Budget & Taxes (Tax Incentives)

introduced · Vermont · Senate Jan 27, 2026

S 315: An act relating to a homestead property tax exemption for long-term residents who are 65 years of age or older

S 315 would exempt Vermont residents aged 65 or older who have lived in the state continuously for 10 years from the homestead property tax. The exemption phases in over four years: 75% reduction in 2027, 50% in 2028, 25% in 2029, and full exemption beginning fiscal year 2030. It applies only to the education property tax portion of homestead taxes. The bill takes effect July 1, 2026.

Topics ✓ Budget & TaxesSupports Budget & TaxesProvides tax relief for seniors (65+) via phased homestead exemption on education property tax, reducing state revenue while targeting vulnerable group without defunding education programs.95% confidence

Sub-Topics Property Tax Tax Incentives

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introduced · Vermont · Senate Jan 20, 2026

S 274: An act relating to the sales and use tax exemption for fuel used in a residence for domestic use

This bill narrows Vermont's sales tax exemption for fuel used in homes by removing the exemption for second homes, short-term rentals, and other nonhomestead residential properties. It amends tax code to define "residence" as only properties not listed as "nonhomestead residential" on an annual July 1 list published by the Commissioner. Sellers can rely on this published list to avoid tax liability if they mistakenly exempt fuel sales to nonhomestead properties. The change takes effect July 1, 2029, directly affecting property owners of secondary or rental homes who previously qualified for the tax exemption.

Topics ✓ Budget & TaxesSupports Budget & TaxesRemoves tax exemption for nonhomestead properties, closing a loophole to increase state revenue and align with fiscal responsibility.90% confidence

Sub-Topics Sales Tax Tax Incentives

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introduced · Vermont · Senate Jan 23, 2026

S 296: An act relating to development agreements for tax increment financing

This bill requires developers using tax increment financing (TIF) for municipal projects to provide specific financial guarantees to protect municipalities. Developers must guarantee that project tax increments will cover the municipality's debt payments for the project's duration, backed by security like letters of credit or bonds. Additionally, developers must include at least one extra protection - such as property value safeguards, project continuity measures, or equity arrangements - in their agreements. These rules apply to all TIF projects, including housing developments under the Community and Housing Infrastructure Program, ensuring municipalities have financial recourse if developers fail to meet obligations.

Topics ✓ Budget & TaxesSupports Budget & TaxesBill mandates financial guarantees to protect municipalities' TIF debt payments, strengthening fiscal responsibility and preventing budget shortfalls in development projects.90% confidence

Sub-Topics Debt & Bonds Tax Incentives

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introduced · Vermont · House Jan 30, 2026

H 844: An act relating to sales tax and a new surcharge paid on fuel by owners of short-term rental and second home properties

H 844 (Vermont) modifies sales tax rules for fuel used in residential properties. It removes the sales tax exemption for fuel purchases when a property was used as a short-term rental or occupied by the owner for fewer than 183 days in the past year. Instead, owners of such properties must pay a new 3% surcharge on residential fuel sales. Revenue from this surcharge will fund the Home Weatherization Assistance Fund, which helps low-income households improve energy efficiency. The bill takes effect August 1, 2026.

Topics ✓ Budget & TaxesSupports Budget & TaxesCreates 3% surcharge on fuel for short-term rentals to fund Home Weatherization Assistance Fund for low-income households, directly increasing tax revenue for public service funding.90% confidence ✓ EnergySupports EnergyFunds energy efficiency improvements for low-income households via surcharge revenue, directly advancing energy efficiency goals.90% confidence ✓ HousingSupports HousingBill imposes 3% surcharge on short-term rental fuel sales to fund Home Weatherization Assistance for low-income housing, directly advancing affordable housing programs.90% confidence

Sub-Topics Fees & Licensing Sales Tax Tax Incentives Energy Efficiency

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signed · Vermont · Senate May 29, 2026

S 327: An act relating to economic development

This bill increases Vermont's downtown and village center tax credit program from $3 million to $5 million annually to support local business revitalization. It allocates specific funds for small business services, including $300,000 for legal support through Vermont Law School's business law center, $689,000 for expanded advising via the Small Business Development Center, and $594,000 to help microbusinesses through the Community Action Partnership. Additional funding includes $200,000 for an outdoor recreation economic study, $150,000 for the International Business Office, and $3 million for brownfields remediation. The bill also creates a task force to study business development needs and repeals the planned end of the Vermont Employment Growth Incentive program.

