848	848	municipality has completed a townwide reappraisal, the common level of 5
849	849	appraisal for that municipality shall be equal to its new grand list value divided 6
850	850	by its most recent equalized grand list value, for purposes of determining the 7
851	851	nonhomestead education property tax rates rate. 8
852	852	Sec. 17. 32 V.S.A. § 5409 is amended to read: 9
853	853	§ 5409. DUTIES OF MUNICIPALITIES AND ADMINISTRATION 10
854	854	The following shall apply with regard to the statewide nonhomestead 11
855	855	education property tax imposed under this chapter: 12
856	856	* * * 13
857	857	(2) If by August 1 a municipality has failed to issue notices of 14
858	858	assessment of the statewide nonhomestead education property tax, or if the 15
859	859	municipality fails for more than 90 days after the due date for any installment 16
860	860	payment to enforce the tax in the municipality, then the Commissioner of 17
861	861	Taxes shall either issue notices of assessment or collect the tax, or both, or 18
862	862	bring appropriate court action to require the municipal officials to issue notices 19
863	863	and collect the tax, as the Commissioner deems necessary. 20 BILL AS INTRODUCED S.104
864	864	2025 Page 36 of 61
865	865
866	866
867	867	VT LEG #381212 v.3
868	868	(3) In any case of administration under subdivision (2) of this section by 1
869	869	the Commissioner of Taxes of education property tax: 2
870	870	* * * 3
871	871	(C) The Commissioner may abate in whole or in part the statewide 4
872	872	nonhomestead education taxes property tax of a taxpayer who has been granted 5
873	873	an abatement of municipal taxes under 24 V.S.A. § 1535. 6
874	874	(4) [Repealed.] 7
875	875	(5) In case of insufficient property tax payment by a taxpayer to a 8
876	876	municipality, payments shall be allocated first to municipal property tax and 9
877	877	next to statewide nonhomestead education property tax. In case of insufficient 10
878	878	payment by a taxpayer to the Department of Taxes, payments shall be allocated 11
879	879	first to liabilities other than the nonhomestead education taxes property tax and 12
880	880	next to the nonhomestead education property tax. 13
881	881	(6) In case of overpayment by a taxpayer who has an income tax 14
882	882	liability under chapter 151 of this title and a homestead property tax liability, a 15
883	883	refund of the overpayment, after accounting for any benefit amount allowed 16
884	884	under chapter 154 of this title, shall be deemed to be a refund of income tax for 17
885	885	purposes of debt setoff under chapter 151, subchapter 12 of this title. 18
886	886	[Repealed.] 19 BILL AS INTRODUCED S.104
887	887	2025 Page 37 of 61
888	888
889	889
890	890	VT LEG #381212 v.3
891	891	(7) Notwithstanding section 435 of this title, the Commissioner shall 1
892	892	deposit the revenue from taxes the nonhomestead education property tax 2
893	893	imposed under this chapter in the education fund Education Fund. 3
894	894	(8) A municipality’s liability to the State for education taxes the 4
895	895	nonhomestead property tax shall not be reduced by any early payment property 5
896	896	tax discount or similar discount offered by the municipality. 6
897	897	* * * Repeals * * * 7
898	898	Sec. 18. REPEALS; HOMESTEAD PROPERTY TAX AND CREDIT 8
899	899	The following are repealed: 9
900	900	(1) 32 V.S.A. § 3108(b)(4) (interest on overpayments to homestead tax 10
901	901	liabilities); 11
902	902	(2) 32 V.S.A. § 3800(g) (statutory purpose for veterans’ homestead 12
903	903	property exemptions); 13
904	904	(3) 32 V.S.A. § 3802(11) (veterans’ homestead property exemptions); 14
905	905	and 15
906	906	(4) 32 V.S.A. § 5410 (property tax credit; homestead declaration). 16
907	907	Sec. 19. 32 V.S.A. § 4111(e) is amended to read: 17
908	908	(e) When the listers return the grand list book to the town clerk, they shall 18
909	909	notify by first-class mail, on which postage has been prepaid and that has been 19
910	910	addressed to their last known address, all affected persons listed as property 20
911	911	owners in the grand list book of any change in the appraised value of such 21 BILL AS INTRODUCED S.104
912	912	2025 Page 38 of 61
913	913
914	914
915	915	VT LEG #381212 v.3
916	916	property or any change in the allocation of value to the homestead as defined 1
917	917	under subdivision 5401(7) of this title or the housesite as defined under 2
918	918	subdivision 6061(11) of this title, and also notify them of the amount of such 3
919	919	change and of the time and place fixed in the public notice hereinafter provided 4
920	920	for, when persons aggrieved may be heard. No notice shall be required for a 5
921	921	change solely to reflect a new use value set by the Current Use Advisory Board 6
922	922	or the adjustment of that value by the common level of appraisal. Notices shall 7
923	923	be mailed at least 14 days before the time fixed for hearing. Such personal 8
924	924	notices shall be given in all towns and cities within the State, anything in the 9
925	925	charter of any city to the contrary notwithstanding. At the same time, the 10
926	926	listers shall post notices in the town clerk’s office and in at least four other 11
