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Good afternoon Town Officials,
What follows is a summary of legislative changes made in the 2019 session which we believe are important to highlight. Please keep in mind this is not an exhaustive list of all legislative changes.
You can find the final and complete language for each act by clicking on the "Act" hyperlinks.
Thank you.
Legislative Changes Affecting Vermont Cities and Towns



  *   Changes "Nonresidential" to "Nonhomestead," Act 46<https://legislature.vermont.gov/Documents/2020/Docs/ACTS/ACT046/ACT046%20As%20Enacted.pdf> (H.536<https://legislature.vermont.gov/bill/status/2020/H.536>), Sec. 1-2
     *   Changes the name and all statutory references to the "nonresidential" education grand list and property tax rate to "nonhomestead."
     *   Effective January 1, 2020.
  *   Current Use Definitions, Act 51<https://legislature.vermont.gov/Documents/2020/Docs/ACTS/ACT051/ACT051%20As%20Enacted.pdf> (H.514<https://legislature.vermont.gov/bill/status/2020/H.514>) Sec. 34
     *   Redefines "development," as it relates to Land Use Change Tax and is used in this section, to include subdivision resulting from the transfer of parcel(s) to an ex-spouse in a divorce settlement.
     *   Changes perpetual lease language from "exceeds 999 years" to "for a minimum of 999 years" in the definition of "owner."
     *   Effective June 10, 2019.
  *   Current Use, Land Use Change Tax Liens, Act 20<https://legislature.vermont.gov/Documents/2020/Docs/ACTS/ACT020/ACT020%20As%20Enacted.pdf>, (S.154<https://legislature.vermont.gov/bill/status/2020/S.154>)
     *   Effective July 1, 2019, sec. 108 changes the type of lien recorded with municipalities at the time of current use application to a "contingent" lien.
        *   Contingent lien shall convert to a lien at the time of development of enrolled land.
        *   Lien shall be in the amount of the Land Use Change Tax.
        *   Liens previously recorded with municipalities, on or after April 17, 1978, shall be considered a contingent lien.
     *   Effective July 1, 2020, sec. 109 repeals the land use change tax lien subordination.
  *   Definition: Homestead, Act 51<https://legislature.vermont.gov/Documents/2020/Docs/ACTS/ACT051/ACT051%20As%20Enacted.pdf> (H.514<https://legislature.vermont.gov/bill/status/2020/H.514>) Sec. 22
     *   Amends definition of "homestead" to include the "principal dwelling of a widow or widower when the dwelling is owned by the estate of the deceased spouse and it is likely that the dwelling will pass to the widow or widower on settlement of the estate.
     *   Effective July 1, 2019.
  *   Definition: Household Income, Act 51<https://legislature.vermont.gov/Documents/2020/Docs/ACTS/ACT051/ACT051%20As%20Enacted.pdf> (H.514<https://legislature.vermont.gov/bill/status/2020/H.514>) Sec. 23
     *   Redefines "household income" for the purposes of property tax income sensitivity adjustment so as not to include:
        *   income of a spouse or former spouse if the taxpayer is either separated or divorced during the taxable year, or if the spouse is subject to a protection (restraining) order; and,
        *   income attributable to cancellation of debt.
     *   Effective July 1, 2019.
  *   Definition: Income Sensitivity Adjustment, Act 51<https://legislature.vermont.gov/Documents/2020/Docs/ACTS/ACT051/ACT051%20As%20Enacted.pdf> (H.514<https://legislature.vermont.gov/bill/status/2020/H.514>) Secs. 29-33
     *   Renames the property tax income sensitivity adjustment as a "property tax credit."
     *   Effective June 10, 2019.
  *   Education Property Tax Rates, Act 46<https://legislature.vermont.gov/Documents/2020/Docs/ACTS/ACT046/ACT046%20As%20Enacted.pdf> (H.536<https://legislature.vermont.gov/bill/status/2020/H.536>), Sec. 6
     *   Sets the fiscal year 2020 yield amounts necessary for calculating education property tax rates:
        *   Property dollar equivalent yield is $10,648;
        *   Income dollar equivalent yield is $13,081; and,
        *   The non-residential property tax rate for fiscal year 2020 is set at $1.594 per $100 of equalized education property value.
     *   Effective July 1, 2019.

  *   Land Gains Tax Modernization, Act 71<https://legislature.vermont.gov/Documents/2020/Docs/ACTS/ACT071/ACT071%20As%20Enacted.pdf> (H.541<https://legislature.vermont.gov/bill/status/2020/H.541>) Secs. 16-17
     *   Makes significant changes to the Land Gains Tax such that it would only apply to transfers of land which have been recently purchased and subdivided.
        *   Only land subdivided by the transferor within six years of purchase would be subject to the tax.
        *   Exempts land transferred in a downtown development district, a village center, growth center, or new town center development.
     *   Effective January 1, 2020.

