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Good Morning from Montpelier,
This week, the PLC was successful in advancing its priority bill, S. 46, An Act Relating to the Taxation of Vehicles Used for Forestry Operations, through the Senate, clearing that hurdle and sending the bill on to the House where we are in hopes it can be restored to its original form and passed.
As you will recall, this bill was introduced by Sen. Rebecca White. As originally submitted, it would have exempted 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 neighboring states 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.
As the bill moved through Senate Committees in recent weeks, concerns over its impact on tax revenues that support transportation and education funding prompted a push to amend the bill to reduce the purchase and use tax exemption to 50% and remove the sales tax exemption entirely. While not ideal, this was a deliberate move on the part of supporters of the original bill to improve its chances of passage in the Senate, keeping it alive in hopes of restoring the original language in the latter stages of the legislative process in the House.
This week, the full Senate took up the bill on Wednesday and Thursday. As we anticipated, a recommendation to amend the bill further in order to sunset it after three years was adopted. On Thursday, the bill as amended received its third reading and was passed.
Action on this bill will now move to the House. Our strategy at this point is similar to that we employed in the Senate - namely moving the bill as amended as far through the process as possible before attempting to restore the full sales, purchase and use tax exemptions. We also plan to try and rescind the three-year sunset provision, as inconsistent tax policy will not help us. This strategy depends on our supporters in the Legislature successfully shepherding the bill past obstacles, and it is possible we will need our Members to reach out to legislators to support these moves and the bill itself, so please be ready to respond if we need you.
Please reach out to me with any questions, concerns, or suggestions.
Dana