927	927	public places in the town or, in the case of a city, in such other manner and 12
928	928	places as the city charter shall provide, setting forth that they have completed 13
929	929	and filed such book as an abstract and the time and place of the meeting for 14
930	930	hearing grievances and making corrections. Unless the personal notices 15
931	931	required hereby were sent by registered or certified mail, or unless an official 16
932	932	certificate of mailing of the same was obtained from the post office, in the case 17
933	933	of any controversy subsequently arising, it shall be presumed that the personal 18
934	934	notices were not mailed as required. 19 BILL AS INTRODUCED S.104
935	935	2025 Page 39 of 61
936	936
937	937
938	938	VT LEG #381212 v.3
939	939	Sec. 20. 32 V.S.A § 4152(a) is amended to read: 1
940	940	(a) When completed, the grand list of a town shall be in such form as the 2
941	941	Director prescribes and shall contain such information as the Director 3
942	942	prescribes, including: 4
943	943	* * * 5
944	944	(9) Separate columns A separate column that will show what the listed 6
945	945	valuations full fair market value of homesteads, as defined in subdivision 7
946	946	5401(7) of this title, and housesites as defined under subdivision 6061(11) of 8
947	947	this title would be absent the exemption from nonhomestead property tax. 9
948	948	Sec. 21. 32 V.S.A. § 4261 is amended to read: 10
949	949	§ 4261. CORRECTING OMISSION FROM GRAND LIST 11
950	950	When real or personal estate is omitted from the grand list by mistake or an 12
951	951	obvious error is found, the listers, with the approval of the selectboard, on or 13
952	952	before December 31, may supply such omissions or correct such errors and 14
953	953	make a certificate thereon of the fact; provided, however, the listers may make 15
954	954	a correction resulting from the filing or rescission of a homestead declaration 16
955	955	without approval of the selectboard. 17
956	956	Sec. 22. 32 V.S.A. § 5400(c) is amended to read: 18
957	957	(c) The statutory purpose of the exemption for qualified housing in 19
958	958	subdivision 5404a(a)(6) of this title is to ensure that taxes on this rent- 20
959	959	restricted housing provided to Vermonters of low and moderate income are 21 BILL AS INTRODUCED S.104
960	960	2025 Page 40 of 61
961	961
962	962
963	963	VT LEG #381212 v.3
964	964	more equivalent to property taxed using the State homestead rate and to adjust 1
965	965	the costs of investment in rent-restricted housing to reflect more accurately the 2
966	966	revenue potential of such property. 3
967	967	* * * Municipal Property Tax Credit * * * 4
968	968	Sec. 23. 32 V.S.A. chapter 154 is redesignated to read: 5
969	969	CHAPTER 154. HOMESTEAD MUNICIPAL PROPERTY TAX CREDIT 6
970	970	AND RENTER CREDIT 7
971	971	Sec. 24. 32 V.S.A. § 6061 is amended to read: 8
972	972	§ 6061. DEFINITIONS 9
973	973	As used in this chapter unless the context requires otherwise: 10
974	974	(1) “Property Municipal property tax credit” means a credit of the prior 11
975	975	tax year’s statewide or municipal property tax liability or a homestead owner 12
976	976	credit, as authorized under section 6066 of this title, as the context requires. 13
977	977	* * * 14
978	978	(6) “Property Municipal property tax” means the amount of ad valorem 15
979	979	taxes, exclusive of special assessments, interest, penalties, and charges for 16
980	980	service, assessed by a municipality on real property in this State used as the 17
981	981	claimant’s housesite, or that would have been assessed if the homestead had 18
982	982	been properly declared at the time of assessment. 19
983	983	* * * 20 BILL AS INTRODUCED S.104
984	984	2025 Page 41 of 61
985	985
986	986
987	987	VT LEG #381212 v.3
988	988	(11) “Housesite” means that portion of a homestead, as defined under 1
989	989	subdivision 5401(7) of this title but not under subdivision 5401(7)(G) of this 2
990	990	title, that includes as much of the land owned by the claimant surrounding the 3
991	991	dwelling as is reasonably necessary for use of the dwelling as a home, but in 4
992	992	no event more than two acres per dwelling unit, and, in the case of multiple 5
993	993	dwelling units, not more than two acres per dwelling unit up to a maximum of 6
994	994	10 acres per parcel. [Repealed.] 7
995	995	* * * 8
996	996	(13) “Homestead” means a homestead as defined under subdivision 9
997	997	5401(7) of this title, but not under subdivision 5401(7)(G) of this title, and 10
998	998	declared on or before October 15 in accordance with section 5410 6065 of this 11
999	999	title. 12
1000	1000	(14) “Statewide education tax rate” means the homestead education 13
1001	1001	property tax rate multiplied by the municipality’s education spending 14
1002	1002	adjustment under subdivision 5402(a)(2) of this title and used to calculate taxes 15
1003	1003	assessed in the municipal fiscal year that began in the taxable year. 16
1004	1004	[Repealed.] 17
1005	1005	(15) “Adjusted property tax” means the amount of education and 18
1006	1006	municipal property taxes on the homestead parcel after reduction for any 19
1007	1007	municipal property tax credit under section 6066a of this chapter. 20 BILL AS INTRODUCED S.104
