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Vermont: Irene Sales Tax Holidays

  • Jan 30, 2012 | Will Frei

A group of Vermont lawmakers have proposed legislation to offer a tax reprieve to Vermont residents still suffering from Tropical Storm Irene.

Senate Bill No. 250, introduced by Senate President John Campbell, would create the following Vermont tax holidays:

  • No sales tax and use tax or local option sales tax on tangible personal property on August 28, 2012.
  • No sales and use tax or local option sales tax on weatherization products purchased between August 26, 2012 and September 1, 2012.
  • Between August 28, 2011 and June 30 2012, no sales and use tax, local option sales tax or property transfer tax for mobile homes purchased to replace those damaged by Irene. [Those who purchased prior to the measure's passing will be reimbursed for taxes they paid].

The measure also proposes to reimburse local jurisdictions for any loss in revenue they incur during the tax holidays and to reimburse local business owners for expenses they incur from reprogramming registers or computing equipment to adjust for the tax holidays.

As one might expect, the proposed holidays have provoked mixed reactions. From Lt. Governor Phil Scott, who conceived the legislation: "We have had some successful sales tax holidays in the past and I thought what better way to honor Vermonters that have sacrificed so much and also recognize the Yankee ingenuity and common sense that was shown throughout the ordeal and the recovery." Campbell, who lead the Post-Irene Property Task Force, stated that one of the recommendations from the task force was to provide a "tax-free home improvement day. My task force highlighted the fact that a lot of Vermont homeowners faced unexpected repair costs after the storm. This bill will help ease some of those burdens."

Vermont Governor Peter Shumlin offered a more measured reaction to the proposed tax holidays, saying, "We need to balance our desire to reduce the sales tax with our need to balance the budget, so one critical issue is how the state will pay for this $1.5 million package. But I like the idea and look forward to learning more about this proposal.”

On the opposing side, BurlingtonFreePress.com quotes House Speaker Shap Smith stating, “I think the sales holidays are a gimmick . . . If people are worried about the sales tax, lawmakers should look at lowering it over the long-term."

According to estimates from the Legislature's Joint Fiscal Office, the sales tax holidays would cost the state $1.5 million. One of the greatest challenges facing proponents of the bill is how to manage this expense, especially during a tight budget year.

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Avalara Author
Will Frei
Avalara Author Will Frei
Will Frei covers sales tax news including best practices, legislation and sales tax technology. He is the Social Media Manager at Avalara.