Taxes Archives - Vermont Chamber of Commerce

Vermont Chamber Advocates for Economic Growth and Housing Solutions

January 17, 2025January 17, 2025

Vermont Chamber Advocates for Economic Growth and Housing Solutions

The Vermont Chamber advocacy team engaged with both House and Senate committees to outline priorities aimed at fortifying Vermont’s economy. Discussions centered on housing affordability, workforce challenges, regulatory reforms, technology, and positioning Vermont as a premier relocation destination.

Tourism and manufacturing were highlighted as economic pillars, each contributing $3 billion annually and employing thousands of Vermonters. The Chamber’s Foundation, the Vermont Futures Project, was spotlighted for its focus on long-term economic planning, ensuring these critical sectors continue to drive statewide prosperity.

Housing availability and affordability took center stage as a pressing concern. The Chamber will continue advocating for meaningful reforms to reduce construction costs, improve infrastructure, and expand access, emphasizing the importance of addressing Vermont’s demographic challenges and workforce gaps to sustain economic vitality.

The Chamber emphasized the integral connection between business growth and wage growth, presenting data that reinforces the need for collaborative efforts to support businesses. Economic development remains a priority for the Vermont Chamber, and the team is poised to work alongside lawmakers to ensure businesses have the resources and environment necessary to thrive.

To bolster advocacy efforts surrounding technology issues, the Vermont Chamber introduced attorney Josh Diamond from Dinse, who the Chamber has hired on retainer. With his extensive legal expertise and six years of experience as Vermont’s Deputy Attorney General, Josh will provide critical insights and representation for Vermont’s business community on emerging technology challenges.

The team will do additional introductions next week and will dive into expert testimony on legislation. Through proactive collaboration with lawmakers, stakeholders, and industry leaders, the Vermont Chamber continues to champion policies that advance Vermont’s economy and enhance quality of life for all.

January 17, 2025

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Laying the Groundwork for Education Finance Reform

January 17, 2025

Laying the Groundwork for Education Finance Reform

Legislative committees discussed Vermont’s education finance system this week, emphasizing the complex ties between funding, governance, and education quality, and the need for reforms both to address these challenges and tackle high costs head on. While awaiting the Governor’s proposed education finance reforms in the January 28 budget address, House and Senate committees reviewed the current funding system, its formula, and potential improvements.

Elements of the Governor’s proposal were previewed by members of his administration and included simplifying tax structures, recalibrating the Common Level of Appraisal, and ensuring taxpayer capacity aligns with funding obligations. Testimonies from the Department of Taxes and the Agency of Education also emphasized the need for a more streamlined and transparent system. Proposals for statewide teacher contracts and construction aid policies further underscored the need for cohesive, statewide strategies that will reduce costs and increase affordability.

One proposed funding formula, informed by models from states like Massachusetts and Maine, aims to establish a base funding amount per student, with adjustments for factors like school size, cost of living, and student needs. Legislators discussed implementing the formula in Vermont, focusing on the base amount, property taxes, and teacher compensation.

Continued, focused dialogue among the legislature, educational leaders, and other stakeholders will be a priority this session. Addressing the large-scale systemic issues is crucial to reforming Vermont’s education system to ensure both affordability and sustainability.

January 17, 2025

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Governor Phil Scott’s Inaugural Speech Echoes Vermont Chamber’s Priorities

January 10, 2025

Governor Phil Scott's Inaugural Speech Echoes Vermont Chamber’s Priorities

Governor Phil Scott’s inaugural address delivered a clear call to action on the most pressing challenges, including affordability, housing, education reform, and workforce sustainability. These priorities reflect significant overlap with the Vermont Chamber of Commerce’s ongoing advocacy efforts, emphasizing shared goals to strengthen Vermont’s economy and improve the quality of life for its residents. Keeping affordability and Vermont’s challenging demographics at the forefront, the address focused on:

Affordability and economic growth
Addressing the housing crisis
Student-centered education reforms
Moving forward together

Affordability and Economic Growth
A central theme of Governor Scott’s speech was Vermont’s need to tackle its affordability crisis. He noted the state’s reputation as a high-tax destination and emphasized that Vermont cannot afford to lose more residents due to rising costs. A vision of achieving affordability through economic growth rather than tax increases aligns with the Vermont Chamber’s emphasis on fostering business resilience and attracting new residents. Both aim to reduce the financial burdens facing Vermont’s families and businesses while expanding economic opportunities.