1008	1008	2025 Page 42 of 61
1009	1009
1010	1010
1011	1011	VT LEG #381212 v.3
1012	1012	(16) “Unadjusted property tax” means the amount of education and 1
1013	1013	municipal property taxes on the homestead parcel before any reduction for a 2
1014	1014	municipal property tax credit under section 6066a of this chapter. 3
1015	1015	(17) “Equalized value of the housesite in the taxable year” means the 4
1016	1016	value of the housesite on the grand list for April 1 of the taxable year, divided 5
1017	1017	by the municipality’s common level of appraisal determined by equalization of 6
1018	1018	the grand list for April 1 of the year preceding the taxable year. [Repealed.] 7
1019	1019	* * * 8
1020	1020	Sec. 25. 32 V.S.A. § 6062 is amended to read: 9
1021	1021	§ 6062. NUMBER AND IDENTITY OF CLAIMANTS; APPORTIONMENT 10
1022	1022	* * * 11
1023	1023	(b) Only one municipal property tax credit claimant per household per year 12
1024	1024	shall be entitled to relief under this chapter. 13
1025	1025	(c) When a homestead is owned by two or more persons as joint tenants, 14
1026	1026	tenants by the entirety, or tenants in common and one or more of these persons 15
1027	1027	are not members of the claimant’s household, the municipal property tax is the 16
1028	1028	same proportion of the property tax levied on that homestead as the proportion 17
1029	1029	of ownership of the homestead by the claimant and members of the claimant’s 18
1030	1030	household; provided, however, that: 19
1031	1031	(1) the municipal property tax of a claimant who is 62 years of age or 20
1032	1032	older is the same proportion of the municipal property tax levied on that 21 BILL AS INTRODUCED S.104
1033	1033	2025 Page 43 of 61
1034	1034
1035	1035
1036	1036	VT LEG #381212 v.3
1037	1037	homestead as the proportion of ownership of the homestead by the claimant, 1
1038	1038	members of the claimant’s household, and the claimant’s descendants, and the 2
1039	1039	claimant’s siblings or spouse who have moved on an indefinite basis from the 3
1040	1040	homestead to a residential care or nursing home and who claim no rebate or 4
1041	1041	credit for such year under this chapter; 5
1042	1042	(2) the municipal property tax of a claimant who is a joint tenant or 6
1043	1043	tenant by the entirety with, and legally separated from, a spouse who is not a 7
1044	1044	member of the household is the tax on the housesite for which the claimant is 8
1045	1045	responsible pursuant to a court-approved settlement agreement; 9
1046	1046	(3) the municipal property tax of a claimant who is a joint tenant with a 10
1047	1047	former spouse and who has possession of the homestead pursuant to the joint 11
1048	1048	owners’ final divorce decree is the municipal property tax for which the 12
1049	1049	claimant is responsible under the joint owners’ final divorce decree or any 13
1050	1050	modifying orders; and 14
1051	1051	(4) if the homestead is a portion of a duplex and all owners of the duplex 15
1052	1052	occupy some portion of the building as their principal residence, the municipal 16
1053	1053	property tax of the claimant shall be that percentage of the total municipal 17
1054	1054	property tax equal to the ratio of the claimant’s principal residence value to the 18
1055	1055	total duplex building value. 19
1056	1056	(d) Whenever a housesite is an integral part of a larger unit such as a farm 20
1057	1057	or a multi-purpose multipurpose or multi-dwelling multidwelling building, 21 BILL AS INTRODUCED S.104
1058	1058	2025 Page 44 of 61
1059	1059
1060	1060
1061	1061	VT LEG #381212 v.3
1062	1062	municipal property taxes paid shall be that percentage of the total municipal 1
1063	1063	property tax as the value of the housesite is to the total value. Upon a 2
1064	1064	claimant’s request, the listers shall certify to the claimant the value of his or 3
1065	1065	her the claimant’s homestead and housesite. 4
1066	1066	* * * 5
1067	1067	Sec. 26. 32 V.S.A. § 6063 is amended to read: 6
1068	1068	§ 6063. CLAIM AS PERSONAL; CREDIT AMOUNT AT TIME OF 7
1069	1069	TRANSFER 8
1070	1070	(a) The right to file a claim under this chapter is personal to the claimant 9
1071	1071	and shall not survive his or her the claimant’s death, but the right may be 10
1072	1072	exercised on behalf of a claimant by his or her the claimant’s legal guardian or 11
1073	1073	attorney-in-fact. When a claimant dies after having filed a timely claim, the 12
1074	1074	municipal property tax credit amount shall be credited to the homestead 13
1075	1075	property tax liability of the claimant’s estate as provided in section 6066a of 14
1076	1076	this title. 15
1077	1077	(b) In case of sale or transfer of a residence, any municipal property tax 16
1078	1078	credit amounts related to that residence shall be allocated to the seller at 17
1079	1079	closing unless the parties otherwise agree. 18 BILL AS INTRODUCED S.104
1080	1080	2025 Page 45 of 61
1081	1081
1082	1082
1083	1083	VT LEG #381212 v.3
1084	1084	Sec. 27. 32 V.S.A. § 6064 is amended to read: 1
1085	1085	§ 6064. CLAIM APPLIED AGAINST OUTSTANDING LI ABILITIES 2
1086	1086	The amount of any municipal property tax credit resulting under this 3
1087	1087	chapter may be applied by the Commissioner, beginning July 1 of the calendar 4
