2020 Legislative Highlights

Education Property Tax

Setting the yield for education property tax, Act 122 (H.959)

• Establishes the statewide education property tax yields and nonhomestead rate for fiscal year 2021.
• Allows the Education Fund to incur a deficit.
• Returns fiscal year 2019 and 2020 education property tax overpayments to certain school districts in fiscal year 2021.
• Effective July 1, 2020.

Instructions concerning property tax rates in the Commissioner of Taxes’ December 1 letter, Act 154 (H.969), Sec. E.111.1

• Recommendations are intended to:
  • Relieve school boards of the responsibility for responding to a projected FY21 deficit through budgeting decisions for FY22;
  • Prevent a significant increase in property tax rates in 2021; and,
  • Allow time and opportunities for the General Assembly to use other methods to address the deficit.
• Instructs the Commissioner to calculate the recommended estimated property tax rates for 2021 by:
  • Disregarding the projected deficit in the Education Fund; and,
  • Assuming the stabilization reserve is maintained for fiscal year 2022 at the fiscal year 2021 amount.

Temporary municipal tax rate provisions in response to COVID-19, Act 102 (S.344)

• During the COVID-19 state of emergency, a municipality's legislative body may:
  • Establish a new time and method of payment for property taxes collected by the municipality.
  • Establish a grace period, waive penalties.
  • Reduce the municipal property tax rate.

Sections of the Miscellaneous Tax bill effecting Education Property Taxes, Act 175 (H.954)

• Sec. 1 allows one additional day for towns to make corrections to the grand list (through December 31).
• Sec. 2 allows towns to request an extension for filing the grand list with the State without having to record the extension with the clerk.
• Sec. 3 requires towns to segregate funds received from the State for preparing the education grand list.
• Sec. 4 requires the Department (in consultation with other interested parties) to submit a report to the Legislature by February 1, 2021 regarding transitioning billing and collection of the education property tax from municipalities to the Department.
• Sec. 5 amends the definition of “owner” for current use to align with the general rule for property taxation.
• Sec. 6 increases per diem pay for property tax hearing officers to $150 per day.

Renter Rebate

Reforming the Renter Rebate Program, Act 160 (H.934)

• The name of the Renter Rebate shall be changed to Renter Credit.
• Rent shall be based on the monthly fair market rent for the area in which the claimant resides, as determined by the U.S. Department of Housing and Urban Development.
• Although a claimant is required to have been domiciled in Vermont during the entire taxable year, the claimant is required to have rented the specific property for which a credit is requested during at least six calendar months in a taxable year, with exception for claimants receiving a rental subsidy.
  • Credit shall be prorated by the number of calendar months during which claimant rented the property.
  • Months may be non-consecutive.
• More than one renter per household may be entitled to a credit.
• Credit shall be based on the claimant’s income.
• Credit shall be calculated based on other factors that may include:
  • Number of bedrooms; and,
  • Number of personal exemptions claimed by the claimant.
• Credit shall not exceed $2,500 per year.
• Claimant is no longer required to obtain a Landlord Certificate from the landlord.
  • Landlords are required submit a certificate of rent to the Department on or before January 31 of each year.
• Effective date: January 1, 2021. This shall apply to claims filed in 2022 and after.

Use Value Appraisals (Current Use Program)

Definition of Housesite, Act 158 (H.674), Sec. 1

• For the purposes of enrollment in the Current Use program, the new definition of “housesite” specifies that more than one dwelling may share the same housesite, provided the dwellings are contained within a two-acre area.
• Effective January 1, 2021.

Good standing requirement for enrollees, Act 158 (H.674), Sec. 2

• Enrollees in the Current Use program must be in good standing with the Department.
• Effective January 1, 2021.

Regulation and taxation of cannabis and the impact on Current Use, Act 164 (S.54), Sec. 12

• Sec. 12 states that cannabis establishments shall not be regulated as farming under the Required Agricultural Practices. Also, although cannabis products and crops shall not be considered agricultural products or crops, agricultural land and buildings shall not be ineligible for Current Use because they are used to grow or process cannabis. Other requirements apply. Effective March 1, 2022.