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 31st of all personal property located in Vermont, used in whole or in part for conducting a telecommunications business. The applicable law is located at Vermont Statutes Title 32, Section 8521.
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.
Beginning January 1, 2017, Telephone Personal Property Tax is paid monthly, with a payment due on the 25th day of each month of the calendar year. For example, a monthly payment is due January 25 for the personal property valuated as of December 31. For the first two months of each year, make estimated payments, with a reconciliation and any additional payments due with the annual return.
In order to avoid an underpayment of your estimated tax, which may result in penalty and interest charges, your estimated monthly payments for each of the first two months of the calendar year must either be equal to:
- One-twelfth (1/12th) of 100% of the tax due for the previous year’s tax; or
- One-twelfth (1/12th) of 90% of the year’s actual tax liability.
The Alternative Gross Receipts Tax
In lieu 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
If you cannot file and pay through myVTax, you may still use the paper forms.
|TGR-652||Telephone Gross Receipts Tax Return|
|TPP-650||File using myVTax||Telephone Personal Property Tax Payment Voucher|
|TPP-651||Telephone Personal Property Tax Return and Schedule|
|TPP-653||Telephone Personal Property Schedule|
The Telephone Personal Property Tax returns and monthly installment payments of the taxes are due the 25th day of each month of the calendar year following the valuation date. The Telephone Gross Receipts Tax return and tax are due April 25, July 25, October 25 and January 25 of the following year. Telephone Personal Property Tax Return and Schedule, with instructions is due March 25.
|Telephone Personal Property Tax|
|Twelve Monthly Installments|
|12/26/2022||12th Monthly Payment|
|1/25/2023||1st Monthly Estimated Payment|
|2/27/2023||2nd Monthly Estimated Payment|
|3/27/2023||Return and Reconciled 3rd Monthly Payment for the first three months of 2022|
|4/25/2023||4th Monthly Payment|
|5/25/2023||5th Monthly Payment|
|6/27/2023||6th Monthly Payment|
|7/25/2023||7th Monthly Payment|
|8/25/2023||8th Monthly Payment|
|9/25/2023||9th Monthly Payment|
|10/25/2023||10th Monthly Payment|
|11/27/2023||11th Monthly Payment|
|12/26/2023||12th Monthly Payment|
|1/25/2024||1st Monthly Estimated Payment (Tax Year 2023)|
|Telephone Gross Receipts Tax|
|Tax Period Ending||Due Date|