The Vermont Statutes Online

Title 32: Taxation and Finance

Chapter 103: Department of Taxes; Commissioner of Taxes

• Subchapter 001: GENERAL PROVISIONS

• § 3101. Powers and duties of Commissioner

  (a) The Department of Taxes shall be administered by a Commissioner of Taxes.

  (b) The Commissioner shall:

  (1) Report biennially to the General Assembly. The provisions of 2 V.S.A. § 20(d) (expiration of required reports) shall not apply to the report to be made under this subdivision.

  (2) Provide for the security of information required by law to be kept confidential.

  (3) Coordinate and integrate the work of the Department of Taxes with other agencies and departments responsible for the administration of taxes.

  (4) Advise the Secretary of Administration and the General Assembly on matters relating to tax policy, as requested.

  (5) Provide assistance and instruction to taxpayers and tax preparers, within the limits of available resources; provided, however, that in his or her communication with taxpayers, the Commissioner shall educate taxpayers about the available opportunities for resolving tax disputes through abatement, payment plans, offers in compromise, or any other possibilities for informal resolution before a final administrative decision on the merits of the dispute.

  (6) Design and make available to all who request them appropriate returns for reporting tax information.

  (7) Establish procedures for handling taxpayer appeals.

  (8) Establish and maintain a record of tax returns and other data furnished to the Department of Taxes.

  (9) Prepare and provide at a reasonable fee to all who request them copies of relevant tax statutes and rules.

  (10) Administer and enforce all taxes within the Commissioner’s jurisdiction.

  (11) From time to time prepare and publish statistics reasonably available with respect to the operation of this title, including amounts collected, classification of taxpayers, tax liabilities, and other facts as the Commissioner or the General Assembly considers pertinent.

  (12) [Repealed.]

  (13) From time to time provide municipalities with recommended methods for determining, for municipal tax purposes, the fair market value of renewable energy plants that are subject to taxation under section 8701 of this title. (Amended 1959, No. 329 (Adj. Sess.), § 41, eff. March 1, 1961; 1987, No. 243 (Adj. Sess.), § 69, eff. June 13, 1988; 1991, No. 186 (Adj. Sess.), §§ 1, 2, eff. May 7, 1992; 2001, No. 114 (Adj. Sess.), § 7a, eff. May 28, 2002; 2005, No. 14, § 10; 2007, No. 33, § 1, eff. May 18, 2007; 2011, No. 127 (Adj. Sess.), § 6, eff. Jan. 1, 2013; 2013, No. 142 (Adj. Sess.), § 67; 2015, No. 57, § 44; 2015, No. 131 (Adj. Sess.), § 34; 2021, No. 105 (Adj. Sess.), § 494, eff. July 1, 2022.)

• § 3102. Confidentiality of tax records

  (a) No present or former officer, employee, or agent of the Department of Taxes shall disclose any return or return information to any person who is not an officer, employee, or agent of the Department of Taxes except in accordance with the provisions of this section. A person who violates this section shall be fined not more than $1,000.00 or imprisoned for not more than one year, or both; and if the offender is an officer or employee of this State, the offender shall, in addition, be dismissed from office and be incapable of holding any public office for a period of five years thereafter.

  (b) The following definitions shall apply for purposes of this chapter:

  (1) “Person” shall include any individual, firm, partnership, association, joint stock company, corporation, trust, estate, or other entity.

  (2) “Return” means any tax return, declaration of estimated tax, license application, report, or similar document, including attachments, schedules, and transmittals, filed with the Department of Taxes.

  (3) “Return information” includes a person’s name, address, date of birth, Social Security or federal identification number or any other identifying number; information as to whether or not a return was filed or required to be filed; the nature, source, or amount of a person’s income, payments, receipts, deductions, exemptions, credits, assets, liabilities, net worth, tax liabilities, tax payments, deficiencies, or over-assessments; and any other data, from any source, furnished to or prepared or collected by the Department of Taxes with respect to any person.

  (4) “Tax administration” means the verification of a tax return or claim for credit, rebate, or refund; the investigation, assessment, determination, litigation, or collection of a tax liability of any person; the investigation or prosecution of a tax-related crime; or the enforcement of a tax statute.

  (5) “Commissioner” means the Commissioner of Taxes appointed under section 3101 of this title or any officer, employee, or agent of the Department of Taxes authorized by the Commissioner (directly or indirectly by one or more redelegations of authority) to perform any function of the Commissioner.

  (6) “State” means any sovereign body politic, including the United States, any state or territory thereof, and any foreign country or state or province thereof.

