July 31, 2018
2018 Legislative Highlightshighlights
Legislative Highlights Published
  
The 2018 legislative highlights have been posted to the Department website. The page lists the significant tax law changes passed during the regular and special sessions.

New on July 1July1
Recent changes to legislation  
 
Social Security Exemption
Act 11, passed during the 2018 Special Session, creates a personal income tax exemption for Social Security beneficiaries below certain income thresholds. The law takes effect in calendar year 2018 for tax returns filed in 2019.
 
Renting a room with a view?
A law passed by the Vermont legislature this session has created new advertising requirements for owners of short-term rentals, beginning July 1, 2018. For example, they must include their Vermont Meals and Rooms Tax license number in their advertisements. Learn more about this and other requirements.
 
Sales tax exemption on advanced wood boilers 
Beginning July 1, 2018, sales of advanced wood boilers are exempt from Vermont Sales and Use Tax. We have added a section on these boilers to the Exemptions page on our website.

Remote Vendors and Sales Taxwayfair
Out-of-state vendors must collect Vermont Sales Tax 
The recent Supreme Court decision in Wayfair v. South Dakota has made the out-of-state vendor provisions of Act 134 of 2016 effective. Certain out-of-state vendors are now required to register with the State of Vermont and collect and remit sales tax beginning July 1, 2018.  Learn more .

Important Income Tax Announcements Announcements
An income tax refund for a self-employed person may go toward estimated tax
If a small business owner or self-employed person pays taxes via a Vermont personal income tax return, an overpayment for 2017 may be applied toward the 2018 period and will count toward his or her quarterly estimated payment.  This works the same way for anyone that is required to make quarterly estimated payments. A current year overpayment may be applied to the following year and count toward the first quarterly payment even if the return is filed on extension. A personal income tax refund cannot be applied toward a business tax account, however.
 
Is it time for a (paycheck) checkup?
The Tax Cuts and Jobs Act of 2017 may change the amount of income tax withheld from employees' paychecks. Now that we're nearly halfway through 2018, it's a great time to review the number of exemptions reported on Form W-4, and if applicable, Form W-4VT. Adjust withholding, if needed, so that tax liability at the end of the year is as close to zero as possible. The IRS Withholding Calculator is the best tool to help determine withholding.
 
Take note that if you reduce your withholding now, be sure to recheck it next January to avoid having too little withheld in 2019. Businesses may remind part time or seasonal employees to check their withholding. 

Free File is available until the October late filing date
For those taxpayers who were granted an extension to file their federal and Vermont personal income taxes, Free File will be available until the Oct. 15, 2018, due date. Most people whose Adjusted Gross Income for 2017 is $66,000 or less may use Free File. Choose a Free File vendor that is offering free filing of Vermont returns. Use the same vendor for both federal and state returns. To use Free File, visit the vendor's Free File site through the link on our website. Do not go directly to the vendor's commercial site first.

Public Hearing Scheduledhearing
Request for Public Comments  
 
The Vermont Department of Taxes has drafted revisions to its Sales and Use Tax Regulations and its Organization and Rules of Procedure and invites you to review and comment on the revisions. The revisions are available on our Public Comments page. The deadline for comments is Sep. 10, 2018.  The contact information for comments is on the website. 
 
There is a hearing scheduled for the revised regulations on Aug. 30, 2018, at 9:00 a.m., at 133 State Street, 4th Floor, Montpelier, VT. Attendees must check in at the first floor tax window before going to the fourth floor.

New Business Center on WebsiteOBC
New! Online Business Center  
 
Whether you are starting a new business or nonprofit in Vermont or have been in business for a while, be sure to check out our new online Business Center.
  
Here are the topics we cover:                                                                                                       
  • Starting a new business    
  • The new owner of an existing business
  • Starting a nonprofit organization
  • Self-employed person
  • Hiring employees
  • Selling a product (tangible personal property)
  • Selling a meal or renting a room
  • Selling alcoholic beverages
  • Updating a business
  • Closing a business

New Compliance Cornercompliance
Compliance Corner launches on website

Using examples drawn from actual cases, the Compliance Corner describes the current work the Department is doing to collect the right amount of tax from business and individual taxpayers.

Local Option Tax Changes LOT
Important information on local option tax changes in Killington and Barre City

Killington
Effective July 1, 2018, and after, Local Option Tax (LOT) sales tax  is no longer collectible in Killington. Any Killington LOT collected after this date must either be returned directly to the customer or paid to the Vermont Department of Taxes. Please note that LOT for Killington's meals and rooms remains in effect.

Barre City
Effective Oct. 1, 2018, the City of Barre will collect LOT meals and rooms tax, including alcoholic beverages served for immediate consumption. Merchants located or doing business in the City of Barre or merchants delivering there must begin collecting the additional 1% tax from customers and remitting the tax to the Vermont Department of Taxes.

For information about Local Option Tax, see our website and fact sheet.