The Governor’s message of bolstering opportunities for working Vermonters and supporting local communities parallels the Chamber’s push for innovative workforce development solutions. Efforts to promote Vermont as a destination for skilled workers and investing in community development directly impact the other challenges facing Vermont. The economic impact of a shrinking workforce remains a key focus for the Vermont Futures Project, which continues to highlight the issue and provide valuable data to support solutions.

Housing: A Shared Priority
The Vermont Chamber has long advocated for increased housing supply by addressing root causes and barriers to development. Governor Scott echoed this urgent need, calling for the construction of 8,000 new homes annually—a figure Vermont is far from achieving. The speech advocated for treating housing development as an emergency by streamlining regulatory barriers, investing in infrastructure, and revitalizing workforce. Affordable housing for all incomes is critical to retaining employees, attracting new talent, and fostering economic growth.

Education: Tackling Costs and Improving Outcomes for Students
The Governor delivered a pointed critique of Vermont’s current education funding model, highlighting dramatic cost increases that outpace the value delivered. With the current expected 5.9% increase this year, property taxes will have increased by 33% over three years, a trend further compounded by increases in education-related revenue sources, many of which depend on taxes collected and remitted by the business community. These include 100% of sales tax revenue, one-third of purchase and use tax revenue, one-quarter of rooms and meals tax revenue, 100% of the new short-term rental surcharge, as well as lottery funds and general fund transfers. Despite these escalating costs, Vermont serves only 80,300 students across an “out of scale” education system with high administrative overhead and small class sizes.

Scott pledged to introduce a multi-year plan to overhaul the system focusing on a student-centered funding formula and a more efficient governance structure. This proposal includes streamlining administrative costs, rethinking local school board responsibilities, and implementing guardrails to ensure fiscal discipline. By addressing these systemic inefficiencies, the Governor aims to contain costs while improving outcomes—both of which are essential to Vermont’s economic future.
This approach complements the Vermont Chamber’s advocacy for critical cost-saving reforms that prioritize addressing root issues over simply increasing funding.

Moving Forward Together
Governor Scott’s speech reflected a shared vision with the Vermont Chamber: focusing on practical, long-term solutions to Vermont’s most significant challenges. From housing to affordability to workforce development, his priorities align with the Chamber’s commitment to advancing Vermont’s economy.

As the legislative session progresses, the Vermont Chamber will collaborate with lawmakers, the administration, and other stakeholders to achieve shared goals. The Governor, Speaker, and Pro Tem have all emphasized the importance of setting priorities, maintaining focus, and taking a collaborative approach. The Vermont Chamber will look for this commitment every day throughout the session, and expect all leadership to continue driving progress, delivering outcomes, and advocating for policies that support Vermont’s businesses and communities.

January 10, 2025

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Op-Ed: The Vermont Chamber’s 2025 Legislative Priorities

January 2, 2025January 2, 2025

Common Ground: Working Together to Address Vermont’s Affordability Crisis

Each year, the Vermont Chamber of Commerce outlines our legislative priorities with one focus in mind: creating the conditions to advance the Vermont economy. This year, our goals align closely with those voiced by Vermonters at the polls: addressing affordability, fostering economic growth, and doing the hard work to solve Vermont’s toughest challenges.

Affordability is at the forefront of these challenges. Vermonters are grappling with rising costs, driven by demographic pressures and systemic issues in areas such as education finance spending, housing, and healthcare. Based on data compiled by the Vermont Futures Project, our state must add an average of 13,500 people to its workforce annually through 2035 to keep the economy thriving in the face of demographic shifts. Meanwhile, meeting current housing demand will require tripling Vermont’s housing output to produce 36,000 new units by 2029.

