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Issue Updates from the State House | Week of March 9, 2026

March 13, 2026

Issue Updates from the State House

Week of March 9, 2026

A weekly snapshot of key legislative activity impacting Vermont’s business community.

Career and Technical Education (CTE): The Senate Education Committee unanimously advanced S.313, a bill outlining legislative intent to establish governance models, expand access to CTE programs, align graduation credits, and integrate adult education. As the bill moves to the Senate floor, continued collaboration and attention to implementation details will be essential to turn these goals into practical outcomes.
Act 250: The Senate Natural Resources committee unanimously advanced S.325, a bill that would make amendments to 2024’s Act 181 and allow more time to make technical corrections to the Act including moving interim exemptions to 2030, delaying the road rule until 2030, and delaying the implementation of tier 3 until July 2028. The bill now moves to the Senate Appropriations for further consideration.
Event Ticketing: The House advanced H.512, a legislation aimed at curbing excessive resale of event tickets and strengthening consumer protections for venues using online ticketing platforms. The bill now moves to the Senate for further consideration.
Sister State Program: The House Appropriations committee unanimously advanced H.674, a bill that would remove the repeal of the Ireland Trade Commission and establish a process for establishing additional Vermont Sister States, strengthening Vermont’s international engagement and to fostering mutually beneficial relationships with governments outside the United States. The bill now moves to the House Floor.
School Budgets: The House Ways and Means Committee heard updated school budget statistics following Town Meeting week, showing that 36 of the 102 passed school budgets increased by more than 6 percent. Changes in federal funding, rising healthcare costs, and overall price increases continue to highlight the structural spending pressures facing Vermont’s education system.
Relocating Revenue: The House Ways and Means Committee continues to weigh options to address funding shortfalls in both the Education and Transportation Funds. A proposal would shift a portion of the Vehicle Purchase and Use Tax to the Transportation Fund while moving part of the Sales and Use Tax to the Education Fund to maintain level funding during the transition, helping stabilize transportation revenue as broader education spending reforms remain necessary.
Primary Care: The Senate Health and Welfare Committee unanimously advanced S.197, a bill aimed at increasing the use of primary care to reduce strain on hospital systems. This step toward long-term healthcare cost containment now moves to the Senate floor.
Reference Based Pricing: The Senate Health and Welfare unanimously advanced S.190, a bill continuing momentum towards health care cost containment efforts by increasing price transparency and moving the Green Mountain Care Board closer to implementation of reference-based pricing. The bill now moves to the Senate Floor.
Housing Solutions: The House Ways and Means committee advanced H.775, legislation aimed at promoting more efficient housing development and creating accountability for municipal housing targets. The bill now moves to the House Appropriations Committee for further consideration.
Parental and Family Medical Leave: The House General and Housing committee reviewed but declined to advance H.459, which have would have prohibited the concurrent use of Workers Compensation and Parental and Family Medical Leave. By not advancing the bill before the crossover deadline, the committee preserved existing policies that support job protection timelines, return-to-work planning, and staffing predictability for employers.
Water Connections: The Senate advanced S.212, a bill aimed at streamlining the wastewater connections permitting process and enhancing coordination of municipal and state-level permitting systems. This measure would help reduce timelines and increase the efficiency of new development projects and now moves to the House.
Economic Development: The Senate Economic Development, Housing, and General Affairs committee unanimously advanced S.327, a bill that invests in further funds for the downtown center tax credit, business support services and studies, removes the VEGI sunset, and establishes task forces to study potential for a new culinary institute and an interstate highway alternative to Route 22A. The Vermont Chamber is named in both task forces, and the bill now moves to the Senate floor.
Event Permitting: The Senate Economic Development, Housing, and General Affairs Committee unanimously advanced S.278, a bill that would establish cannabis event permits modeled after alcohol event permits, allow retailers to sell higher quantities, and repeal integrated license provisions. The bill now moves to the Senate Floor.
Building Energy Code: The House Energy and Digital Infrastructure committee advanced on a 6-3 vote H.718, a bill that would create structural updates to Vermont’s residential building standards framework for residences with fewer than three dwelling units. The bill now moves to the House Appropriations Committee for further consideration.
Commercial Property Assessed Clean Energy (C-PACE): The Senate Natural Resources and Energy committee unanimously advanced S.138, a bill that would expand Vermont’s PACE program to commercial and industrial buildings, allowing businesses to finance efficiency, renewable, and resilience improvements through long-term, fixed-rate property assessments. The bill now moves to the Senate Floor.
Tax Classification: The House Ways and Means committee continued work on expanding property tax classifications from two to three categories. Final edits and a vote are expected by the end of next week.
Education Misses the Mark: With the policy crossover deadline now past, House and Senate Education committees failed to advance meaningful education reform on the timeline established in Act 73 last year. Despite having nine legislative weeks to act following a taxpayer- funded summer task force, the committees will now seek special permission to continue work beyond the deadline as pressure mounts to address rising education costs and system reform.
Education Spending: The Senate Finance Committee on a 5-2 vote advanced S.220. The bill would limit how much school districts can increase per-pupil education spending in FY2028 and FY2029 by establishing an allowable growth rate tied to prior year spending, an approach intended to slow education cost growth and reduce the number of districts triggering the excess spending penalty. The bill now moves to the Senate Floor.
Housing Availability: The Senate Economic Development, Housing, and General Affairs committee on a unanimously advanced S.328, a bill that would fund important housing programs and study legal measures needed to require common interest communities to allow long term rentals, operation of family child care homes, and the building of accessory dwelling units on a homeowner’s property. The bill now moves to the Senate Floor.
Noncompete: The House recommitted H.205, a bill broadly prohibiting non-compete agreements with limited exceptions, back to the House Commerce and Economic Development Committee. While the language could still reappear in other labor-related legislation later this session, the move represents a significant setback for the bill brought on by disparate treatment of business and educational settings.
Franchises: The House Commerce and Economic Development Committee voted to unanimously advance H.733, a bill requiring businesses filing with the Secretary of State to indicate if the business is operating as a franchisee or franchisor. If voted out of committee, the bill will move to the House Floor.
Healthcare: The House Health Care committee on a 8-3 vote advanced H.585. The bill retains the allowance of Association Health Plans in 2028 if Federal law changes but adds a study due in 2027 on potential impacts to the Qualified Health Plans. These plans could be an important option for businesses and entrepreneurs struggling with high costs and limited options. The bill now moves to the House Floor.
Private Equity in Healthcare: The House Health Care committee is expected to vote later today on H.583, a bill regulating private equity in healthcare related private businesses. While the bill has improved since introduction, the Senate will need to consider the highly problematic provisions that persist relating to regulation and reporting requirements for privately owned businesses. The bill will move to the House Floor if advanced.

