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Committees Disagree Over Corporate Tax Restructuring and Military Pension Tax Exemption
The House Ways and Means Committee unanimously approved the motion not to concur with the Senate Finance Committee’s amendment to S.53, including the stripped down corporate tax changes, impactful adjustments to the military pension tax exemption, and removal of the House supported cloud tax.
Under debate in the corporate income tax restructuring were the proposal to move to a single sales factor and a new graduated corporate minimum rate. Single sales factor would reduce corporate income taxes for corporations with a larger physical presence in Vermont by only factoring in sales in Vermont and not payroll, and property. The corporate minimum proposal would move Vermont to a scale of $250-$100,000, a decrease for the smallest companies and a dramatic increase for larger businesses from what exists today. The House version includes both proposals while the Senate version excludes them both.
The House proposal on Military Pensions would exclude the first $10,000 of federally taxable U.S. military retirement pay. This was changed in the Senate proposal, in which the military retiree, once eligible for social security, would need to choose between exempting their military pension or social security (one or the other, not both).
This bill will now move to a conference committee of Senate Finance members and House Ways and Means members to see if a compromise can be worked out. The Vermont Chamber will continue to advocate for a full exemption to incentivize military retirees to either stay or move to Vermont and increase the diversity of our communities.
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