1088	1088	year in which the claim is filed, against any State tax liability outstanding 5
1089	1089	against the claimant. 6
1090	1090	Sec. 28. 32 V.S.A. § 6065 is amended to read: 7
1091	1091	§ 6065. FORMS; TABLES; NOTICES 8
1092	1092	(a) A homestead owner shall declare ownership of a homestead for 9
1093	1093	purposes of the municipal property tax credit. The Commissioner shall adopt 10
1094	1094	rules governing the eligibility requirements for declaring a homestead. In 11
1095	1095	administering this chapter, the Commissioner shall provide suitable claim 12
1096	1096	forms with tables of allowable claims, instructions, and worksheets for 13
1097	1097	claiming a homestead municipal property tax credit. 14
1098	1098	(b) Prior to June 1, the Commissioner shall also prepare and supply to each 15
1099	1099	town in the State notices describing the homestead municipal property tax 16
1100	1100	credit for inclusion in property tax bills. The notice shall be in simple, plain 17
1101	1101	language and shall explain how to file for a property tax credit, where to find 18
1102	1102	assistance filing for a credit, and any other related information as determined 19
1103	1103	by the Commissioner. The notice shall direct taxpayers to a resource where 20
1104	1104	they can find versions of the notice translated into the five most common non-21 BILL AS INTRODUCED S.104
1105	1105	2025 Page 46 of 61
1106	1106
1107	1107
1108	1108	VT LEG #381212 v.3
1109	1109	English languages in the State. A town shall include such notice in each tax 1
1110	1110	bill and notice of delinquent taxes that it mails to taxpayers who own in that 2
1111	1111	town a residential property, without regard for whether the property was 3
1112	1112	declared a homestead pursuant to subdivision 5401(7) of this title. 4
1113	1113	(c) Notwithstanding the provisions of subsection (b) of this section, towns 5
1114	1114	that use envelopes or mailers not able to accommodate notices describing the 6
1115	1115	homestead municipal tax credit may distribute such notices in an alternative 7
1116	1116	manner. 8
1117	1117	Sec. 29. 32 V.S.A. § 6066 is amended to read: 9
1118	1118	§ 6066. COMPUTATION OF MUNICIPAL PROPERTY TAX CREDIT 10
1119	1119	AND RENTER CREDIT 11
1120	1120	(a) An eligible A claimant whose household income does not exceed 12
1121	1121	$47,000.00 and who owned the homestead on April 1 of the year in which the 13
1122	1122	claim is filed shall be entitled to a credit for the prior year’s homestead 14
1123	1123	municipal property tax liability amount determined as follows: in an amount 15
1124	1124	for the upcoming fiscal year that is equal to the amount by which the municipal 16
1125	1125	property taxes for the municipal fiscal year that began in the taxable year upon 17
1126	1126	the claimant’s housesite exceeds a percentage of the claimant’s household 18
1127	1127	income for the taxable year, provided that in no event shall the credit under this 19
1128	1128	subsection exceed the amount of the reduced property tax. The amount of the 20
1129	1129	credit under this subsection shall be determined as follows: 21 BILL AS INTRODUCED S.104
1130	1130	2025 Page 47 of 61
1131	1131
1132	1132
1133	1133	VT LEG #381212 v.3
1134	1134	(1)(A) For a claimant with household income of $130,000.00 or more: 1
1135	1135	(i) the statewide education tax rate, multiplied by the equalized 2
1136	1136	value of the housesite in the taxable year; 3
1137	1137	(ii) minus (if less) the sum of: 4
1138	1138	(I) the income percentage of household income for the taxable 5
1139	1139	year; plus 6
1140	1140	(II) the statewide education tax rate, multiplied by the equalized 7
1141	1141	value of the housesite in the taxable year in excess of $400,000.00. 8
1142	1142	(B) For a claimant with household income of less than $90,000.00 but 9
1143	1143	more than $60,000.00, the statewide education tax rate, multiplied by the 10
1144	1144	equalized value of the housesite in the taxable year, minus (if less) the sum of: 11
1145	1145	(i) the income percentage of household income for the taxable 12
1146	1146	year; plus 13
1147	1147	(ii) the statewide education tax rate, multiplied by the equalized 14
1148	1148	value of the housesite in the taxable year in excess of $1,000,000.00. 15
1149	1149	(C) For a claimant whose household income does not exceed 16
1150	1150	$60,000.00, the statewide education tax rate, multiplied by the equalized value 17
1151	1151	of the housesite in the taxable year, minus the lesser of: 18
1152	1152	(i) the sum of the income percentage of household income for the 19
1153	1153	taxable year plus the statewide education tax rate, multiplied by the equalized 20
1154	1154	value of the housesite in the taxable year in excess of $1,000,000.00; or 21 BILL AS INTRODUCED S.104
1155	1155	2025 Page 48 of 61
1156	1156
1157	1157
1158	1158	VT LEG #381212 v.3
1159	1159	(ii) the statewide education tax rate, multiplied by the equalized 1
1160	1160	value of the housesite in the taxable year reduced by $15,000.00. 2
1161	1161	(2) “Income percentage” in this section means two percent, multiplied by 3
1162	1162	the education income tax spending adjustment under subdivision 5401(13)(B) 4