  (7) “Authorized representative” means any person who would be considered a designee of the taxpayer under 26 U.S.C. § 6103(c). The signature of a notary public shall not be required for a person to be considered an “authorized representative.”

  (c) The Commissioner shall disclose a return or information appearing on a return:

  (1) to the person who filed the return with the Department of Taxes or any authorized representative of that person; and

  (2) to any one of the several persons filing a joint, partnership, or consolidated return with the Department of Taxes, or any authorized representative of those persons.

  (d) The Commissioner shall disclose a return or return information:

  (1) to any person, in compliance with a judicial order directing disclosure; provided, however, that nothing in this section shall be construed to preclude the Commissioner from contesting the issuance of a judicial order;

  (2) to any officer, employee, or agent of any law enforcement authority, if pursuant to a warrant issued in accordance with the provisions of Rule 41 of the Vermont Rules of Criminal Procedure; provided, however, that nothing in this section shall be construed to preclude the Commissioner from contesting the issuance of a warrant;

  (3) to any person who inquires, provided that the information is limited to whether a person is registered to collect Vermont income withholding, sales and use, meals and rooms, or cannabis excise tax; whether a person is in good standing with respect to the payment of these taxes; whether a person is authorized to buy or sell property free of tax; or whether a person holds a valid license under chapter 205 or 239 of this title or 10 V.S.A. § 1942;

  (4) to any other person specifically authorized by law to receive such information;

  [Subdivision (d)(5) effective until July 1, 2026; see also subdivision (d)(5) effective July 1, 2026 set out below.]

  (5) to the Attorney General, if such return or return information relates to chapter 205 of this title or 33 V.S.A. chapter 19, subchapters 1A and 1B, for purposes of investigating potential violations of and enforcing 7 V.S.A. chapter 40, 20 V.S.A. chapter 173, subchapter 2A, 33 V.S.A. chapter 19, subchapters 1A and 1B, and 21 V.S.A. §§ 346, 387, 712, and 1379;

  [Subdivision (d)(5) effective July 1, 2026; see also subdivision (d)(5) effective until July 1, 2026 set out above.]

  (5) to the Attorney General, if such return or return information relates to chapter 205 of this title or 33 V.S.A. chapter 19, subchapters 1A and 1B, for purposes of investigating potential violations of and enforcing 7 V.S.A. chapter 40, 20 V.S.A. chapter 173, subchapter 2A, and 33 V.S.A. chapter 19, subchapters 1A and 1B;

  (6) to the Vermont Economic Progress Council, provided that the disclosure relates to a successful business applicant under chapter 105, subchapter 2 of this title and the incentive it has claimed is reasonably necessary for the Council to perform its duties under that subchapter;

  (7) to the Joint Fiscal Office pursuant to subsection 10503(e) of this title and subject to the conditions and limitations specified in that subsection; and

  (8) to the Attorney General; the Data Clearinghouse established in the October 2017 Non-Participating Manufacturer Adjustment Settlement Agreement, which the State of Vermont joined in 2018; the National Association of Attorneys General; and counsel for the parties to the Agreement as required by the Agreement and to the extent necessary to comply with the Agreement and only as long as the State is a party to the Agreement.

  (e) The Commissioner may, in the Commissioner’s discretion and subject to such conditions and requirements as the Commissioner may provide, including any confidentiality requirements of the Internal Revenue Service, disclose a return or return information:

  (1) To any person, provided that the information appears in records that are otherwise available to the general public; it shall not be an abuse of discretion to deny disclosure on the grounds that the information is of the type available at a town clerk’s office.

  (2) To any person, provided that such disclosure is reasonably necessary for purposes of Vermont tax administration.

  (3) To any officer, employee, or agent of any other state or Vermont municipality that administers its own local option sales tax or meals and rooms tax or gross receipts tax under its charter, provided that the information will be used by that state or municipality for tax administration and that state or municipality grants substantially similar disclosure privileges to this State and provides for the secrecy of records in terms substantially similar to those provided by this section.

  (4) To any officer, employee, or agent of any law enforcement authority pursuant to a judicial order issued ex parte upon application by the Commissioner for the purpose of determining the location of a fugitive from justice or under circumstances involving an imminent danger of death or serious bodily injury to an individual. Information disclosed under this subdivision shall be used exclusively for the purpose for which disclosure was granted.

  (5) To the person whose return information is sought, or any duly authorized representative of that person.

  (6) To any person who shall use such return or return information solely in connection with the processing of such a return or return information or in connection with the audit of the books, records, and accounts of the Department of Taxes.