Addressing this level of need is even more pressing given Vermont’s ranking as the third-highest state in the nation for tax collections per capita, according to the U.S. Census Bureau. Property and individual income taxes remain Vermont’s largest sources of revenue—placing additional stress on families and businesses already struggling with limited housing options and rising costs. While band-aid solutions might feel appealing, real progress requires honest conversations, a shared commitment, and a willingness to embrace compromise. We need solutions that tackle the root causes, not just the symptoms.

Last year’s success in modernizing Act 250 demonstrated how stakeholders with historically opposing sides commit to working together, and in doing so, real progress can be made—even when the process is challenging and compromises are required. By remaining fully engaged and working through disagreements, participants honored diverse perspectives and paved the way for continued collaboration, providing a blueprint for how to accomplish meaningful change. This model of purposeful engagement—where people listen to different viewpoints, set aside rhetoric, and remain focused on shared goals—must be a cornerstone of how we move forward in Montpelier and beyond. As we look ahead, whether in the State House, the boardroom, or around the kitchen table, we must prioritize this spirit of cooperation to address our affordability crisis and build a stronger future for businesses and communities across the state.

The Vermont Chamber is committed to playing an active role in this process. We will advocate for thoughtful, data-driven policies that reduce costs, grow our economy, and create opportunities for all Vermonters. Vermont’s challenges, from housing shortages to healthcare costs, do not rest on the shoulders of any one party, organization, or community. Making meaningful reforms will require all stakeholders—legislators, administration officials, advocates, businesses, and individuals—to engage in difficult conversations and embrace compromise. Only through a shared sense of responsibility—and shared accountability for the outcomes—can we create the conditions for inclusive and forward-thinking problem-solving. Blame and partisanship must give way to open-minded discussion and creative ideas that improve Vermonters’ lives.

As we begin the new legislative session, the Vermont Chamber calls on our leaders to remain engaged in discussions, continue the dialogue, and keep conversations focused on results. It’s time to move beyond rhetoric and engage in the real work of making Vermont more affordable and sustainable for all. By doing so, we can ensure our state’s economy remains vibrant, our communities remain livable, and our future remains bright.

January 2, 2025

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Vermont Chamber Advocates for Economic Growth and Housing Solutions

January 17, 2025

Laying the Groundwork for Education Finance Reform

January 17, 2025

Facing the Hard Truths: Vermont Businesses Call for Systemic Reforms

December 17, 2024December 12, 2024

Facing the Hard Truths: Vermont Businesses Call for Systemic Reforms

The Vermont Chamber’s recent Business Climate Survey reveals a stark reality: Vermont businesses feel increasingly challenged by rising costs, complex regulations, and not enough legislative focus on tackling systemic changes. From taxes to housing, and healthcare, businesses and residents alike are grappling with the same mounting pressures—escalating costs without proportional returns on investment. The message is clear: Vermont must address its most significant issues with bold, comprehensive reforms to remain competitive and economically intact.

General Business Climate: A Climate of Concern

Survey respondents consistently voiced frustration with Vermont’s business environment, citing rising operational costs, regulatory hurdles, and a lack of workforce availability. With an overall business climate score of 2.56 out of 5, the sentiment reflects significant concern. Businesses struggle to find qualified workers due to high living costs and limited housing, causing some to reduce hours, cut services, or consider relocation.

Taxes: Rising Burdens Without Balanced Returns

Taxation emerged as a dominant concern, with 91% of businesses stating that Vermont’s current tax structure hinders growth and investment. Businesses report feeling overwhelmed by an increasing array of taxes—property, payroll, income, and sales— and regulations while expressing frustration with what they see as inefficient state spending. A staggering 95% believe Vermont is not balancing tax increases with meaningful investments. Without reforms to taxation and spending, respondents fear that Vermont risks jeopardizing its viable business climate and driving businesses—and their employees—elsewhere.

