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Good Morning from Montpelier,
It was another busy week for the Vermont Legislature on one of the PLC's priority bills. Here is a recap of where things stand.
S. 46, An Act Relating to the Taxation of Vehicles Used for Forestry Operations: This bill was introduced by Sen. Rebecca White. As submitted, it would exempt new and used heavy-duty trucks and parts used in forestry operations from sales, purchase and use taxes, lowering costs for loggers and forest truckers in the state and putting them on a more equal footing with those in Maine and New Hampshire where such exemptions already exist. This bill is vital as the cost of trucks has more than doubled in the last decade due in part to the cost of mandatory Tier 4 engines designed to reduce emissions, yet that cost increase is preventing many in the logging industry from upgrading to these lower-emissions engines, thus defeating the intent.
PLC Executive Director Dana Doran and PLC Members Sam Lincoln and Michaela Kilburn of Vermont have all testified in favor of this bill before the Senate Committee on Transportation, and Sam spent much of this week keeping an eye on the bill’s progress - thank you, Sam. The committee spent this week getting answers and advice on the bill from fiscal and legal legislative counsel. This raised two issues. One was the fiscal impact on tax revenue, which the committee felt would be too high. The second concerned the committee’s authority to approve the sales tax exemption because revenue from sales tax does not go exclusively to transportation, it also funds state education.
To address those issues, Committee Chair Sen. Richard Westman proposed amending the bill to reduce the purchase and use tax exemption to 50% and remove the sales tax exemption entirely. On Friday, the amended version passed unanimously out of the committee and will now go to the Senate Finance Committee next week.
In making the amendment, Westman indicated he believes it offers the best chance to get the bill through the Finance Committee and over to the House for action. It also offers a chance for the Finance Committee to restore the sales tax exemption. While there is no guarantee that will happen, he and other members of the committee were supportive of that idea, particularly given the recent hardships in the logging industry and the importance placed on the sales tax exemption by sponsors and advocates.
While this is not a perfect situation, we are supportive of the overall strategy and hopeful we will have another chance to make our case for the full sales tax exemption. To that end, be ready to respond if we need you to reach out to your legislators to support this bill and the restoration of the sales tax portion.
Things are moving along quickly now in Montpelier. The policy committees had to vote bills out this week, and then next week is the deadline for any appropriations and finance committee action before the Senate and House can move bills to the other body through what is called crossover.
Please reach out to me with any questions, concerns, or suggestions.
Dana