  (7) To any person, or that person’s duly authorized representative, provided that the information is necessary to determine that person’s liability for a tax administered by the Commissioner and cannot reasonably be obtained from another source.

  (8) To the Commissioner of Labor for the purpose of establishing the identity or liability of employers for unemployment compensation.

  (9) To any person, provided that the disclosure is reasonably necessary to investigate or discipline employee misconduct relating to the failure of an employee of the Department of Taxes to comply with federal or State tax laws.

  (10) To any person, provided that the disclosure is reasonably necessary to investigate the truthfulness of a statement made pursuant to section 3113 of this title that a contractor, licensee, or person authorized by the State to conduct a trade or business is in good standing with respect to or in full compliance with a plan to pay any and all taxes due as of the date such statement is made, or to discipline or prosecute any person making a false statement.

  (11) To the Joint Fiscal Office or its agent, provided that the disclosure relates to a successful business applicant under chapter 105, subchapter 2 of this title and the incentive it has claimed and is reasonably necessary for the Joint Fiscal Office or its agent to perform the duties authorized by the Joint Fiscal Committee or a standing committee of the General Assembly under that subchapter; to the Auditor of Accounts for the performance of duties under section 163 of this title; and to the Department of Economic Development for the purposes of subsection 5922(f) of this title.

  (12) [Repealed.]

  (13) To the Center for Crime Victim Services for the purpose of determining or verifying a defendant’s assets and income pursuant to 13 V.S.A. § 7043.

  (14) To the Office of the State Treasurer, only in the form of mailing labels, with only the last address known to the Department of Taxes of any person identified to the Department by the Treasurer by name and Social Security number, for the Treasurer’s use in notifying owners of unclaimed property.

  (15) To the Division of Liquor Control, provided that the information is limited to information concerning the sales and use tax and meals and rooms tax filing history with respect to the most recent five years of a person seeking a liquor license or a renewal of a liquor license.

  (16) To the Commissioner of Financial Regulation and the Commissioner of Vermont Health Access, if such return or return information relates to obligations of health insurers under chapter 243 of this title.

  (17) To the Department of Financial Regulation, if such return or return information relates to the tax on premiums of captive insurance companies contained in 8 V.S.A. chapter 141, to the tax on surplus lines under 8 V.S.A. § 5035, to the tax on the direct placement of insurance under 8 V.S.A. § 5036, or to the tax on insurance premiums under section 8551 of this title.

  (18) To the Agency of Natural Resources, if such return or return information relates to the tax on hazardous waste under chapter 237 of this title or to the franchise tax on waste facilities under chapter 151, subchapter 13 of this title.

  (19) To the Vermont Student Assistance Corporation, if such return or return information is necessary to verify eligibility for the matching allocation required by 16 V.S.A. § 2880d(c).

  (20) To a publicly traded partnership as defined in subdivision 5920(h)(1) of this title and to lower-tier pass-through entities of a publicly traded partnership as defined in subdivision 5920(h)(4) of this title for the purpose of reviewing, granting, or denying exemption requests from the requirements of section 5920 of this title.

  (21) To the Department of Vermont Health Access for purposes of providing outreach to Vermont residents without minimum essential coverage pursuant to section 10454 of this title.

  (22) To the Agency of Natural Resources and the Department of Public Service, provided that the disclosure relates to the sales and use tax for aviation jet fuel and natural gas under chapter 233 of this title or to the fuel tax under 33 V.S.A. chapter 25 and is subject to any confidentiality requirements of the Internal Revenue Service and the disclosure exemption provisions of 1 V.S.A. § 317.

  (23) To the Public Utility Commission and the Department of Public Service, provided the disclosure relates to the fuel tax under 33 V.S.A. chapter 25 and is used for the purposes of auditing compliance with the Clean Heat Standard under 30 V.S.A. chapter 94. The Commissioner shall, at a minimum, provide the names of any new businesses selling heating fuel in any given year and the names of any businesses that are no longer selling heating fuel.

  (24) To the Division of Vermont Emergency Management at the Department of Public Safety for the purposes of emergency management and communication, and to the Department of Housing and Community Development and any organization then under contract with the Department of Housing and Community Development to carry out a statewide housing needs assessment for the purpose of the statewide housing needs assessment, provided that the disclosure relates to the information collected on the landlord certificate pursuant to subsection 6069(c) of this title.

  (f) Notwithstanding the provisions of this section, information obtained from the Commissioner for Children and Families under 33 V.S.A. § 112(c), the Vermont Student Assistance Corporation under 16 V.S.A. § 2843, or the Dental Health Program under 33 V.S.A. § 4507shall be confidential, and it shall be unlawful for anyone to divulge such information except in accordance with a judicial order or as provided under another provision of law.