1163	1163	of this title for the property tax year that begins in the claim year for the 5
1164	1164	municipality in which the homestead residence is located. 6
1165	1165	(3) A claimant whose household income does not exceed $47,000.00 7
1166	1166	shall also be entitled to an additional credit amount from the claimant’s 8
1167	1167	municipal taxes for the upcoming fiscal year that is equal to the amount by 9
1168	1168	which the municipal property taxes for the municipal fiscal year that began in 10
1169	1169	the taxable year upon the claimant’s housesite exceeds a percentage of the 11
1170	1170	claimant’s household income for the taxable year as follows: 12
1171	1171	If household income (rounded then the taxpayer is entitled to 13
1172	1172	to the nearest dollar) is: credit for the reduced property tax in 14
1173	1173	excess of this percent of that income 15
1174	1174	$0.00 — 9,999.00 1.50 16
1175	1175	$10,000.00 — 47,000.00 3.00 17
1176	1176	(4) A claimant whose household income does not exceed $60,000.00 18
1177	1177	shall also be entitled to an additional credit amount from the claimant’s 19
1178	1178	statewide education tax for the upcoming fiscal year that is equal to the amount 20
1179	1179	by which the education property tax for the municipal fiscal year that began in 21 BILL AS INTRODUCED S.104
1180	1180	2025 Page 49 of 61
1181	1181
1182	1182
1183	1183	VT LEG #381212 v.3
1184	1184	the taxable year upon the claimant’s housesite, reduced by the credit amount 1
1185	1185	determined under subdivisions (1) and (2) of this subsection, exceeds a 2
1186	1186	percentage of the claimant’s household income for the taxable year as follows:3
1187	1187	If household income (rounded then the taxpayer is entitled to 4
1188	1188	to the nearest dollar) is: credit for the reduced property tax in 5
1189	1189	excess of this percent of that income 6
1190	1190	$0.00 — 9,999.00 0.50 7
1191	1191	$10,000 — 24,999.00 1.50 8
1192	1192	$25,000.00 — 46,999.00 2.00 9
1193	1193	$47,000.00 — 60,000.00 lesser of 2.50 10
1194	1194	or town rate 11
1195	1195	(5) In no event shall the credit provided for in subdivision (3) or (4) of 12
1196	1196	this subsection exceed the amount of the reduced property tax. The credits 13
1197	1197	under subdivision (4) of this subsection shall be calculated considering only 14
1198	1198	the tax due on the first $1,000,000.00 in equalized housesite value. 15
1199	1199	* * * 16
1200	1200	(e) Property taxes paid by a cooperative, not including a mobile home park 17
1201	1201	cooperative, allocable to property used as a homestead shall be attributable to 18
1202	1202	the co-op member for the purpose of computing the credit of municipal 19
1203	1203	property tax liability of the co-op member under this section. Property owned 20
1204	1204	by a cooperative declared as a homestead may only include the homestead and 21 BILL AS INTRODUCED S.104
1205	1205	2025 Page 50 of 61
1206	1206
1207	1207
1208	1208	VT LEG #381212 v.3
1209	1209	a pro rata share of any common land owned or leased by the cooperative, not 1
1210	1210	to exceed the two-acre housesite limitation. The share of the cooperative’s 2
1211	1211	assessed value attributable to the housesite shall be determined by the 3
1212	1212	cooperative and specified annually in a notice to the co-op member. Property 4
1213	1213	taxes paid by a mobile home park cooperative, allocable to property used as a 5
1214	1214	housesite, shall be attributed to the owner of the housesite for the purpose of 6
1215	1215	computing the credit of municipal property tax liability of the housesite owner 7
1216	1216	under this section. Property owned by the mobile home park cooperative and 8
1217	1217	declared as a housesite may only include common property of the cooperative 9
1218	1218	contiguous with at least one mobile home lot in the park, not to exceed the 10
1219	1219	two-acre housesite limitation. The share attributable to any mobile home lot 11
1220	1220	shall be determined by the cooperative and specified in the cooperative 12
1221	1221	agreement. 13
1222	1222	(f) [Repealed.] 14
1223	1223	(g) Notwithstanding subsection (d) of this section, if the land surrounding a 15
1224	1224	homestead is owned by a nonprofit corporation or community land trust with 16
1225	1225	tax exempt status under 26 U.S.C. § 501(c)(3), the homeowner may include an 17
1226	1226	allocated amount as property tax paid on the land with the amount of property 18
1227	1227	taxes paid by the homeowner on the home for the purposes of computation of 19
1228	1228	the credit under this section. The allocated amount shall be determined by the 20
1229	1229	nonprofit corporation or community land trust on a proportional basis. The 21 BILL AS INTRODUCED S.104
1230	1230	2025 Page 51 of 61
1231	1231
1232	1232
1233	1233	VT LEG #381212 v.3
1234	1234	nonprofit corporation or community land trust shall provide to that 1
1235	1235	homeowner, by January 31, a certificate specifying the allocated amount. The 2
1236	1236	certificate shall indicate the proportion of total property tax on the parcel that 3
1237	1237	was assessed for municipal property tax and for statewide property tax. 4
1238	1238	(h) A homestead owner shall be entitled to an additional property tax credit 5
