Day: March 29, 2024

Tax increases topping $125 million hit the House floor this week amid ongoing tension on increased state spending in the absence of pandemic-era federal funding. Despite the significant new proposed revenue for the state, none of it would alleviate the $230 million education fund deficit that is slated to increase property taxes by 18%. While the bills housing these taxes all passed, there was notable vocal dissent from legislators on the floor about how the money would be allocated and the long-term impact on the Vermont economy.

As noted by Rep. Scott Beck (R-St. Johnsbury): “In the last 10 years, personal income tax receipts in the state of Vermont have grown 54%, sales tax receipts have grown 65% and property taxes have increased by 53%. Corporate income tax has nearly tripled in the last 10 years.”

Tax increases passed by the House include:

• $15.3 million – Increase in the Global Intangible Low Tax Income (GILTI) and Foreign Derived Intangible Income (FDII) taxes to increase the amount of revenue from foreign corporations doing business in Vermont. Giving Vermont the highest GILTI and FDII tax rates in the country.
• $17.7 million – Increase in the top marginal tax rate of corporate income tax from 8.5% to 10% giving Vermont the highest corporate tax rate in the country.
• $74.9 million – New personal income tax bracket of 11.75% starting at $500,000 of income per tax flier, including.
• $17.5 million – Property transfer tax increase from 1.25% to 3.25% for transfer values greater than $750,000. This tripling of costs will likely harm the ability to attract new and scaling employers in purchasing industrial space for expansion.

We know the House isn’t done there. As the focus now shifts to the education fund, we are expecting to see taxes proposed regarding cloud internet services and software as a service. Legislators need to hear from you about your concerns. Please contact your Representatives and Senators.