Topics ✓ Budget & TaxesSupports Budget & TaxesIncreases tax credit program funding from $3M to $5M annually, providing tax relief for small businesses and funding business support services through targeted allocations.95% confidence

Sub-Topics Business Taxes Tax Credits Tax Incentives Tags Economic Development Small Business

in committee · Vermont · House Feb 6, 2025

H 134: An act relating to calculating land use change tax and creating a new land use change tax exemption for developing affordable housing

This bill changes how Vermont calculates the land use change tax when agricultural or forest land is partially developed. Instead of valuing the changed portion as a separate parcel, it requires a proportional calculation based on acreage. It also creates a new tax exemption for land withdrawn specifically to build affordable housing, provided the land fronts a public road, is within three miles of a downtown area, and doesn’t fragment existing parcels. This directly affects developers building affordable housing projects meeting these criteria by eliminating the tax on qualifying land conversions. The changes apply to land no longer eligible for agricultural/forest land valuation under current rules.

Topics ✓ Budget & TaxesSupports Budget & TaxesCreates tax exemption for affordable housing development, reducing tax burden on developers and promoting housing affordability as a public service.85% confidence ✓ HousingSupports HousingCreates tax exemption for affordable housing development, reducing costs for builders and directly advancing affordable housing initiatives.95% confidence

Sub-Topics Tax Incentives Affordable Housing Land Use Property Taxes

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introduced · Vermont · House Feb 4, 2025

H 135: An act relating to administrative and policy changes to Vermont tax laws and extending reimbursement to municipalities for tax abatement due to flooding

H.135 updates Vermont's tax laws to align with federal income tax rules as of December 31, 2024, requiring joint state tax filings for couples who file jointly at the federal level. It adjusts the state's child and earned income tax credits to match federal rules, removing identification number requirements for some claimants. The bill also increases pay for property tax hearing officers and extends state reimbursement to municipalities for education property taxes reduced due to flooding. These changes directly affect Vermont taxpayers, families claiming credits, and flood-impacted municipalities.

Topics ✓ Budget & TaxesSupports Budget & TaxesAligns tax laws with federal rules, adjusts credits for relief, reimburses municipalities for flood-related tax losses, promoting fiscal management and tax relief.90% confidence

Sub-Topics Income Tax Property Tax Tax Incentives

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introduced · Vermont · House Jan 23, 2025

H 76: An act relating to an income tax exemption for National Guard active duty subsistence and quarters allowance

This bill exempts Vermont National Guard members' state active duty subsistence and quarters allowance from the state's personal income tax. It directly affects Vermont-resident National Guard members who receive this specific allowance during state active duty. The key provision adds this allowance to Vermont's list of exempt military income, removing it from taxable income calculations. The exemption applies retroactively to tax years beginning January 1, 2025, and takes effect January 1, 2026.

Topics ✓ Budget & TaxesSupports Budget & TaxesExempts National Guard subsistence allowance from income tax, providing tax relief for military members, aligning with support indicators for tax relief.95% confidence ✓ VeteransSupports VeteransExempts National Guard active duty income from state tax, expanding financial benefits for military members serving state duty.95% confidence

Sub-Topics Income Tax Tax Incentives National Guard & Reserve

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introduced · Vermont · House Feb 28, 2025

H 438: An act relating to exempting sales of building materials and supplies from sales and use tax for priority housing projects

This bill would create a new sales tax exemption for building materials and supplies used in constructing "priority housing projects" as defined in Vermont law. It directly affects construction companies and developers building qualifying housing projects by eliminating the state sales tax on materials like lumber, drywall, and roofing. The exemption applies to all materials consumed during construction, including those physically incorporated into the building. The change would take effect on July 1, 2025, and requires vendors to maintain records of exempt sales.

Topics ✓ Budget & TaxesSupports Budget & TaxesExempts construction materials from sales tax for priority housing projects, reducing tax burden on developers and promoting affordable housing development through fiscal relief.95% confidence ✓ HousingSupports HousingExempts construction materials from sales tax for priority housing projects, reducing development costs to advance housing availability.90% confidence

Sub-Topics Sales Tax Tax Incentives Property Taxes

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