March 13, 2026

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March 13, 2026

Investment Income Tax Debate Raises Larger Questions About Vermont’s Fiscal Strategy

As Vermont lawmakers grapple with rising property taxes and growing pressure on the Education Fund, a new proposal to tax investment income is emerging as one potential source of revenue.

The concept surfaced this week during several hours of discussion in the Senate Finance Committee as lawmakers explored amendments to S.282 that would apply a surcharge to certain types of investment earnings in Vermont. The proposal mirrors a structure used at the federal level and would apply to income already reported on federal tax returns.

The conversation reflects a familiar pattern in Montpelier this time of year. As budget pressures mount and property tax projections continue to draw attention, lawmakers are looking across the tax code for potential sources of revenue to help stabilize the state’s finances.

Supporters of the idea argue that raising new revenue from investment income could help offset property tax pressures tied to education funding.

At the same time, the discussion highlights a broader fiscal question facing the state. Are Vermont’s affordability challenges primarily a revenue issue, or are they driven by the underlying growth in public spending?

What the Proposal Signals

While the proposal itself may evolve or ultimately stall, the debate reflects a growing effort by some policymakers to look toward new revenue sources to help address Vermont’s fiscal pressures.

Roughly 12,000 Vermonters currently pay the federal tax on investment income that serves as the model for the proposal. Revenue from those taxpayers is highly concentrated among higher income households, meaning policies built around investment income often rely on a relatively small number of taxpayers.

Because investment earnings fluctuate with financial markets and economic cycles, taxes tied heavily to this income can produce more volatile revenue streams than traditional sources such as income or sales taxes.

A Larger Affordability Question

The central issue raised during the hearing was whether new revenue alone can address the affordability challenges Vermonters are experiencing.

Property taxes are rising largely because education spending has continued to grow faster than available revenue sources. Without addressing the underlying cost trajectory of the education system itself, new taxes primarily change where funding comes from rather than addressing the structural pressures within the system.

In that sense, a tax on investment income could generate additional revenue for the Education Fund, but it would not directly change the spending trends that are driving property tax increases.

Why Business Leaders Are Watching

The proposal also intersects with the structure of Vermont’s economy.

Many Vermont companies operate as pass through businesses such as LLCs, partnerships, and S corporations. In these structures, business profits are reported on the owner’s personal income tax return. Taxes applied at the individual level therefore influence the after-tax income that business owners use for reinvestment, hiring, and expansion.

For that reason, proposals affecting investment income often draw attention from the business community and investors evaluating Vermont’s long term economic climate.

The discussion in committee also underscored the importance of evaluating tax policy changes through multiple perspectives. Policies that affect investment income intersect with entrepreneurship, business ownership, and long-term capital investment in Vermont’s economy.

The Conversation Ahead

Even if the proposal itself does not advance this year, the discussion surrounding S.282 highlights a broader debate that is likely to continue.

Improving affordability in Vermont will ultimately require addressing both sides of the fiscal equation. Policymakers will need to manage spending growth while also supporting the economic conditions that expand the state’s tax base over time.

The balance between those priorities, fiscal sustainability and economic competitiveness, will likely remain central to Vermont’s policy discussions in the months ahead.

March 13, 2026

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March 13, 2026March 13, 2026

Federal Tax Conformity Bill Advances with Expanded R&D Incentives for Vermont Businesses

The House Ways and Means Committee has advanced a miscellaneous tax bill updating Vermont’s conformity with federal tax law and making several targeted changes to the state’s tax code.

