July 31, 2018
 
2018 Tax Changes July
2018 Legislative Highlights
  
The 2018 legislative highlights have been posted to the Department website. The page lists the significant tax law changes passed during the regular and special sessions.

Note: The Department is working on a guide on 2018 legislative updates for tax practitioners. We will be sending the guide to you soon via this newsletter, VTax Connect.  
2018 Legislative Highlights highlights
Social Security Exemption
Act 11, passed during the 2018 Special Session, creates a personal income tax exemption for Social Security beneficiaries below certain income thresholds. The law takes effect in calendar year 2018 for tax returns filed in 2019. 

Short-Term Rentals  
Renting a room with a view? A law passed by the Vermont legislature this session has created new advertising requirement for owners of short-term rentals, beginning July 1, 2018. For example, they must include their Vermont Meals and Rooms Tax license number in their advertisements. Learn more about this and other requirements.

Sales tax exemption on advanced wood boilers
Beginning July 1, 2018, sales of advanced wood boilers are exempt from Vermont Sales and Use Tax. We have added a section on these boilers to the Exemptions page on our website.
Remote Vendors and Sales Tax wayfair
Out-of-state vendors must collect Vermont Sales Tax

The recent Supreme Court decision in Wayfair v. South Dakota has made the out-of-state vendor provisions of Act 134 of 2016 effective. Certain out-of-state vendors are now required to register with the State of Vermont and collect and remit sales tax beginning July 1, 2018. Learn more .
Public Hearing Scheduled hearing
Request for Public Comments
 
The Vermont Department of Taxes has drafted revisions to its Sales and Use Tax Regulations and its Organization and Rules of Procedure and invites you to review and comment on the revisions. The revisions are available on our Public Comments page. The deadline for comments is Sep. 10, 2018. The contact information for comments is on the website. 
 
There is a hearing scheduled for the revised regulations on Aug. 30, 2018, at 9:00 a.m., at 133 State Street, 4th Floor, Montpelier, Vermont. Attendees must check in at the first floor tax window before going to the fourth floor.  
Income Tax Refund May Go to Estimated Tax EstimatedTax
Income tax refund for a self-employed person may go toward estimated tax  

If a small business owner or self-employed person pays taxes via a Vermont personal income tax return, an overpayment for 2017 may be applied toward the 2018 period and will count toward his or her quarterly estimated payment. This works the same way for anyone that is required to make quarterly estimated payments. A current year overpayment may be applied to the following year and count toward the first quarterly payment even if the return is filed on extension. A personal income tax refund cannot be applied toward a business tax account.
Fraud Awareness Poster fooled 
Fraud awareness campaign  

The Vermont Department of Taxes, together with the Office of the Vermont Attorney General, launched the "Don't Be Fooled" campaign in April. The campaign features a poster that aims to prevent ID theft and tax scams by educating people on how to avoid becoming a victim. We invite you to include a link to the poster in your client communications.  
Property Transfer Tax Return ReminderPTTR
A Property Transfer Tax Return (PTTR) may include more than one deed

When a single property transfer involves more than one deed, all deeds involved in the transfer may be recorded on the same PTTR. A town clerk cannot record any deed unless accompanied by a completed PTTR. If two or more non-contiguous parcels are being transferred, use the value and category of the parcel with the homestead or the largest parcel when filling out the PTTR. If the transfer includes parcels in more than one town, send a PTTR to each town clerk.
New Online Business CenterOBC
Find the business help you need in one place

Whether you are starting a new business or nonprofit in Vermont or have been in business for a while, be sure to check out our new online Business Center. Here are the topics we cover:
  • Starting a new business
  • The new owner of an existing business
  • Self-employed person
  • Hiring employees
  • Selling a product (tangible personal property)
  • Selling a meal or renting a room
  • Selling alcoholic beverages
  • Updating a business
  • Closing a business 
New Compliance Corner on Website compliance

Compliance Corner launches

 

Using examples drawn from actual cases, the Compliance Corner describes the current work the Department is doing to collect the right amount of tax from businesses and individual taxpayers. 

Disaster AssistanceDisaster
Disaster and casualty losses may be deductible
You may be able to deduct disaster and casualty losses relating to your home or business on your federal income tax return. Before you begin your income tax return, learn what criteria you must meet.

