Veto Override Impacts Vermont Property Tax and Short-term Rentals

Vermont Public | By Lola Duffort, June 17, 2024

Vermont state lawmakers overrode Gov. Phil Scott’s veto of the property tax legislation necessary to pay for schools.

H.887 will result in an average property tax increase of 13.8%, and the ever-rising cost of education amid a time of declining enrollment once again dominated discussion at the Statehouse this year.

Property taxes were initially projected to rise 18.5%, but three factors — new revenues, surplus funds, and lower school budgets — allowed lawmakers to whittle that down by nearly five percentage points. A separate legislative intervention, earlier in the session, which nixed a tax break that many believed to be partly driving spending, helped head off a worst-case scenario in which property taxes might have risen by more than 20%.

The impact on short-term rental property owners

Additionally, the tax bill removes the sales tax exemption on software accessed remotely — like Turbotax — and enacts a 3% surcharge on short-term rentals, which will raise a combined $26 million in ongoing revenue for the education fund. But the legislation also uses just shy of $70 million in one-time surplus funds to buy down rates — an amount that concerns even some of the bill’s supporters, who worry this could set schools up for a fiscal cliff next year.

To read the full article from Vermont Public click here.

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