  (g) Nothing in this section shall be construed to prohibit the publication of statistical information, rulings, determinations, reports, opinions, policies, or other information so long as the data is disclosed in a form that cannot identify or be associated with a particular person.

  (h) If any provision of Vermont law authorizes or requires the Commissioner to divulge or make known in any manner any return or return information, the person or persons receiving such return or return information (other than information disclosed under subsection (i) of this section) shall be subject to the provisions of subsection (a) of this section as if such person were the agent of the Commissioner. Nothing in this subsection shall be construed to restrict the disclosure of a return or return information by the person to whom it relates.

  (i) The Commissioner may, for the purpose of notifying the public of the revocation of a meals and rooms tax license or sales and use tax certificate, disclose the name of the taxpayer and name of the business, the business address, and the license or certificate number.

  (j) Tax bills prepared by a municipality under subdivision 5402(b)(1) of this title showing only the amount of total tax due shall not be considered confidential return information under this section. For the purposes of calculating credits under chapter 154 of this title, information provided by the Commissioner to a municipality under subsection 6066a(a) of this title and information provided by the municipality to a taxpayer under subsection 6066a(f) shall be considered confidential return information under this section.

  (k) Notwithstanding subsection (j) of this section, the Commissioner or a municipal official acting as the Commissioner’s agent may provide the information in subsection 6066a(f) of this title to the following persons without incurring liability under this section:

  (1) an escrow agent, the owner of the property to which the credit applies, a town auditor, or a person hired by the town to serve as an auditor;

  (2) a lawyer, including a paralegal or assistant of the lawyer; an employee or agent of a financial institution as that term is defined in 8 V.S.A. § 11101; an employee or agent of a credit union as that term is defined in 8 V.S.A. § 30101; a realtor; or a certified public accountant as that term is defined in 26 V.S.A. § 13(12), who represents that the individual has a need for the information as it pertains to a real estate transaction or to a client or customer relationship; and

  (3) any other person as long as the taxpayer has filed a written consent to such disclosure with the municipality.

  (l)(1) The Commissioner of Taxes and the Chief Fiscal Officer of the Joint Fiscal Office shall enter into a memorandum of understanding in order to provide the Joint Fiscal Office with State returns and return information necessary for the Joint Fiscal Office or its agents to perform its duties, including conducting its own statistical studies, forecasts, and fiscal analysis.

  (2) The memorandum of understanding shall provide for:

  (A) mechanisms to prevent the identification of individual taxpayers, including the redaction of any information that identifies a particular taxpayer;

  (B) protocols for handling and transmitting returns and return information;

  (C) the designation of specific employees of the Joint Fiscal Office with access to the information provided by the Department of Taxes; and

  (D) the incorporation of penalties for unauthorized disclosures under subsections (a) and (h) of this section.

  (m) Notwithstanding any other provision of law, the Commissioner may publish the names, addresses, and amounts of tax liability for the 100 individual taxpayers and 100 business taxpayers with the greatest unresolved tax liability under this title. The Commissioner shall send a notice of intent to publish a taxpayer’s name, tax liability, and address to the taxpayer before publication. A taxpayer’s information may only be published pursuant to this subsection if he or she has been delinquent for more than 90 days after the end of any applicable administrative appeal periods.