While many provisions are technical, the decisions in this bill will influence how Vermont businesses calculate taxable income, deduct certain expenses, access tax incentives, and ultimately decide where to invest in research, development, and innovation.

Because Vermont does not automatically conform to federal tax law, the Legislature periodically reviews changes made by Congress and decides which provisions to adopt at the state level. Following the passage of H.R.1 last summer, lawmakers are now determining how those federal tax changes should apply within Vermont’s tax system — and where the state will take a different policy approach.

Why it matters: For businesses making investment decisions, these conformity updates can matter as much as changes to tax rates. The structure of deductions, credits, and cost recovery rules influences where companies choose to invest in equipment, research, and workforce expansion.

What This Means for Vermont Businesses

Federal conformity decisions shape how businesses calculate taxable income and how certain investments are treated under Vermont’s tax code.

Many provisions in this bill affect how companies recover the cost of investments such as equipment purchases, research and development, and financing. These rules influence how businesses plan capital investments, evaluate new projects, and forecast future tax liability.

Several federal provisions that expand deductions for operating expenses will flow through to Vermont, while lawmakers chose not to adopt certain federal tax preferences tied to investment income and international taxation.

For Vermont businesses, the practical result is straightforward: some federal tax changes will apply automatically to Vermont returns, while others will require separate state adjustments.

Research and Development Policy

Research and development policy is one of the most closely watched business provisions in the bill.

In recent years, federal tax rules changed how companies deduct research expenses, requiring many businesses to spread those deductions over five years rather than deducting them immediately.

Recent federal legislation restored immediate deductibility for smaller businesses. The House Ways and Means Committee advanced the following conformity choices:

Small businesses, as defined under federal law (those with average annual receipts under roughly $31 million), will be able to fully deduct research expenses.
Larger businesses will continue to amortize those expenses over five years for Vermont tax purposes.

Earlier concepts considered would have permanently disallowed the deduction of research expenses at the state level. That proposal raised significant concerns among innovation-driven employers.

The final structure reflects extensive collaboration among the House Ways and Means Committee, the Administration, tax professionals, and the Vermont Chamber of Commerce. Chair Kornheiser noted during the committee’s discussion the Vermont Chamber’s role in helping shape the R&D framework and bringing business expertise into the policy development process.

Major Expansion of Vermont’s R&D Tax Credit

The bill also significantly expands Vermont’s existing research and development tax credit.

Currently, Vermont’s credit equals 27 percent of the federal R&D credit for qualifying research conducted in the state.

The bill increases that rate to 75 percent of the federal credit and raises the annual statewide cap from $3 million to $5 million.

The takeaway: If enacted, this would represent one of the largest expansions of Vermont’s research incentive in recent years.

Other Federal Tax Changes Vermont Will Adopt

Several federal changes affecting business taxation will flow through to Vermont under the bill.

More generous expensing of business equipment: Federal law increased the amount businesses can immediately expense for depreciable assets from $1 million to $2.5 million. Vermont will conform to this change, allowing businesses to recover equipment costs more quickly.
Expanded business interest deductions: Federal law increased the allowable deduction for business interest from 30 percent to 50 percent of adjusted taxable income. Vermont will conform to this provision, allowing businesses with significant borrowing to deduct a larger share of interest expenses.
Changes to controlled foreign corporation reporting rules: Federal adjustments to pro rata share rules will flow through to Vermont, affecting companies that hold interests in certain foreign corporations.
Updates to corporate charitable deduction limits: Federal law changed how corporations calculate deductions for charitable contributions. Vermont will conform to those changes as well.
Federal expansion of the Child and Dependent Care Tax Credit will also flow through to Vermont’s corresponding state credit.

Where Vermont Chose a Different Path

In several areas, the Committee chose not to adopt new federal tax preferences.

These include:

Qualified Small Business Stock (QSBS): Federal law expanded the exclusion for capital gains on certain startup investments. Vermont will not conform to that change, meaning those gains remain taxable at the state level.
Section 250 international income deductions: The bill decouples Vermont from federal deductions related to certain international income earned by multinational corporations. This provision represents one of the largest revenue components in the bill.
Special depreciation for certain production facilities: Federal law created a new bonus depreciation provision for some manufacturing property. Vermont will not adopt that provision and will instead continue requiring the property to be depreciated over time.

The Bottom Line

Federal conformity bills often receive limited attention because many provisions are technical.

However, the choices made in these updates can significantly influence how Vermont businesses calculate taxable income and how the state structures economic incentives.

This year’s bill reflects a mix of policy decisions: adopting several federal changes that expand business deductions, declining to follow others that would reduce state revenue, and significantly expanding Vermont’s research and development tax credit.

The Vermont Chamber will continue working with policymakers to ensure Vermont’s tax system supports a competitive, predictable environment for the businesses that drive Vermont’s economy.

March 13, 2026

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From Planning to Policy: Vermont’s Economic Moment Is Now

March 6, 2026

From Planning to Policy: Vermont’s Economic Moment Is Now

As Vermont lawmakers return to Montpelier following Town Meeting break, the legislative session enters the phase where ideas must become decisions. For Vermont’s economy, those decisions carry real consequences.

The first half of the session is often defined by hearings, proposals, and policy exploration. The second half is where priorities are tested, and choices become outcomes.

