June 28, 2019
In this Issue 
Legislative Highlights legislative  
The Vermont Department of Taxes has published the 2019 Legislative Highlights. We have expanded on some of this year's changes below.
529 Plan Disbursements Only for Post-Secondary vheip
Vermont restricts use of VHEIP withdrawals
Funds invested in Vermont's 529 savings plan, also known as the Vermont Higher Education Investment Plan (VHEIP), may only be used for costs of attendance at approved post-secondary educational institutions. The new rule in Act 51, Sec. 16 takes effect retroactively to Jan. 1, 2019. It differs from federal law, which expanded the use of 529 plans under the Tax Cuts and Jobs Act of 2017. Vermont will require taxpayers who received a tax credit and used VHEIP savings toward non-qualified expenses in 2019 and thereafter to repay 10% of the non-qualified disbursement to the state, up to a maximum of the total Vermont credits received by the taxpayer.    
Tobacco Tax Expanded tobacco
E-cigarettes to be taxed at wholesale
Effective July 1, 2019, electronic cigarettes and paraphernalia are taxed the same as tobacco and cigars at 92% of the wholesale price. Only licensed wholesale dealers are allowed to sell e-cigarettes to retailers doing business in Vermont. The tax is collected by licensed wholesale dealers from retailers at purchase. The law also prohibits online sales of e-cigarettes to Vermont customers. See our Miscellaneous Tax page for complete information.
Marketplace Facilitators Must Collect Tax marketplace
Definition of "vendor" is expanded
Out-of-state vendors, such as marketplace facilitators and marketplace sellers with retail sales into Vermont, must collect and remit sales tax on purchases and services sold in their marketplaces. Act 46, Sec. 3 became effective June 1, making July 25, 2019, the first due date for filing and payment. For more information, including the definitions of "marketplace facilitator" and "marketplace seller," as well as the parameters which trigger the registration, collection, and remittance requirements, please visit our website.
Forestry Machinery Exemptionforestry
More forestry machinery is exempt from sales and use tax
Vermont's Sales and Use Tax exemption on certain forestry machinery and repair parts has been expanded. The exemption now includes traction enhancement accessories, tire chains, track systems, and winch cables. Because these accessories are used exclusively with the exempt machinery, a Form S-3W is not required, though some retailers may ask for it. Our
fact sheet contains the complete list of exempted equipment. 
Good News for Automotive Dealersauto
Sales tax exemption expands for auto dealers
Beginning July 1, 2019, auto dealers may take an exemption on auto parts purchased to recondition a used motor vehicle the dealer owns and has in its inventory for resale. Under the law, the seller must be registered by the Vermont Department of Motor Vehicles as a dealer. Further, the parts being installed must be itemized on the bill and Vermont Sales Tax collected from the customer. The Vermont Department of Taxes will not be auditing dealerships for any previous noncompliance.
Capital Gains Exclusioncapgains
New cap on capital gains exclusion
The existing 40% exclusion for capital gains will be capped at $350,000 under Act 71, Sec. 1, effective July 1, 2019. This means that any gain above $875,000 will be taxed at standard income tax rates. Taxpayers who are considering a sale of a large capital asset may want to consult a tax preparer for guidance as soon as possible. 
New guidance is available on our website. See the press release.  
Purchase of Real Estate Controlling Interestrealestate
Purchase of controlling interest in real estate will trigger PTT
Under current law, the Property Transfer Tax only applies to the transfer of ownership of real estate (real property) by deed. Under Act 71, Sec. 9, effective July 1, 2019, the purchase of a controlling interest in an entity holding title to real property in the state of Vermont will trigger a property transfer tax liability. Generally, a controlling interest means 50% or more of stock, capital, profits or beneficial interest in an entity. The tax due from the purchaser is calculated based on the fair market value of the property. See the press release and website. 
Taxation of Solar Plantssolar
What to do when multiple solar-generating facilities are connected  
The Public Utility Commission (PUC) considers a group of solar-generating facilities using common infrastructure to be one "plant." For tax purposes, this means that one Form SCT-603, Solar Energy Capacity Tax, must be filed if a group of facilities uses common infrastructure, such as roads, control facilities, and connections to the grid, and the PUC does not find them to be separate plants. Form SCT-603 should be completed based on the total capacity of the connected facilities. See the fact sheet, Taxation of Solar Plants.  
Now on the Industry Guidance Pageindustry
What is taxable and exempt in the agriculture industry   
The Agriculture page has information about Vermont Sales and Use Tax exemptions for compost, electricity and fuel, agricultural machinery, and more.   
Selling hemp and CBD? Be sure you are collecting the right taxes  
Hemp and cannabidiol (CBD) products derived from hemp may be legally sold in Vermont. Vermont businesses exploring the possibility of selling hemp and CBD products or businesses already selling these products must know what is taxable and what is exempt from tax. See the guidance on our website.  
New Format for Property Tax Billsproperty
Vermont property tax bills look different this year, and here's why
Vermont property tax bills were redesigned to make it easier to find information. Bills issued by towns will now itemize the municipal and education tax rates. Our new guide, How to Understand a Property Tax Bill, shows where to find information such as the SPAN school code and Property Tax Credit. The guide is also available as a page on our website
Landlord Certificate Bulk Uploads Now Possible landlords
Landlords: use bulk upload when filing the Landlord Certificate
If you are landlord and have a large number of rental units, you may file the LC-142, Landlord Certificate, in myVTax using bulk upload. Read our guide and use the template (Excel spreadsheet) for quick and easy filing. For more information on how to complete the the Landlord Certificate, see our fact sheet.  
Website User Survey survey
Website Improvement Survey Reminder 
Did you receive our recent survey email? If you haven't already done so, please take a moment to complete the survey, linked below. Your professional experience will guide us as we make improvements to the Department's website, tax.vermont.gov, over the coming months.
The survey asks 20 questions and will only take you eight minutes to complete. All responses are confidential. 
We're on Social Media socmed
Looking for the latest Vermont tax news?
Follow the Vermont Department of Taxes on Facebook and Twitter!
Contact Us When You Have a Question  ContactUs
Tax professionals with questions can reach the Department of Taxes at the 802-828-6815, or by emailing tax.preparer@vermont.gov. This special phone number for professional preparers is answered Monday-Friday 7:45AM-4:30PM.
Would Your Colleagues Benefit from Our Newsletter?
If you have colleagues who would be interested in the content of Department newsletters, please let them know how to sign up by sharing this link