Housing: A Crisis Blocking Growth

Housing availability remains one of the most pressing challenges for workforce development in Vermont. Despite significant state investments, businesses report little progress in improving housing options for their employees. The high cost of housing, combined with permitting restrictions and the increasing prevalence of short-term rentals, continues to hinder efforts to attract and retain workers. To address these challenges, businesses are advocating for streamlined permitting processes and targeted incentives that prioritize market rate workforce housing for renters and ownership.

Healthcare: Costs Rising Beyond Reach

Healthcare costs are another critical challenge, with escalating insurance premiums pushing many businesses to evaluate coverage options. Nearly 45% of respondents have had to adjust their benefits due to rising costs, and smaller businesses struggle most acutely. Employers are seeking systemic reforms to reduce healthcare costs and provide more equitable solutions without shifting the burden solely onto them.

Payroll Tax: Frustrations Over New Costs

Childcare remains an issue for Vermont’s workforce stability, though Vermont’s demographic realities mean that 48% of respondents indicated that none of their employees currently have childcare needs, raising frustrations over the financial obligations to the new childcare contribution payroll tax. For businesses with employees who rely on childcare, respondents indicated that current efforts have fallen short and have not provided effective solutions for working families. Employers report that childcare remains a challenge, with 47% seeing no improvement in affordability or availability since recent legislative changes.

While businesses recognize the importance of childcare, many are concerned about the financial impacts imposed by the new payroll tax, with 87% opposing further increases. These responses indicate that it will be critical to review independent data on how the recent investments are working and if additional reforms, rather than tax increases, are possible.

A Call to Action: Facing Complex Challenges Head-On

The survey underscores a common frustration: Vermont needs to focus on tackling the systemic issues that drive costs and limit growth. Vermont businesses are calling for bold reforms to the state’s tax structure, housing policy, and healthcare system to alleviate pressures and unlock long-term economic potential.

As the 2025 legislative session approaches, the Vermont Chamber remains committed to amplifying these voices and advocating for policies that reflect Vermont’s values while addressing its greatest challenges. The real progress Vermont needs requires facing complex issues directly, balancing costs with investments, and creating an environment where businesses and communities can thrive.

December 12, 2024

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Legislature Adjourns: What Businesses Need to Know

May 15, 2024May 15, 2024

Legislature Adjourns: What Businesses Need to Know

The House and Senate gaveled out on Saturday at 2:07 AM and 1:18 AM respectively, following a tumultuous day of negotiations. Bills will now head to the Governor for his consideration and potential veto. Legislators are then set to return to the State House on June 17 to try and garner the two-thirds vote majority to override his decisions.

Below are the top headlines that you should know:

Housing and Act 250 Modernization: Vermont lawmakers and stakeholders have achieved a noteworthy feat: passing substantial reforms that exempt the building of housing units from Act 250 in villages, neighborhoods, and downtowns across the state. The legislation represents a historic compromise that will help reduce regulatory barriers to meet workforce housing needs. Following nearly a year of negotiations, the bill is set to introduce a process to create a tiered location-based approach through extensive community engagement over the next three years. It will tailor the applicability of Act 250 based on a development’s location and environmental sensitivity. It will also establish a professional board to make the Act 250 process more predictable, fair, and timely in every district. The Governor has been critical of the bill throughout the session, but it remains to be seen if he will sign it into law, veto it, or allow it to become law without his signature.

Property Taxes: The Vermont House and Senate reached a consensus on the annual property tax bill aimed at funding school districts’ budgets. The bill would increase the average education property tax bill by a crushing 13.8%. Key provisions that brought it down from 18% include utilizing a one-time state budget surplus of $25 million to mitigate property tax rates, introducing a new 3% surcharge tax on short-term rentals, and a $14.7 million tax on internet software access (aka the “cloud tax”). The absence of immediate structural reforms to education financing remains deeply concerning and the establishment of a study committee on the issue does little to temper fears that Vermonters will be facing extreme increases again, next year. All eyes will be on the Legislature in June to see if there are enough votes to sustain the Governor’s likely veto, and if a veto letter will provide further suggestions on how to reduce the double-digit increase before Vermonters receive their tax bills.