1239	1239	amount equal to one percent of the amount of income tax refund that the 6
1240	1240	claimant elects to allocate to payment of homestead property tax under section 7
1241	1241	6068 of this title. [Repealed.] 8
1242	1242	* * * 9
1243	1243	Sec. 30. 32 V.S.A. § 6066a is amended to read: 10
1244	1244	§ 6066a. DETERMINATION OF MUNICIPAL PROPERTY TAX CREDIT 11
1245	1245	(a) Annually, the Commissioner shall determine the municipal property tax 12
1246	1246	credit amount under section 6066 of this title, related to a homestead owned by 13
1247	1247	the claimant, based on the prior taxable year’s income and crediting municipal 14
1248	1248	property taxes paid in the prior year. The Commissioner shall notify the 15
1249	1249	municipality in which the housesite is located of the amount of the property tax 16
1250	1250	credit for the claimant for homestead municipal property tax liabilities on a 17
1251	1251	monthly basis. The tax credit of a claimant who was assessed property tax by 18
1252	1252	a town that revised the dates of its fiscal year, however, is the excess of the 19
1253	1253	municipal property tax that was assessed in the last 12 months of the revised 20
1254	1254	fiscal year, over the adjusted property tax of the claimant for the revised fiscal 21 BILL AS INTRODUCED S.104
1255	1255	2025 Page 52 of 61
1256	1256
1257	1257
1258	1258	VT LEG #381212 v.3
1259	1259	year, as determined under section 6066 of this title, related to a homestead 1
1260	1260	owned by the claimant. 2
1261	1261	(b) The Commissioner shall include in the total property tax credit amount 3
1262	1262	determined under subsection (a) of this section, for credit to the taxpayer for 4
1263	1263	homestead property tax liabilities, any income tax overpayment remaining 5
1264	1264	after allocation under section 3112 of this title and setoff under section 5934 of 6
1265	1265	this title, which the taxpayer has directed to be used for payment of property 7
1266	1266	taxes. [Repealed.] 8
1267	1267	(c) The Commissioner shall notify the municipality of any claim and 9
1268	1268	refund amounts unresolved by November 1 at the time of final resolution, 10
1269	1269	including adjudication, if any; provided, however, that towns will not be 11
1270	1270	notified of any additional credit amounts after November 1 of the claim year, 12
1271	1271	and such amounts shall be paid to the claimant by the Commissioner. 13
1272	1272	(d) [Repealed.] 14
1273	1273	(e) At the time of notice to the municipality, the Commissioner shall notify 15
1274	1274	the taxpayer of the municipal property tax credit amount determined under 16
1275	1275	subdivision subsection 6066(a)(1) of this title, the amount determined under 17
1276	1276	subdivision 6066(a)(3) of this title, any additional credit amounts due the 18
1277	1277	homestead owner under section 6066 of this title, the amount of income tax 19
1278	1278	refund, if any, allocated to payment of homestead property tax liabilities, and 20
1279	1279	any late-claim reduction amount. 21 BILL AS INTRODUCED S.104
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1281	1281
1282	1282
1283	1283	VT LEG #381212 v.3
1284	1284	(f)(1) For taxpayers and amounts stated in the notice to towns on or before 1
1285	1285	July 1, municipalities shall create and send to taxpayers a homestead property 2
1286	1286	tax bill, instead of the bill required under subdivision 5402(b)(1) of this title, 3
1287	1287	providing the total amount allocated to payment of homestead education 4
1288	1288	property tax liabilities and notice of the balance due. Municipalities shall 5
1289	1289	apply the amount allocated under this chapter to current year property taxes in 6
1290	1290	equal amounts to each of the taxpayers’ property tax installments that include 7
1291	1291	education taxes. Notwithstanding section 4772 of this title, if a town issues a 8
1292	1292	corrected bill as a result of the notice sent by the Commissioner under 9
1293	1293	subsection (a) of this section, issuance of the corrected new bill does not 10
1294	1294	extend the time for payment of the original bill nor relieve the taxpayer of any 11
1295	1295	interest or penalties associated with the original bill. If the corrected bill is less 12
1296	1296	than the original bill, and there are also no unpaid current year taxes, interest, 13
1297	1297	or penalties, and no past year delinquent taxes or penalties and interest charges, 14
1298	1298	any overpayment shall be reflected on the corrected tax bill and refunded to the 15
1299	1299	taxpayer. 16
1300	1300	(2) For property tax credit amounts for which municipalities receive 17
1301	1301	notice after November 1, municipalities shall issue a new homestead property 18
1302	1302	tax bill with notice to the taxpayer of the total amount allocated to payment of 19
1303	1303	homestead property tax liabilities and notice of the balance due. 20 BILL AS INTRODUCED S.104
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1305	1305
1306	1306
1307	1307	VT LEG #381212 v.3
1308	1308	(3) The property tax credit amount determined for the taxpayer shall be 1
1309	1309	allocated first to current year property tax on the homestead parcel, next to 2
1310	1310	current-year homestead parcel penalties and interest, next to any prior year 3