Over the past several years, Vermonters have done something important. We have invested significant time and energy into planning for the state’s economic future. The Vermont Futures Project’s Economic Action Plan brought together the perspectives of more than 5,000 Vermonters and established measurable goals for workforce growth, housing development, and long-term economic opportunity.

That effort produced something Vermont has historically lacked: a shared economic roadmap grounded in data.

But a roadmap alone does not move the state forward. Vermont has long excelled at identifying challenges, but progress requires moving beyond episodic decision making toward sustained economic strategy.

The question now is whether Vermont will translate that planning into policies capable of addressing the economic pressures businesses and families are experiencing today.

Those pressures are real.

Nationally, the economic outlook entering March reflects cautious resilience paired with continued uncertainty. Inflation remains above the Federal Reserve’s long-term target; interest rates remain elevated, and many industries report difficulty finding workers while managing rising costs.

For Vermont, these national dynamics are amplified by structural challenges closer to home.

Recent economic competitiveness data place Vermont near the bottom nationally on measures including economic momentum, long term outlook, and workforce demographics. These rankings underscore the structural challenges the state must address to strengthen affordability and economic opportunity.

Demographics alone present a stark reality. Over 17,000 Vermonters are projected to retire annually this decade, while far fewer young workers are entering the labor force. To maintain economic stability, Vermont must add roughly 13,500 workers each year through population growth and workforce expansion.

At the same time, housing shortages continue to constrain that growth. The state will need tens of thousands of additional housing units to support the workforce Vermont’s economy requires.

When businesses cannot find workers, expansion stalls. When housing is unavailable or unaffordable, recruitment becomes nearly impossible. When regulatory timelines stretch into years instead of months, investment flows elsewhere.

Employers across Vermont are experiencing these pressures simultaneously.

There have been encouraging signs of progress. Conversations about health care affordability, housing infrastructure, and workforce recruitment reflect a growing recognition that Vermont’s affordability challenges are interconnected.

Vermonters are confronting rising property taxes and education costs that are intensifying the broader affordability conversation across communities. Recognizing the challenge, however, is not the same as solving it. If Vermont is serious about improving affordability and strengthening economic opportunity, several principles should guide the decisions ahead.

First, Vermont must strengthen fiscal predictability. State spending has grown significantly in recent years, placing pressure on the tax base that supports essential services. Businesses and families alike need stability and transparency in fiscal policy to make long term decisions about investment, hiring, and where to build their future.

Second, Vermont must modernize the regulatory systems that shape housing and economic development. Employers consistently report that permitting timelines and regulatory complexity increase costs and slow projects that communities need.

Third, Vermont must confront the reality of demographic change. A shrinking working age population is not a temporary challenge, but a structural shift that will shape Vermont’s economic capacity for decades. Addressing it requires coordinated strategies to recruit new residents, retain graduates, and expand housing and opportunity for the next generation of Vermonters.

These priorities reflect the areas the Vermont Chamber identified at the start of the legislative session and continue to guide our work in Montpelier as the session moves into its second half. These issues are not simply business concerns.

When businesses grow, they create jobs, support local tax bases, and sustain the services communities rely on, from schools and infrastructure to the small-town economies that define Vermont’s identity.

The Vermont Chamber of Commerce works to bring these economic realities into policy discussions every day in Montpelier. Representing employers of all sizes, industries, and regions of the state, the Chamber’s role is to ensure that the perspective of Vermont’s business community is part of the decision-making process.

Vermont has done the planning. The data is clear. The goals are defined.

The weeks ahead will determine whether Vermont translates that planning into policy and whether those policies lead to the action necessary to strengthen affordability, competitiveness, and opportunity across the state.

Vermont’s future is not predetermined. It will be shaped by the policy choices made in Montpelier in the weeks ahead.

March 6, 2026

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Issue Updates from the State House | Week of February 24, 2026

February 27, 2026February 27, 2026

Issue Updates from the State House

Week of February 24, 2026

A weekly snapshot of key legislative activity impacting Vermont’s business community.