Data Privacy: In the final hours, Senators walked back their version of a data privacy bill that would have been regionally compatible and removed a private right of action. The Vermont Chamber has consistently advocated for three essential pillars, all of which we have advocated for in other policy proposals as well: regional compatibility, empowering the Attorney General as the sole enforcement authority, and funding small business education and training through trusted in-state technical assistance providers. The bill will now be sent to the Governor for his consideration and, if enacted, it would introduce rigorous and untested regulations impacting businesses of all sizes. While it aims to enhance consumer privacy, a goal supported by the Vermont Chamber, it also presents significant challenges for businesses. It would require substantial adjustments to data management practices that could impact operational efficiency, and leave education and outreach to the Attorney General.

Public Safety: To address the statewide uptick in retail theft, a bill passed by the House and Senate amends the penalties associated with various theft thresholds by increasing the penalty per repeat incident. Currently, theft of merchandise valued at less than $900 constitutes a misdemeanor offense, regardless of repeat offenses. The bill, which still awaits a verdict from the Governor, classifies a third offense as a felony if the stolen property falls within the $250 to $900 value range. This would entail substantial fines and potential jail time.

FY25 Budget: A conference committee reconciled differences before sending an $8.6 billion state budget to the Governor, who signaled at a press conference he would likely sign the bill, despite a 0.25% increase over his proposed budget.

Renewable Energy Standard: The Legislature passed a bill significantly expanding the state’s Renewable Energy Standard, with most retail electricity providers required to reach 100% renewable energy by 2030, and municipal providers by 2035. The bill has estimated cumulative costs to ratepayers ranging between $150 million and $450 million over the period from FY 2025 to FY 2035, with potential incremental electricity rate increases up to 6.7% by FY 2035.

Chemical Regulation: A bill banning chemicals such as PFAS, phthalates, formaldehyde, mercury, and lead from various consumer products is headed to the Governor for his consideration. The bill aligns with similar legislation in California, Minnesota, Maine, and Washington.

Liquor Liability Insurance: A miscellaneous alcohol bill passed by the Legislature delays the implementation of mandatory liquor liability insurance until July 1, 2026. This essential measure would meet the need for the insurance market to adjust due to increasing premium rates and reduced capacity for insurers to accept risk.

Job Advertisement Requirements: A bill mandating the inclusion of a wage range in job advertisements has been sent to the Governor for consideration. If signed, the law will go into effect in 2025 with a mandate for the Attorney General to work with stakeholders on education and outreach.

Captive Audience: A bill that limits the ability of a business to communicate with employees, if an employee felt the communication was of a religious or political nature, has passed and will move to the Governor for review.

Recovery and Resiliency: A bill that ensures considerations for businesses while enhancing government responses to natural disasters is expected to pass. The Vermont Chamber advocated for businesses to be included in the scope of the bill early in the session.

Business Incentives: Several studies and changes to Vermont’s primary business incentive, the Vermont Employment Growth Incentive (VEGI) program, were considered in the last two years. Ultimately, all that was agreed to was a two-year extension of the programmatic VEGI sunset.

May 15, 2024

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Senate Working to Mitigate Property Tax Increases Below 13%

May 3, 2024

Senate Working to Mitigate Property Tax Increases Below 13%

The Senate Finance Committee only had one week to work on a critical bill which, as passed by the House, would raise property taxes by 15-18%, create a cloud tax (including software as a service, infrastructure as a service, and platform as a service), and add a 1.5% surcharge to short term rentals. The Chair of the committee, Ann Cummings (D-Washington) continues to be a champion for balance and well-informed policymaking this session and is working to get the property tax increase below 13%. She is taking a measured approach to the issue, with an understanding that raising other taxes to achieve this would also have implications.

One measure under discussion is leveraging the influx of general fund revenue from the solar eclipse to buy down $25 million. An additional proposal is borrowing $20 million from our reserves. However, the Treasurer is scheduled to testify later today that using reserve funds would pose a risk to Vermont’s credit rating. He previously testified in the House Ways in Means Committee on these concerns. The Senate Finance Committee is also considering a handful of sales taxes on items such as candy, sugar-sweetened beverages, clothing over $150, and vaping tobacco. Separately, following business testimony on the anticipated cost and complexity of a widespread cloud tax, the committee appears ready to scale back the House proposal to a tax on software as a service. The committee is expected to work late into this evening to ensure they vote the bill out.