1311	1311	homestead parcel penalties and interest, and last to any prior year property tax 4
1312	1312	on the homestead parcel. No credit shall be allocated to a property tax liability 5
1313	1313	for any year after the year for which the claim or refund allocation was filed. 6
1314	1314	No municipal tax-reduction incentive for early payment of taxes shall apply to 7
1315	1315	any amount allocated to the property tax bill under this chapter. 8
1316	1316	(4) If the property tax credit amount as described in subsection (e) of 9
1317	1317	this section exceeds the property tax, penalties, and interest due for the current 10
1318	1318	and all prior years, the municipality shall refund the excess to the taxpayer, 11
1319	1319	without interest, within 20 days of the first date upon which taxes become due 12
1320	1320	and payable or 20 days after notification of the credit amount by the 13
1321	1321	Commissioner of Taxes, whichever is later. [Repealed.] 14
1322	1322	(g) The Commissioner of Taxes shall pay monthly to each municipality the 15
1323	1323	amount of municipal property tax credit of which the municipality was last 16
1324	1324	notified related to municipal property tax on homesteads within that 17
1325	1325	municipality, as determined by the Commissioner of Taxes. 18 BILL AS INTRODUCED S.104
1326	1326	2025 Page 55 of 61
1327	1327
1328	1328
1329	1329	VT LEG #381212 v.3
1330	1330	Sec. 31. 32 V.S.A. § 6067 is amended to read: 1
1331	1331	§ 6067. CREDIT LIMITATIONS 2
1332	1332	Only one individual per household per taxable year shall be entitled to a 3
1333	1333	municipal property tax credit under this chapter. An individual who received a 4
1334	1334	homestead exemption or credit with respect to property taxes assessed by 5
1335	1335	another state for the taxable year shall not be entitled to receive a credit under 6
1336	1336	this chapter. No taxpayer shall receive a renter credit under subsection 6066(b) 7
1337	1337	of this title in excess of $2,500.00. No taxpayer shall receive a municipal 8
1338	1338	property tax credit under subdivision subsection 6066(a)(3) of this title greater 9
1339	1339	than $2,400.00 or cumulative credit under subdivisions 6066(a)(1)-(2) and (4) 10
1340	1340	of this title greater than $5,600.00. 11
1341	1341	Sec. 32. 32 V.S.A. § 6068 is amended to read: 12
1342	1342	§ 6068. APPLICATION AND TIME FOR FILING 13
1343	1343	(a) A property tax credit claim or request for allocation of an income tax 14
1344	1344	refund to homestead property tax payment shall be filed with the 15
1345	1345	Commissioner on or before the due date for filing the Vermont income tax 16
1346	1346	return, without extension, and shall describe the school district in which the 17
1347	1347	homestead property is located and shall particularly describe the homestead 18
1348	1348	property for which the credit or allocation is sought, including the school 19
1349	1349	parcel account number prescribed in subsection 5404(b) of this title. A renter 20 BILL AS INTRODUCED S.104
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1351	1351
1352	1352
1353	1353	VT LEG #381212 v.3
1354	1354	credit claim shall be filed with the Commissioner on or before the due date for 1
1355	1355	filing the Vermont income tax return, without extension. 2
1356	1356	(b) If the claimant files a claim after October 15 but on or before March 15 3
1357	1357	of the following calendar year, the municipal property tax credit under this 4
1358	1358	chapter: 5
1359	1359	* * * 6
1360	1360	(c) No request for allocation of an income tax refund or for a renter credit 7
1361	1361	claim may be made after October 15. No municipal property tax credit claim 8
1362	1362	may be made after March 15 of the calendar year following the due date under 9
1363	1363	subsection (a) of this section. 10
1364	1364	Sec. 33. 32 V.S.A. § 6070 is amended to read: 11
1365	1365	§ 6070. DISALLOWED CLAIMS 12
1366	1366	A claim shall be disallowed if the claimant received title to his or her the 13
1367	1367	claimant’s homestead primarily for the purpose of receiving benefits under this 14
1368	1368	chapter. 15
1369	1369	* * * Revenue Allocation and Education Payments * * * 16
1370	1370	Sec. 34. 16 V.S.A. § 4001 is amended to read: 17
1371	1371	§ 4001. DEFINITIONS 18
1372	1372	As used in this chapter: 19 BILL AS INTRODUCED S.104
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1374	1374
1375	1375
1376	1376	VT LEG #381212 v.3
1377	1377	(1) “Average daily membership” of a school district or, if needed in 1
1378	1378	order to calculate the appropriate homestead education income tax rate, of the 2
1379	1379	municipality as defined in 32 V.S.A. § 5401(9), in any year means: 3
1380	1380	* * * 4
1381	1381	(2) “Equalized grand list” has the same meaning that equalized 5
1382	1382	education property tax grand list has in 32 V.S.A. chapter 135. 6
1383	1383	* * * 7
1384	1384	Sec. 35. 16 V.S.A. § 4025 is amended to read: 8
1385	1385	§ 4025. EDUCATION FUND 9
1386	1386	(a) The Education Fund is established to comprise the following: 10
1387	1387	(1) all revenue paid to the State from the statewide education tax on 11
1388	1388	nonhomestead and homestead property under 32 V.S.A. chapter 135; 12
1389	1389	* * * 13
