Legislative Update

2021 Legislative Update

The Department of Taxes has published its annual Legislative Highlights, summarizing the legislative initiatives that the Department followed closely and which became law this session.

This year’s updates to Vermont tax law include:

Annual link up to federal statutes, including COVID-19 relief

  • Sec. 23 updates the date of conformity of Vermont income tax laws to federal statutes in effect on March 31, 2021, capturing the American Rescue Plan Act changes applicable to tax year 2021.
  • Sec. 24 clarifies that Vermont conformity to federal statutes regarding estate and gift taxes in effect on December 31, 2020, will continue to be the law until amended.
  • Sec. 25 repeals legislation passed in Act 9 (2021) Sec. 23c which would have included payroll protection program (PPP) loans forgiven in 2021 as taxable income, had the Vermont legislature chosen not to act otherwise. As a result, forgiven PPP loans are not taxable in Vermont.

To read more, please click here.

Meals and Rooms Tax

  • Defines “Taxable meal facilitator” as an entity that “facilitates the sale and collects the charge for a taxable meal or alcoholic beverage through an Internet transaction or any other means.”
  •  Includes “taxable meal facilitators” under the definition of “operator,” making them liable for collection and remittance of meals tax.
  • Clarifies that the Meals Tax is applied when a meal delivery platform delivers meals to consumers, and to any delivery or other facilitator charge.
  • Effective August 1, 2021.

To read more, please click here.

Sales and Use Tax

Electric bicycles

  • Clarifies that an “electric bicycle” as defined is not a motor vehicle and shall be governed under Vermont law as a bicycle, including that electric bicycles shall be subject to Sales and Use Tax, not Purchase and Use Tax.
  • Effective July 1, 2021.

Feminine hygiene products

  • Exempts feminine hygiene products used in connection with the human menstrual cycle from Sales and Use Tax.
  • Effective July 1, 2021.

Wood pellets sold at retail for residential use

  • Clarifies that wood pellets sold to an individual on a vendor’s premises or delivered to a residence shall be presumed to be purchased for residential use and shall be exempt from Sales and Use Tax.
  • Clarifies that a certificate of exemption shall not be required for exempt retail sales of wood pellets to an individual.
  • Effective July 1, 2021.

To read more, please click here

Alcoholic beverages

  • Amends definitions of taxable meal and alcoholic beverages to exempt alcoholic beverages from tax when sold under the same circumstances where food or beverage is exempt.
  • Effective retroactively to April 1, 2021.

To read more, please click here

Property Tax

To read the legislative update on property tax Part I, please click here. To read Part II, please click here

With offices in Williston and Rutland Vermont, Davis & Hodgdon Advisory Group has served business owners and individuals for more than 30 years by providing progressive, proactive tax and business services through expert staff, high-end technology, and unparalleled efficiency. Contact us today.

Resource: Vermont Department of Taxes, 2021 Legislative Highlights

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