Commerce Budget: The House Commerce and Economic Development Committee finalized its annual budget letter to Appropriations, outlining funding priorities across housing, workforce, and economic development. Key requests include continued support for VHIP, workforce training through Advance Vermont, the International Business Office, and expanded Downtown and Village Tax Credits to spur redevelopment. Several proposals include one-time funding components, particularly within housing, workforce, rural technical assistance, and economic development initiatives.
Housing: The Senate Economic Development, Housing, and General Affairs Committee continued work on S.328, adding accessory dwelling units to the list of uses that must be permitted under homeowners association bylaws and reviewing the bill’s broader budget implications. As housing affordability and economic growth remain closely tied to population trends, securing and sustaining funding for these initiatives will be critical as budget negotiations advance.
Housing Solutions: The House General and Housing Committee advanced H.775, legislation aimed at promoting more efficient housing development and strengthening access to residential health care services. The bill now moves to the House Ways and Means Committee for further consideration.
Yield: The House Ways and Means Committee continues to weigh how much one-time funding to use to buy down this year’s property tax increase and whether relief will be split evenly between homestead and non-homestead properties. The Vermont Chamber is advocating for fiscal responsibility and equitable treatment to avoid shifting long-term burdens onto employers.
Liquor Liability Insurance: The House Government Operations Committee heard testimony on language that would repeal the mandatory liquor liability insurance requirement. The proposal responds to ongoing instability in the national casualty insurance market, which has driven significant premium volatility in Vermont’s small and concentrated hospitality sector. Repeal would maintain existing civil liability and regulatory safeguards while restoring regulatory proportionality during a period of market disruption.
Event Ticketing: The House Commerce and Economic Development Committee advanced H.512, legislation aimed at curbing excessive resale of event tickets and strengthening consumer protections for venues using online ticketing platforms. The bill now moves to the House Floor for further consideration.
Culinary Institute Study: The Senate Economic Development, Housing, and General Affairs Committee continued work on S.327, adding a study to explore the creation of a culinary institute in Vermont. The Vermont Chamber is a named stakeholder. The proposal aligns with broader efforts to expand workforce pipelines and support long-term talent development in the restaurant and hospitality industries.
Career and Technical Education (CTE): The House Commerce and Economic Development Committee reviewed draft legislation to reform Vermont’s CTE system in coordination with broader education changes. While timelines, funding, and governance structures remain in development, expanded access and improved alignment with graduation credits signal progress toward strengthening Vermont’s future workforce pipeline.
Family Leave: The House General and Housing Committee continued testimony on H.459, which would prohibit certain employers from counting workers’ compensation leave toward Vermont’s family and medical leave requirements. The change would require these leave systems to run sequentially rather than concurrently. Adjusting how these programs interact carries implications for job protection timelines, return-to-work planning, and staffing predictability for employers.
Health Care: The House Health Care Committee continued work on H.585, which proposes reforms to Vermont’s insurance structure, including allowing association health plans to provide additional coverage options for employers and self-employed Vermonters. Lawmakers are evaluating whether expanded plan flexibility could help stabilize markets and address affordability pressures.
Private Equity: The House Health Care Committee reviewed an updated version of H.583, which would establish a new statutory framework governing acquisitions and changes of control involving health care entities, including transactions with private equity firms. The revised bill adds additional layers of oversight, raising concerns about limiting potential solutions to Vermont’s health care challenges and increasing uncertainty for privately owned providers.
Land Use: The Senate Natural Resources and Energy Committee continued review of S.325, a bill proposing targeted updates to land use and permitting policy. The proposal would extend certain Act 250 exemption sunsets to 2030 in order to support housing development and maintain momentum on broader permitting reform timelines. The committee will continue collaborative discussions in the weeks ahead on this significant housing and development initiative.
Current Use: The House Environment Committee began discussion of H.70, which would include land enrolled in the Use Value Appraisal Program within the statutory definition of conserved land for purposes of the state’s conserved land inventory. The proposal could help Vermont advance its conservation goals while recognizing the importance of balanced, smart growth.
Rodenticides: The Vermont Chamber testified before the House Agriculture, Food Resiliency, and Forestry Committee on H.758, which would broadly ban the use of anticoagulant rodenticides commonly used by food manufacturers, restaurants, and other food-related facilities to prevent rodent infestations. The bill is expected to be amended to replace the proposed ban with a study on rodenticide alternatives.
Swipe Fees: The Senate Finance Committee reviewed S.135, which would prohibit credit card fees on the tax and gratuity portions of transactions and require retailers to accept cash for purchases under $500. The proposal has drawn renewed attention following a recent ruling in Illinois, though the committee signaled it will wait for further legal clarity before advancing the bill.
Bottle Bill: The House Environment Committee advanced H.915, proposing changes to Vermont’s beverage container redemption program. A similar version was vetoed in a prior session, and concerns remain regarding potential cost increases for the beverage industry. Significant revisions are expected as the bill moves forward.
Education: The House and Senate Education Committees continued discussions on education reform and district mapping, weighing mandatory consolidation against more limited voluntary models. As crossover approaches, advancing durable reform will require difficult, and potentially unpopular, decisions to ensure long-term quality, operational efficiency, and cost sustainability within Vermont’s education system.

February 27, 2026

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Federal Tax Policy, Vermont Choices, and the Structure of R&D Policy

February 27, 2026

Federal Tax Policy, Vermont Choices, and the Structure of R&D Policy

The House Ways and Means Committee is considering changes to how Vermont defines taxable income for businesses that invest in research and development. Vermont companies spend millions of dollars each year on R&D across advanced manufacturing, software, biotechnology, and applied research. The tax treatment of those investments directly influences capital allocation, hiring decisions, and long-term competitiveness.

The proposal contains two interdependent components that must be evaluated together. In combination, these changes could materially shape Vermont’s innovation climate, affecting how growth-stage and capital-intensive firms evaluate future investment in the state.

What the Bill Does

The draft legislation makes two significant changes.

First, it adds back federal Section 174 deductions for research and experimental expenses. That means Vermont would not allow businesses to deduct their R&D expenses when calculating state taxable income.

Unlike other areas of the tax code, such as bonus depreciation, the draft does not restore those expenses through state level amortization. As written, R&D costs would not be deductible for Vermont tax purposes.

