Every person or entity owning or operating a telephone line or business is subject to a tax equal to 2.37 percent of net book value as of the preceding December 31 of all personal property located in Vermont used in whole or in part for conducting a telecommunications business. See 32 V.S.A. Chapter 211 § 8521-8522
Some taxpayers may be eligible to pay a “gross receipts” tax as an alternative to the telephone personal property tax. The “alternative gross receipts tax” is further discussed below.
Owning or Operating a Telephone Line or Business
Any person or entity that owns or operates a telephone line or that owns or operates a business that provides telecommunications services is subject to the telephone personal property tax. Persons or entities that provide traditional telecommunications services through a public switched telephone network (PSTN) are subject to the telephone personal property tax. Persons or entities that provide telecommunications services through mechanisms other than a PSTN, including Voice over Internet Protocol (VOIP) technology, are also subject to the telephone personal property tax.
What Property is Subject to This Tax
All personal property used in whole or in part for conducting a telecommunications business is subject to this tax, including personal property under construction, materials, and supplies. Property subject to tax as real property is not subject to the Telephone Personal Property Tax.
Net Book Value
“Net book value” of personal property means the original cost less depreciation of the property as computed for the federal income tax return required to be filed with the federal authorities for the corresponding tax year. Accelerated depreciation taken in accordance with Federal income tax law, including “bonus depreciation” under IRC § 168(k), is includable when calculating net book value.
The Alternative Gross Receipts Tax
In place of the telephone personal property tax and any income tax imposed under 32 V.S.A., Chapter 151, a person or entity owning or operating a telephone line or business may instead be eligible to elect to pay an alternative gross receipts tax. To be eligible to elect to pay the gross receipts tax, the person or entity must have received less than $50 million in annual gross operating revenues within the State in the preceding taxable year.
A person or entity that elects to pay the gross receipts tax will be taxed on its entire gross operating revenues from its operations within the State for the fiscal year ending June 30. The tax is computed as follows:
Where the gross operating revenues during the quarter:
-
exceed $250.00 and do not exceed $1,250.00, the tax shall be 2 1/4 percent;
-
exceed $1,250.00 and do not exceed $2,500.00, the tax shall be 2 1/2 percent;
-
exceed $2,500.00, and do not exceed $5,000.00, the tax shall be 2 3/4 percent;
-
exceed $5,000.00 and do not exceed $10,000.00, the tax shall be 3 percent; and
-
the rate of tax shall be increased 1/4 of 1 percent for each additional $5,000.00 or fractional part thereof of such gross operating revenue. However, the rate shall in no event exceed 5 1/4 percent of the gross operating revenues.
Taxpayers who elect to file on gross receipts under 32 V.S.A., Subchapter 6, § 8522(b) must file form TGR-652 and pay the applicable tax to the Commissioner of Taxes no later than 25 days following the last day of the third, sixth, ninth, and twelfth month of each taxable year.
How to File
Online: Taxpayers may file returns and pay tax due using myVTax, our free, secure online filing site. If you have any questions, contact us at (802) 828-2551 or tax.business@vermont.gov.
Paper Returns: You may still use the paper forms if If you cannot file and pay through myVTax.