Fact Sheets FactSheets
Sales and use tax guide for automotive repair shops and related industries
See the new guide, Vermont Sales and Use Tax Guide for Automotive Parts and Supplies. The fact sheet clarifies existing regulation. It also describes a change in how the Department interprets regulation on parts and supplies incorporated into a vehicle that is being reconditioned for resale. This change takes effect July 1, 2019. The guide also applies to other vehicle types, including motorcycles, boats, and snowmobiles.
 
Sales and use tax fact sheet on for renewable energy generation facilities
The new fact sheet, Vermont Sales and Use Tax Applied on Renewable Energy Generation Facilities, discusses the sales and use tax exemption for equipment used in manufacturing, as it relates to facilities that manufacture and sell electricity. It also explains sales and use tax exemptions that apply to home and business energy generation systems.
 
Fact sheet outlines taxation of fuels
The new fact sheet, Taxation of Fuels, explains which specific fuels are taxed or exempt based on their type and use. As of July 1, 2017, clear or undyed diesel fuel is exempt from sales tax when used in certain types of forestry equipment. Furthermore, in 2016 the legislature changed how heating fuel for residential or commercial use is taxed. Tax is now imposed on each gallon sold, instead of on the seller's gross receipts.
 
See our complete list for more fact sheets, guides, and infographics.   

Revised: Meals Tax for Events on CampusTB48
Technical Bulletin on Meals and Rooms Tax revised
 
Technical Bulletin TB-48, Application of Meals and Room Tax for Meals and Room Charges at a School or College, has been revised to clarify the treatment of meals served on campuses for both school-sponsored and private events, and provides a clarification on the exemption in the rooms and meals tax statute, 32 V.S.A. ยง 9202(10)(D).

Poster: Don't Be FooledFooled
Fraud awareness campaign
 
ID theft and tax fraud are big business---- for criminals. Preventing them is everyone's business. The Vermont Department of Taxes, together with the Office of Vermont Attorney General, launched the "Don't Be Fooled" campaign in April. The campaign features a poster that aims to prevent ID theft and tax scams by educating people on how to not become a victim. We invite people to download and put the poster up in public places, such as libraries, town halls, and community centers.
 

Disaster Aftermath GuidanceDisaster
Disaster and casualty losses may be deductible 
You may be able to deduct disaster and casualty losses relating to your home or business on your federal income tax return. Before you begin your income tax return, learn what criteria you must meet.
 
Out-of-state businesses and employees responding to a Vermont disaster or emergency
If you are a business not registered with Vermont but are coming to Vermont to help with disaster recovery efforts or an emergency, you should know about what state taxes to pay---- and which taxes you don't need to pay. To learn more, read our new section on Disaster Assistance for individuals and for businesses.

Read our new section on Disaster Assistance  to learn more about these topics.

Current Use Deadlines Aheadcurrentuse
Current Use Deadlines
 
If you wish to enroll in the Current Use Program for 2019, your application is due to the Division of Property Valuation and Review at the Department of Taxes by Sep. 1.
 
As of 2017, the due date is Nov. 1 for landowners with agricultural lands and farm buildings already enrolled in Current Use to submit their annual agricultural certifications.

Forest Management Activity Report RevisedFMAR
New Forest Management Activity Report forms 

On July 1, 2018, the Vermont Department of Taxes issued a new form, FMR-318, Forest Management Activity Report (FMAR), along with two supplementary forms. The new form replaces Form LU-FMAR.

You may begin using the new FMAR form after July 1, 2018.  We will continue to accept the old form for any activity that has occurred in 2018, but we will not accept the old form for any activity occurring in 2019.

To obtain the most current, updated form, please always download FMAR forms from the Department of Taxes website.       
                                                                                                                                  
* FMR-318, Use Value Appraisal Program: Forest Management Activity Report
* FMR-318 Instructions, Use Value Appraisal Program: Forest Management Activity Report
* FMR-319, Additional Owners for Forest Management Activity Report
* FMR-320, Additional Activity for Forest Management Activity Report

Beginning July 1, 2018, FMAR forms must be submitted to the Department of Taxes. Do not submit forms to the Department of Forests, Parks and Recreation.

Mail or hand deliver the forms to: Vermont Department of Taxes, 133 State Street, Montpelier VT 05633-1401.

If you have questions about the new forms or the Forest Management Activity Report, please contact your county forester.

Respond Securely to Information RequestsInfoReq
Protect your personal information
 
The Department often mails out requests for information needed to process or to verify a return. If you get a verification letter from us, follow the instructions to respond securely using myVTax, the Department's online tax portal. Never send account numbers, SSNs, FEINs, or other tax information through regular email, which is not secure. A prompt response to the letter helps prevent further delay.

When You Have a QuestionContactUs
Businesses with questions may reach the Department at 802-828-2505 (option 2). This phone number for businesses is answered Monday, Tuesday, Thursday, Friday 7:45AM-4:30PM. We do not take calls on Wednesdays.
  
For questions about Corporate or Business Entity Income Tax, email  tax.corporate@vermont.gov.
  
For questions about Sales and Use Tax, Meals and Rooms Tax, Local Option Tax, Withholding, or for support with myVTax, email tax.business@vermont.gov.
  
We are here to help.

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