Second, the bill increases Vermont’s R&D tax credit from 27 percent to 75 percent of the federal R&D credit. That is a substantial increase and would make Vermont’s credit one of the most generous in the country.

These two provisions must be understood together.

What This Means in Practice

There are two primary ways states can treat R&D spending.

One approach is deductibility. Businesses subtract their R&D expenses from taxable income, just like wages, rent, or other operating costs.

Another approach is relying more heavily on tax credits, which apply only to businesses that calculate and qualify for the federal R&D credit and have sufficient tax liability to use it.

Under the existing draft, Vermont would move away from deductibility and rely more heavily on the expanded credit.

For Businesses That Claim the Federal R&D Credit

Businesses that calculate and claim the federal R&D credit would see a larger Vermont credit under the proposed 75 percent rate.

However, because the deduction would no longer be allowed, the total state tax benefit may be smaller than under a system that includes both deductibility and a credit. The outcome depends on each firm’s cost structure and federal credit calculation.

For Businesses That Incur R&D Expenses but Do Not Claim the Credit

Not all businesses that invest in R&D claim the federal credit. Some may not meet the qualification thresholds. Others may not calculate it due to complexity or cost.

Under the draft language, those businesses would lose deductibility of R&D expenses and would not receive the benefit of the credit increase. For those firms, the proposal would result in higher Vermont taxable income.

For Early Stage and Growing Firms

Firms in a loss position or early growth stage often rely on deductions to build net operating losses that can offset future income.

If R&D expenses are permanently disallowed for Vermont purposes, those costs would not be recoverable at the state level, which may affect long term planning and investment decisions.

Timing Versus Permanence

A key distinction in this debate is whether Vermont intends to delay deductibility or eliminate it.

If Vermont required R&D expenses to be amortized over several years, businesses would still recover their costs over time. That is a timing adjustment.

Under the existing draft, there is no amortization restoration. As written, the policy would permanently disallow deduction of R&D expenses at the state level.

That structural difference has meaningful economic implications.

Where the Opportunity and the Risk Sit

The increase to a 75 percent R&D credit is significant. If structured correctly, it could position Vermont as a strong competitor for innovation-based investment.

The risk lies in how the deduction and credit interact. If the credit expansion is paired with preserved cost recovery, the proposal could strengthen Vermont’s competitiveness while maintaining revenue balance. If deductibility is permanently removed, the policy becomes more uneven. Some firms would benefit from the higher credit. Others would see a durable increase in state taxable income.

The Bottom Line

This proposal is not simply about increasing a tax credit. It is about how Vermont defines taxable income for businesses that invest in research and development. Understanding whether the policy preserves deductibility or permanently eliminates it is essential to evaluating its impact.

The Vermont Chamber will continue to work with lawmakers to ensure that tax policy advances affordability, predictability, and long-term competitiveness while avoiding unintended consequences for the businesses that power Vermont’s economy.

February 27, 2026

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Energy Policy: Modernization, Affordability, and Market Signals

February 27, 2026

Energy Policy: Modernization, Affordability, and Market Signals

As the Legislature approaches crossover, lawmakers are advancing several significant energy proposals. While varied in scope, each reflects a shared challenge: balancing Vermont’s climate objectives with affordability, regulatory clarity, and economic competitiveness.

Three proposals have emerged as focal points, each testing Vermont’s ability to modernize its energy framework without eroding affordability or predictability. Together, they underscore a broader question this session: how to advance climate policy while strengthening Vermont’s economic foundation.

Building Energy Standards

H.718 proposes structural updates to Vermont’s residential building energy standards framework (RBES/CBES). The bill would create a stakeholder task force to examine contractor registry updates, evaluate licensure requirements, and better align education standards across trades. It also provides clarity for builders who, in good faith, certified projects under RBES/CBES 2020 pursuant to the Governor’s Executive Order, ensuring they would be held harmless from liability.

Revisions since introduction have improved the bill’s structure and moved smaller-scale builders closer to a more stable regulatory framework. Predictability remains critical. In the Vermont Futures Project Business Climate Survey, employers consistently cite regulatory clarity as essential to housing production and workforce attraction. Housing supply, workforce growth, and energy policy remain structurally linked.

Questions remain regarding funding mechanisms and potential downstream compliance costs. As Vermont works to address its housing shortage, regulatory updates must align with administrative capacity to avoid unintended cost escalation. With crossover imminent and divisions remaining in committee, final adjustments will need to materialize quickly.

Expanding Commercial Property Assessed Clean Energy (C-PACE)

S.138 would expand Vermont’s Property Assessed Clean Energy program to commercial and industrial buildings, allowing businesses to finance efficiency, renewable, and resilience improvements through long-term, fixed-rate property assessments.

At a time when federal incentives remain uncertain, the proposal offers a voluntary, market-based pathway for businesses to invest in efficiency and resilience. In other states, C-PACE programs have reduced operating costs, attracted private capital, and supported job creation. For Vermont employers, the program represents a financing tool rather than a mandate, aligning environmental progress with economic competitiveness.

After sustained stakeholder engagement and multiple revisions, S.138 appears positioned to advance before crossover.

