Amy Spear

• H.437 Manufacturing Tax Exemption: The Senate Finance Committee discussed H.437 which contains the Manufacturing Tax Exemption Extension, an important tax modernization proposal for manufacturers. An amendment to the bill was proposed to create a vacant residence property tax surcharge which would charge a 1% surcharge on the portion of the equalized education property value of a vacant residence that exceeds $400,000. The committee will take testimony on this amendment next week.
• S.226 Omnibus Housing Bill: Both the House Natural Resources, Fish, & Wildlife Committee and the House General, Housing, and Military Affairs Committee continued to take testimony on the three bills containing proposals that would create new housing supply opportunities; S.210, S.226, S.234. There is a great deal of work ahead for the committees to untangle the duplicative language between them and determine how best to restructure these three bills to move critical housing priorities forward.

For several months, the Vermont Chamber and Vermont Independent Restaurants (VTIR) have advocated for replenishment of the Restaurant Revitalization Fund, which was depleted before most of the Vermont restaurants that applied could receive the funding they desperately needed. With 581 Vermont restaurants shouldering over $120 million in unmet need, restaurant operators appealed directly to the offices of Senator Leahy and Senator Sanders, and the Vermont Chamber has been in close communication with Congressman Welch’s office.

This week, those efforts are paying off, with the announcement of a small business relief package originating in the House. The bill includes $42 billion for RRF replenishment as well as $13 billion for businesses across all industries and sectors that were hardest hit by the pandemic but not eligible for other relief funding. Congressman Welch held a press conference to announce the bill, with the Vermont Chamber and Sue Bette of VTIR making remarks thanking the Congressman for his stalwart support and urging swift passage of the bill. The House passed the bill on Thursday, and there is word of a bipartisan coalition forming in the Senate to support it. The Senate will take the bill up after returning from the Easter recess, likely the last week of April.

The House Committee on General, Housing and Military Affairs continued work on S.210, a bill containing a number of items aimed at improving rental housing health and safety. A long-time advocate for equity in the lodging landscape, the Vermont Chamber testified in support of a mechanism that would collect basic contact information for short-term rental (STR) operators providing overnight accommodations to the traveling public.

While short-term rentals contribute positively to Vermont’s economy, they operate in a relatively unregulated environment. For example, licensed lodging properties are required to post licenses and evacuation route diagrams in an obvious location, and to have inspected portable fire extinguishers. By comparison, short-term rentals simply have a self-attestation that is retained onsite and have no evacuation route or fire extinguisher requirements. While there are good hosts in the short-term rental industry that go above and beyond baseline health and safety measures, creating or enhancing these measures should not be withheld because there are good players within an industry. Public health and safety measures are meant to ensure a safe rental environment for all and to protect the traveling public.

This is a policy issue that is not unique to Vermont. Rhode Island has created a new statewide mandatory registration program for STRs listed for rent with hosting platforms. The foundation set by collecting basic STR information would be a positive step forward to ensure a safe rental environment and move towards equity in the lodging marketplace.

The Vermont Chamber testified before the Senate Finance Committee on a proposal to remove a tax exemption on software as a service and create a tax on platform and infrastructure as a service. If passed this would levy a new estimated $20 million sales tax burden carried largely by the business community.

In a year when the State is experiencing a revenue surplus, the Vermont Chamber questioned why the Legislature would consider adding a tax to businesses struggling with a workforce shortage, 7% inflation, and endless supply chain issues. The tax would impact Vermont’s ability to recruit and scale technology businesses and would increase operating costs for virtually every business in Vermont. Please contact Vermont Chamber Vice President of Government Affairs Megan Sullivan if you have questions or would like help providing your input to the Legislature.

• H.715 Clean Heat Standard: The House passed the Clean Heat Standard (H.715) by a vote of 96 to 44. If the Senate passes H.715 with a two-thirds majority, the measure could become law even if Governor Scott issues a veto. An effort by Rep. Harrison, Rep. Fagan and Rep. Murphy to require the Legislature to review the program design before it is implemented failed by a vote of 44 to 96. Learn more at https://www.vermontfuel.com/chs/.
• H.329 Discrimination: This bill has stalled in the House General, Housing, and Military Affairs Committee after receiving testimony on the impact this would have in school settings. New bill language has been proposed, but missed crossover. It will need to be incorporated into a bill previously passed by the Senate in order to pass this biennium.
• H.730 Liquor Law Modernization: The bill was passed favorably out of the House Ways and Means Committee with amendment and will now move to the House floor. If enacted, both fortified wines and low alcohol spirit-based beverages (known as ready-to-drink cocktails) would be permitted to be sold via retail outlets and beverage wholesalers, providing greater access to products for both licensees and consumers. The bill also contains several other modernization provisions and technical changes put forward by the Administration.
• S.53 Corporate Income Tax and Military Pensions: The bill was passed favorably by the Senate and will now be reviewed by a conference committee of House and Senate members. The House and Senate committees of jurisdiction took drastically different approaches to changes in the corporate income tax modernization proposals and reconciliation between these two bodies may be challenging.