1390	1390	(10) wind-powered electric generating facilities tax deposited pursuant 14
1391	1391	to 32 V.S.A. § 5402c; and 15
1392	1392	(11) revenues from the short-term rental surcharge under 32 V.S.A. 16
1393	1393	§ 9301; and 17
1394	1394	(12) revenues from the education income tax imposed by 32 V.S.A. 18
1395	1395	chapter 151, subchapter 14. 19
1396	1396	(b) Monies in the Education Fund shall be used for the following: 20
1397	1397	* * * 21 BILL AS INTRODUCED S.104
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1399	1399
1400	1400
1401	1401	VT LEG #381212 v.3
1402	1402	(3) To make payments required under 32 V.S.A. § 6066(a)(1) and only 1
1403	1403	that portion attributable to education taxes, as determined by the Commissioner 2
1404	1404	of Taxes, of payments required under 32 V.S.A. § 6066(a)(3). The State 3
1405	1405	Treasurer shall withdraw funds from the Education Fund upon warrants issued 4
1406	1406	by the Commissioner of Finance and Management based on information 5
1407	1407	supplied by the Commissioner of Taxes. The Commissioner of Finance and 6
1408	1408	Management may draw warrants for disbursements from the Fund in 7
1409	1409	anticipation of receipts. All balances in the Fund at the end of any fiscal year 8
1410	1410	shall be carried forward and remain a part of the Fund. Interest accruing from 9
1411	1411	the Fund shall remain in the Fund. [Repealed.] 10
1412	1412	* * * 11
1413	1413	Sec. 36. 32 V.S.A. § 435(b) is amended to read: 12
1414	1414	(b) The General Fund shall be composed of revenues from the following 13
1415	1415	sources: 14
1416	1416	* * * 15
1417	1417	(5) individual income taxes levied pursuant to chapter 151 of this title, 16
1418	1418	except for the education income tax surcharge imposed by section 5962 of this 17
1419	1419	title; 18
1420	1420	* * * 19 BILL AS INTRODUCED S.104
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1422	1422
1423	1423
1424	1424	VT LEG #381212 v.3
1425	1425	* * * Application of Education Income Tax to Renters * * * 1
1426	1426	Sec. 37. 32 V.S.A. § 5962 is amended to read: 2
1427	1427	§ 5962. EDUCATION INCOME TAX ON INDIVIDUALS 3
1428	1428	(a) In addition to the personal income tax assessed under section 5822 of 4
1429	1429	this title, there shall be an education income tax imposed each taxable year 5
1430	1430	upon the adjusted gross income earned or received in that year by every 6
1431	1431	individual subject to income taxation under the laws of the United States who 7
1432	1432	is not listed as a renter for that year on a landlord certificate furnished pursuant 8
1433	1433	to section 6069 of this title, in an amount determined by the following tables 9
1434	1434	and adjusted as required under this section and section 5963 of this subchapter. 10
1435	1435	* * * 11
1436	1436	Sec. 38. 32 V.S.A. § 5964 is added to read: 12
1437	1437	§ 5964. EDUCATION INCOME TAX; RENTER CREDIT 13
1438	1438	(a) A resident individual or part-year resident individual shall be entitled to 14
1439	1439	a nonrefundable credit against the tax imposed by section 5962 of this title for 15
1440	1440	the taxable year. The total credit per taxable year shall be 21 percent of gross 16
1441	1441	rent paid by the renter during the taxable year, multiplied by the percentage 17
1442	1442	that the individual’s income that is earned or received during the period of the 18
1443	1443	individual’s residency in this State bears to the individual’s total income. 19 BILL AS INTRODUCED S.104
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1445	1445
1446	1446
1447	1447	VT LEG #381212 v.3
1448	1448	(b) As used in this section, “gross rent” means the rent and related charges 1
1449	1449	paid by the individual for the right to occupy the individual’s primary dwelling 2
1450	1450	as the individual’s domicile in this State during the taxable year. 3
1451	1451	Sec. 39. 16 V.S.A. § 4025 is amended to read: 4
1452	1452	§ 4025. EDUCATION FUND 5
1453	1453	* * * 6
1454	1454	(b) Monies in the Education Fund shall be used for the following: 7
1455	1455	* * * 8
1456	1456	(3) To make payments required under 32 V.S.A. § 5964, as determined 9
1457	1457	by the Commissioner of Taxes. The State Treasurer shall withdraw funds from 10
1458	1458	the Education Fund upon warrants issued by the Commissioner of Finance and 11
1459	1459	Management based on information supplied by the Commissioner of Taxes. 12
1460	1460	The Commissioner of Finance and Management may draw warrants for 13
1461	1461	disbursements from the Fund in anticipation of receipts. All balances in the 14
1462	1462	Fund at the end of any fiscal year shall be carried forward and remain a part of 15
1463	1463	the Fund. Interest accruing from the Fund shall remain in the Fund. 16
1464	1464	* * * 17
1465	1465	* * * Effective Dates * * * 18
1466	1466	Sec. 40. EFFECTIVE DATES 19
1467	1467	(a) This section and Secs. 1–3 (income sensitivity adjustments and new 20
1468	1468	income tax bracket) shall take effect on July 1, 2025. 21 BILL AS INTRODUCED S.104
1469	1469	2025 Page 61 of 61
1470	1470
1471	1471
1472	1472	VT LEG #381212 v.3
1473	1473	(b) Secs. 37–39 (application of education income tax to renters) shall take 1
1474	1474	effect on July 1, 2029. 2
1475	1475	(c) All remaining sections shall take effect on July 1, 2026. 3