Net Metering

H.716 would remove the adjuster applied to energy generated behind the meter, electricity produced and consumed on-site without reaching the grid. The bill also establishes battery storage goals and directs the Public Utility Commission to account for federal incentive conditions when setting rates.

Earlier language that would have capped the negative adjuster for net-metered energy has been removed, alleviating concerns about immediate cost increases for non-solar ratepayers. However, proposed behind-the-meter and battery-related changes introduce more complex structural questions.

Adjusting this framework outside the established biennial PUC review process could add complexity to one of the most intricate net metering systems in the country. There is also risk that cost shifts could increase rates for non-net-metered customers, undermining affordability for businesses and households alike. Preserving the PUC’s research-driven review process helps ensure that rate decisions remain grounded in economic analysis.

With new language introduced late in the process and crossover near, advancement of the bill in its current form appears uncertain.

What Happens Next

As crossover approaches, compressed timelines and consequential policy choices are converging. Vermont’s long-term energy strategy must remain aligned with economic competitiveness, workforce growth, and housing development.

The central challenge is not whether Vermont advances its climate goals, but whether it does so in a way that reinforces affordability, regulatory clarity, and long-term economic durability. Striking that balance will determine whether this session’s energy reforms strengthen Vermont’s competitive position or introduce new layers of cost and complexity.

February 27, 2026

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Vermont Signature Events Award Winners Announced

February 26, 2026

Vermont Signature Events Award Winners Announced

The Vermont Chamber of Commerce and the Vermont Department of Tourism and Marketing have announced the winners for the 2026/27 Vermont Signature Events program. These signature events offer experiences that fuel the Vermont visitor economy. In 2024, visitor spending hit a record by contributing $4.2 billion to Vermont’s economy.

2026/27 Vermont Signature Events:

Hardwick State (April 17-19, 2026): For one weekend, Hardwick becomes a townwide university where community members teach and learn from one another. Anyone can be a teacher, and everybody is a student, with free or donation-based classes ranging from practical skills like tire changing and chainsaw repair to philosophy, crocheting, cake decorating, and improv comedy.

Battenkill Fly Fishing and Art Festival (April 30–May 2, 2026): Held in Arlington, this three-day festival celebrates the spring-fed Battenkill River with speakers, workshops, fly-tyers, live music, a casting competition, a beer tent, and events centered on history, aquatic life, and sustainability.

M&T Bank Vermont City Marathon & Relay Weekend (May 22–24, 2026): Vermont’s largest single-day sporting event takes over Burlington with a scenic, spectator-friendly marathon course, a sports and fitness expo, youth mini-marathons, and a lively post-race festival at Waterfront Park.

Community Concerts on the Green (May 22–September 6, 2026): In Middlesex, Camp Meade hosts free live music every Friday and Sunday from Memorial Day through Labor Day, featuring local performers, art activities, artisan studios, food, drinks, and a relaxed community atmosphere.

Naulakha Estate and Rhododendron Tour (June 5–7, 2026): Normally reserved for overnight guests, Rudyard Kipling’s historic Dummerston estate opens for self-guided tours, offering rare access to the grounds and the iconic rhododendron tunnel during peak bloom season.

Jeezum Crow Festival (July 10–11, 2026): At Jay Peak Resort, this high-energy summer music festival features national and regional acts, local food and craft vendors, and a laid-back mountain setting. Past performers include Del McCoury, Dark Star Orchestra, and Yonder Mountain String Band.

New World Festival (September 6, 2026): Downtown Randolph hosts this celebration of Celtic and Québécois traditional music and dance, with performances across five stages, street acts, called dances, kids’ activities, and food and drink from local vendors.

Puppets in the Green Mountains (September 11–20, 2026): Based in Brattleboro, this biennial international festival showcases puppet theater for all ages through performances, workshops, and forums that emphasize creativity, compassion, and storytelling.

Vermont Cheese Week (September 13–20, 2026): A statewide celebration featuring cheese-themed restaurant specials, farm tours, dinners, tastings, and special events that highlight Vermont’s award-winning cheesemakers and the landscapes behind their craft.

Cores and Pours (September 18, 2026): In Woodstock, this evening event invites visitors to explore Vermont’s small-batch cider scene with guided tastings led by a local pommelier, meet artisanal cider-makers, and enjoy local food offerings.

Rocktoberfest (September 26, 2026): Morrisville’s Portland Street transforms into a lively fall street festival with live bands, an Adirondack Chair Auction, dance performances, family activities, and food and retail vendors in a free, community-focused setting.

Vermont Circus Festival (November 1–8, 2026): Presented in Brattleboro by the New England Center for Circus Arts, this weeklong festival features circus workshops, performances, community events, and multiple shows ranging from cabaret to experimental circus.

The Vermont Signature Events program offers an invaluable opportunity for events to garner widespread recognition. Signature events are awarded annually and showcase the rich variety of experiences to be had in the Green Mountains. These top-rated events offer a true taste of all that is local, bringing visitors into the heart of communities and serving as an important component in the Vermont visitor economy.

Learn more about the Vermont Signature Events program and access the 2027/28 application here.

February 26, 2026

RECENT EVENTS NEWS

Vermont State Flag on a flag pole blowing in the wind, with the American Flag behind it.