  *   Charter Change, Bennington, Act M-8<https://legislature.vermont.gov/Documents/2020/Docs/ACTS/ACTM008/ACTM008%20As%20Enacted.pdf>, (H.508<https://legislature.vermont.gov/bill/status/2020/H.508>)
     *   Authorizes the Town of Bennington to vote to assess a local option tax of one percent on any or all of the following:  meals, rooms, alcoholic beverages, or sales.
  *   Common Level of Appraisal Districts, Act 51<https://legislature.vermont.gov/Documents/2020/Docs/ACTS/ACT051/ACT051%20As%20Enacted.pdf> (H.514<https://legislature.vermont.gov/bill/status/2020/H.514>) Sec. 25-27
     *   Sec. 25 requires the Department to provide municipalities with language explaining the common level of appraisal on property tax bills.
     *   Sec. 26 authorizes municipalities within a school district to merge assessment districts and receive the same common level of appraisal, allowing them to receive the same tax rate. The election to merge is binding for 5 years.
     *   Sec. 27 contains additional instruction regarding the format of property tax bills.
     *   Effective for grand lists lodged after July 1, 2019.
  *   Distribution of Property Tax Adjustments, Act 51<https://legislature.vermont.gov/Documents/2020/Docs/ACTS/ACT051/ACT051%20As%20Enacted.pdf> (H.514<https://legislature.vermont.gov/bill/status/2020/H.514>) Sec. 28
     *   Increases the frequency with which the Department notifies and pays municipalities for homestead property tax adjustments from yearly to monthly.
     *   Effective June 10, 2019.

  *   Municipal Fees, Act 38<https://legislature.vermont.gov/Documents/2020/Docs/ACTS/ACT038/ACT038%20As%20Enacted.pdf> (H.526<https://legislature.vermont.gov/bill/status/2020/H.526>)

     *   Adjusts town clerks' fees for recording, filing and examination of documents which will impact tax related filings such as property transfer tax returns and lien filings.
     *   Requires the creation of a Restoration and Preservation Reserve Fund, into which a portion of the above fees are to be deposited, for the purpose of restoration, preservation, digitization, storage, and conservation of municipal records.
     *   Defines "survey plat" and specifies how and where one must be filed and used.
     *   Specifies that a property lien shall be deemed filed when a town or city clerk's indorsement appears on a certificate of lien, as well as other miscellaneous recording procedures.
     *   Multiple effective dates, beginning July 1, 2019.
  *   Reappraisals, Act 51<https://legislature.vermont.gov/Documents/2020/Docs/ACTS/ACT051/ACT051%20As%20Enacted.pdf> (H.514<https://legislature.vermont.gov/bill/status/2020/H.514>) Sec. 24
     *   Requires municipalities to reappraise its education grand list properties if it is determined by the Director of Property Valuation and Review that the common level of appraisal is below 85 percent or above 115 percent.
     *   Effective for grand lists lodged after July 1, 2019.

  *   Affordable Housing Tax Credits and Down Payment Assistance, Act 71<https://legislature.vermont.gov/Documents/2020/Docs/ACTS/ACT071/ACT071%20As%20Enacted.pdf> (H.541<https://legislature.vermont.gov/bill/status/2020/H.541>) Sec. 3
     *   Expands the cap on the Affordable Housing Tax Credit and the First Time Homebuyer Tax Credit by $125,000 each.
     *   Effective June 18, 2019.
  *   Downtown Tax Credit Program, Act 71<https://legislature.vermont.gov/Documents/2020/Docs/ACTS/ACT071/ACT071%20As%20Enacted.pdf> (H.541<https://legislature.vermont.gov/bill/status/2020/H.541>) Sec. 4
     *   Expands the cap on the Downtown and Village Center Tax Credit Program from $2.4 million to $2.6 million.
  *   Fee Waiver for Property Tax Appeals, Act 51<https://legislature.vermont.gov/Documents/2020/Docs/ACTS/ACT051/ACT051%20As%20Enacted.pdf> (H.514<https://legislature.vermont.gov/bill/status/2020/H.514>) Sec. 3

     *   Gives the Director of Property Valuation the authority to waive, reduce, or refund the property tax appeal filing fee of $70 for hardship, or to allow appeals regarding the same parcel to be joined into one appeal.
     *   Effective June 10, 2019.

Jill Remick | Director
Property Valuation and Review Division | Vermont Department of Taxes
(802) 828-6639 | 133 State Street | Montpelier, VT 05633-1401 | tax.vermont.gov

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