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.    

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.

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.

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. 

Sales tax exemption expands for auto dealers

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.  

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. 

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.  

What is taxable and exempt in the agriculture industry   

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. 

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.  

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