Nominations Open for the 2026 Vermont Economic Leadership & Impact Awards

February 20, 2026

Birnn Chocolates of Vermont Named Outstanding Business of the Year

January 13, 2026

BETA Technologies team holding their Coolest Thing Made in Vermont award alongside Lieutenant Governor John Rodgers and Vermont Chamber President Amy Spear at the Vermont Manufacturing Summit.

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Nominations Open for the 2026 Vermont Economic Leadership & Impact Awards

February 20, 2026

Nominations Open for the 2026 Vermont Economic Leadership & Impact Awards

The Vermont Chamber of Commerce is accepting nominations for the Vermont Economic Leadership & Impact Awards. Each year, the Vermont Chamber recognizes individuals whose leadership and service advance Vermont’s economy and strengthen our communities. The two award categories include ‘Citizen of the Year’ and ‘Above and Beyond.’

The Citizen of the Year award recognizes an individual who:

Made major contributions to the betterment of Vermont
Been distinguished through outstanding service to the community and region
Typifies the true spirit of service and self-sacrifice in representing the finest ideals of Vermont citizenship.

The Above and Beyond Award recognizes an individual who:

Demonstrate excellence and outstanding achievement through initiative, innovation, or creative problem solving.
Reinforce and elevate the values of their organization through professionalism and dedication.
Lead with integrity, setting a high personal standard and fostering a collaborative team environment.
Go above and beyond expectations through perseverance, accountability, and commitment to results.
Make a meaningful and sustained impact on their industry by sharing knowledge and building strong professional relationships.

Prior recipients of the Citizen of the Year Award include (2025) Major General Gregory Knight, (2024) Tom Dee, and (2023) Senator Patrick Leahy.

Nominations can be submitted online here until March 1.

February 20, 2026

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Act 250 Update: Continued Progress, but Execution Risks Are Becoming Clearer

February 20, 2026

Act 250 Update: Continued Progress, but Execution Risks Are Becoming Clearer

This week’s testimony before the Senate Natural Resources Committee showed continued progress on working toward technical corrections to Act 181, the Act 250 reform adopted in 2024. But it also made clear that execution, not intent, is now the central challenge. Act 181 set an ambitious direction, encouraging housing in planned growth areas while protecting critical natural resources. Whether it succeeds will depend on whether the implementation phase delivers clarity, consistency, and confidence.

Regional planning commissions reported steady movement on Tier 1B mapping, with five commissions having submitted plans and three already receiving feedback from the Land Use Review Board. State level review of regional future land use maps is an important step. At the same time, RPCs were clear that evolving guidance and iterative feedback from the board are creating uncertainty. Regions that submitted early may be held to different standards than those submitting later, not because policy changed, but because interpretation is still developing. That inequity matters, especially when communities are being asked to make long-term planning decisions.

Tier 1B remains one of the most promising elements of Act 181. Eligibility is expected to cover roughly two to three percent of Vermont’s land area, a meaningful expansion from the approximately 0.3 percent previously eligible for downtown and village center incentives but still likely insufficient to meet the state’s housing needs. Tier 1B allows up to 50 housing units without Act 250 review in mapped growth areas. The intent is clear: give communities a real tool to support housing. The risk is that uncertainty in mapping, review standards, or timing undermines that goal.

Housing targets developed by the Vermont Housing Finance Agency and the Department of Housing and Community Development further reinforced that Vermont’s challenge is not hitting a precise unit count, but unlocking the housing market and building momentum. That requires signaling, through policy and implementation, that Vermont is open to housing in the places it has planned for growth.

Tier 3 remains the most concerning element of implementation. The Land Use Review Board described draft mapping and rulemaking focused on habitat connectors and other sensitive areas. While the board emphasized that Tier 3 is intended to be limited in scope and to avoid overlap with existing regulations, even board members acknowledged that many Vermonters do not yet understand how Tier 3 will work or whether it will apply to them. That lack of clarity is not a minor issue. It directly affects landowners, municipalities, and housing developers trying to make decisions now.

The board has asked for additional time to refine Tier 3 maps, narrow affected areas, and conduct outreach, including extending effective dates for Tier 3, the road rule, and Criterion 8C to December 31, 2027.

Tier 1A implementation raised similar red flags. Requiring municipalities to assume responsibility for administering existing Act 250 permits is a real deterrent for communities that might otherwise opt in. Testimony clarified that permits would transition gradually as they are amended, but without clear statutory guardrails, uncertainty remains. Communities need assurance that participation will not come with unmanageable administrative risk.

The Senate Natural Resources Committee appears to recognize these risks. Discussion around S.325 has focused on technical corrections that improve clarity, align timelines, and reduce unintended barriers to housing, rather than reopening last year’s policy debate.

From the Vermont Chamber’s perspective, the path forward is clear. Act 181 can work, but only if implementation prioritizes predictability, consistency, and momentum. That means clear standards from the Land Use Review Board, fair treatment of early and late adopters, realistic timelines, and a permitting system that supports housing in growth areas rather than slowing it through uncertainty.

The Vermont Chamber will continue to advocate for these corrections. It is the difference between a reform that delivers housing and economic vitality, and one that stalls under the weight of its own complexity.