Earlier this week, the committee considered transitioning from the proposed 1.5% short-term rental tax to a .5% rooms tax increase. The Vermont Chamber and members of the lodging community voiced concerns that another tax increase on the lodging industry could have far-reaching ramifications for the visitor economy. Kim Donahue, Owner of the Inn at the Round Barn Farm, testified that for every dollar spent at her business, visitors spend another $4 at neighboring businesses. These figures are particularly notable at scale when even a slight increase in taxation could redirect major events like wedding spending to neighboring states, jeopardizing Vermont’s competitiveness.

May 3, 2024

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House Advances Property Tax Hikes and Delays Reform

April 19, 2024

House Advances Property Tax Hikes and Delays Reform

Amid a $200 million increase in education spending, instead of making meaningful reform with cost containment measures, the House Ways and Means Committee has advanced legislation that includes double-digit property tax increases and adds more expenses for businesses. To pay for an increased property tax credit, the non-homestead tax would increase to 18%, 3% higher than the homestead rate. A cloud tax would also be implemented, including software as a service, platform as a service, and infrastructure as a service. Additionally, the bill proposes a $200,000 “Commission on the Future of Public Education” that would take 18 months to further study and make recommendations on how to improve the system. This means that rate increases will not be addressed this year and Vermonters could face another high increase again next year.

In written testimony, the Commissioner of the Tax Department stated, “The proposal to increase property tax credits for FY25 is not a reduction in total property taxes, but a cost shift that renters and businesses will pay. This is a puzzling approach when you consider the affordability crisis renters and employers currently confront.” Sending the issue to yet another study would not address the immediate needs of Vermonters. Meanwhile, in addition to property tax increases, the House has already passed $125 million in tax increases earlier this session.

April 19, 2024

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Crucial Tax Questions Remain Unanswered with Only Weeks Remaining

April 12, 2024

Crucial Tax Questions Remain Unanswered with Only Weeks Remaining

The question remains, how will the $230 million education fund deficit that is slated to increase property taxes by 18% be addressed? The House has already passed $125 million in tax increases, in addition to the $100 million payroll tax passed last year, but none are set to alleviate the property tax burden and will only further limit the taxing capacity of Vermonters and businesses.

The House Ways and Means Committee is considering a $20 million “cloud tax” on internet-based services and a potential 3% short-term rental surcharge related to the yield bill, which determines Vermont’s statewide property tax rate. The bill’s original scope has been scaled back, however, an increase in the non-homestead rate to 18.57% seems likely to remain. This shift would burden non-homestead payers, including businesses, with an additional $25 million in taxes to subsidize the property tax credit for homeowners.

April 12, 2024

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Laying the Groundwork for Education Finance Reform

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Governor Phil Scott’s Inaugural Speech Echoes Vermont Chamber’s Priorities

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Senate Finance Takes Up the $125 Million of Taxes Passed by the House

April 5, 2024

Senate Finance Takes Up the $125 Million of Taxes Passed by the House

The Senate Finance Committee began its review of the $125 million in tax increases and $6 million in increased fees passed by the House. During the run-through with Legislative Council and the Joint Fiscal Office, they raised important questions on who would be impacted and how these proposals would make Vermont compare with other states. The Chair, Sen. Ann Cummings (D-Washington), made it clear that they will welcome diverse testimony into the committee in the weeks ahead, including businesses.

The tax proposals include an increase in the Global Intangible Low Tax Income and Foreign Derived Intangible Income taxes, raising the top marginal tax rate of corporate income tax, creating a new personal income tax bracket of 11.75% starting at $500,000 of income, and a property transfer tax increase. The Vermont Chamber will continue to advocate for action that corrects systems that are not working instead of increasing taxation on residents and businesses. In doing so, we can secure Vermont’s future as a vibrant and welcoming place for all, today and tomorrow.

April 5, 2024

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