Out-of-state businesses and employees responding to a Vermont disaster or emergency
If you are a business not registered with Vermont but are coming to Vermont to help with disaster recovery efforts or an emergency, you should know about what state taxes to pay---- and which taxes you don't need to pay.
 
Read our new section on Disaster Assistance  to learn more about these topics.
Local Option Tax ChangesLOT
Important information on local option tax changes in Killington and Barre City

Killington
Effective July 1, 2018, and after, Local Option Tax (LOT) sales tax  is no longer collectible in Killington. Any Killington LOT collected after this date must either be returned directly to the customer or paid to the Vermont Department of Taxes. Please note that LOT for Killington's meals and rooms remains in effect.

Barre City
Effective Oct. 1, 2018, the City of Barre will collect LOT meals and rooms tax, including alcoholic beverages served for immediate consumption. Merchants located or doing business in the City of Barre or merchants delivering there must begin collecting the additional 1% tax from customers and remitting the tax to the Vermont Department of Taxes.

For information about Local Option Tax, see our website and fact sheet.

New Fact Sheetsfactsheets
Sales and use tax guide for automotive repair shops and related industries
See the new guide, Vermont Sales and Use Tax Guide for Automotive Parts and Supplies. The fact sheet clarifies existing regulation. It also describes a change in how the Department interprets regulation on parts and supplies incorporated into a vehicle that is being reconditioned for resale. This change will take effect July 1, 2019. The guide also applies to other vehicle types, including motorcycles, boats, and snowmobiles.
    
Sales and use tax fact sheet for renewable energy
The fact sheet, Vermont Sales and Use Tax Applied on Renewable Energy Generation Facilities, discusses the sales and use tax exemption for equipment used in manufacturing as it relates to facilities that manufacture and sell electricity. It also explains sales and use tax exemptions that apply to home and business energy generation systems.

Fact sheet outlines taxation of fuels
The new fact sheet, Taxation of Fuels, explains which specific fuels are taxed or exempt based on their type and use. As of July 1, 2017, clear or undyed diesel fuel is exempt from sales tax when used in certain types of forestry equipment. Furthermore, in 2016 the legislature changed how heating fuel for residential or commercial use is taxed. Tax is now imposed on each gallon sold, instead of on the seller's gross receipts.

See a complete list of fact sheets, guides and infographics on our website. 
Meals and Rooms Tax Update  TB48
Technical Bulletin on Meals and Rooms Tax revised

Technical Bulletin TB-48, Application of Meals and Room Tax for Meals and Room Charges at a School or College, has been revised to clarify the treatment of meals served on campuses for both school-sponsored and private events. It also provides a clarification on the exemption in the rooms and meals tax statute, 32 V.S.A. ยง 9202(10)(D).   
Current Use Deadlines Ahead CurrentUse
Current Use enrollment applications are due every September 1

If you wish to enroll in the Current Use Program for 2019, your application is due to the Division of Property Valuation and Review at the Department of Taxes by Sep. 1.
  
As of 2017, the due date is Nov. 1 for landowners with agricultural lands and farm buildings already enrolled in Current Use to submit their annual agricultural certifications.   
Forest Management Activity Report Revised FMAR
New Forest Management Activity Report forms

On July 1, 2018, the Vermont Department of Taxes issued a new form, FMR-318, Forest Management Activity Report (FMAR), along with two supplementary forms. The new form replaces Form LU-FMAR.

You may begin using the new FMAR form after July 1, 2018. We will continue to accept the old form for any activity that has occurred in 2018, but we will not accept the old form for any activity occurring in 2019.

To obtain the most current, updated form, please always download FMAR forms from the Department of Taxes website.
  • FMR-318, Use Value Appraisal Program: Forest Management Activity Report
  • FMR-318, Instructions, Use Value Appraisal Program: Forest Management Activity Report
  • FMR-319, Additional Owners for Forest Management Activity Report
  • FMR-320, Additional Activity for Forest Management Activity Report
Beginning July 1, 2018, FMAR forms must be submitted to the Department of Taxes. Do not submit forms to the Department of Forests, Parks and Recreation.

Mail or hand deliver the forms to: Vermont Department of Taxes, 133 State Street, Montpelier VT 05633-1401.

If you have questions about the new forms or the Forest Management Activity Report, please contact your county forester.
Contact Us When You Have a Question  ContactUs
Tax practitioners 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 to Friday, 7:45 a.m. to 4:30 p.m.
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