  (n) Data reported to the Commissioner of Taxes by a deposit initiator under 10 V.S.A. § 1530 shall not be considered confidential return or return information under this section, provided that the Commissioner may only disclose the data in summary or aggregated form that does not directly or indirectly identify individual deposit initiators except when the Commissioner discloses data regarding individual deposit initiators to the Secretary of Natural Resources in relation to the administration of 10 V.S.A. chapter 53. (Amended 1965, No. 194, § 10, eff. July 1, 1965, operative Feb. 1, 1967; 1987, No. 278 (Adj. Sess.), § 2, eff. June 21, 1988; 1989, No. 222 (Adj. Sess.), § 3, eff. May 31, 1990; 1991, No. 186 (Adj. Sess.), §§ 38, 39, eff. May 7, 1992; 1993, No. 49, §§ 1, 22, eff. May 28, 1993; 1995, No. 29, § 3, eff. April 14, 1995; 1999, No. 147 (Adj. Sess.), § 4; 1999, No. 159 (Adj. Sess.), § 16; 2001, No. 114 (Adj. Sess.), § 7b, eff. May 28, 2002; 2001, No. 134 (Adj. Sess.), § 8, eff. June 21, 2002; 2001, No. 138 (Adj. Sess.), § 2, eff. June 21, 2002; 2003, No. 14, § 2; 2003, No. 57, § 12, eff. July 1, 2004; 2005, No. 103 (Adj. Sess.), § 3, eff. April 5, 2006; 2005, No. 174 (Adj. Sess.), § 63; 2005, No. 184 (Adj. Sess.), § 10, eff. Jan. 1, 2007; 2007, No. 190 (Adj. Sess.), §§ 38, 39, eff. June 6, 2008; 2009, No. 22, § 7; 2011, No. 45, § 31, eff. May 24, 2011; 2011, No. 143 (Adj. Sess.), §§ 4, 5, eff. May 15, 2012; 2013, No. 73, § 6; 2013, No. 73, § 49, eff. July 1, 2013; 2013, No. 174 (Adj. Sess.), § 31, eff. June 4, 2014; 2015, No. 97 (Adj. Sess.), § 83; 2015, No. 134 (Adj. Sess.), § 1, eff. May 25, 2016; 2015, No. 157 (Adj. Sess.), § H.4, eff. Jan. 1, 2017; 2017, No. 69, § A.2, eff. June 28, 2017; 2017, No. 73, § 3, eff. June 13, 2017; 2017, No. 73, § 17, eff. Jan. 1, 2018; 2019, No. 51, §§ 1, 11, eff. June 10, 2019; 2019, No. 63, § 2, eff. Jan. 1, 2020; 2019, No. 73, § 43; 2019, No. 85 (Adj. Sess.), § 7, eff. Feb. 20, 2020; 2019, No. 85 (Adj. Sess.), § 14, eff. July 1, 2026; 2019, No. 99 (Adj. Sess.), § 1, eff. April 28, 2020; 2019, No. 99 (Adj. Sess.), § 2, eff. Jan. 15, 2021; 2019, No. 164 (Adj. Sess.), § 14a, eff. March 1, 2022; 2019, No. 175 (Adj. Sess.), § 20, eff. Oct. 8, 2020; 2021, No. 3, § 60, eff. Jan. 15, 2021; 2021, No. 3, § 61, eff. July 1, 2021; 2021, No. 3, § 62, eff. July 1, 2024; 2021, No. 105 (Adj. Sess.), § 495, eff. July 1, 2022; 2023, No. 3, § 102, eff. March 20, 2023; 2023, No. 142 (Adj. Sess.), § 12, eff. May 30, 2024; 2023, No. 181 (Adj. Sess.), § 99, eff. June 17, 2024.)

• §§ 3103-3105. Repealed. 1987, No. 243 (Adj. Sess.), § 70, eff. June 13, 1988.

• §§ 3106, 3107. Repealed. 1961, No. 217, § 10, eff. July 13, 1961.

• § 3108. Establishment of interest rate

  (a) Not later than December 15 of each year, the Commissioner shall establish an annual rate of interest applicable to unpaid tax liabilities and tax overpayments that shall be equal to the average prime rate charged by banks during the immediately preceding 12 months commencing on October 1 of the prior year, rounded upwards to the nearest quarter percent. The rate established hereunder shall be effective on January 1 of the immediately following year. As used in this section, the term “prime rate charged by banks” shall mean the average predominate prime rate quoted by commercial banks to large businesses as determined by the Board of Governors of the Federal Reserve Board.

  (b) Whenever the Commissioner is authorized or directed to pay interest on an overpayment of any taxes, nevertheless no interest shall be paid on such overpayment:

  (1) where the Commissioner finds that such overpayment was made with the intention or expectation of receiving a payment of interest thereon and for no other reason;

  (2) for any period of time prior to 45 days after the date the return other than a corporate income tax return was due, including any extensions of time or 45 days after the return was filed, whichever is the later date, and with respect to corporate income tax returns, for any period of time prior to 90 days after the date the return was due or 90 days after the return was filed, whichever is the later date;

  (3) in the case of overpayments that result from carrybacks, for a period of time prior to 45 days after the end of the tax year in which the event giving rise to the carryback occurred; or

  (4) to the extent the overpayment is paid at the direction of the taxpayer to a municipality for credit against the taxpayer’s homestead property tax liabilities.

  (c)(1) For the purposes of subsection (b) of this section, a return shall not be treated as filed until it is filed in processible form, which means that the return is filed on a permitted form and the return contains the taxpayer’s name, address, identifying number, the required signature, and sufficient information, whether on the return or on required attachments, to permit the mathematical verification of the tax liability shown on the return.

  (2) The provisions of subsection (b) of this section shall apply notwithstanding any other provision of law to the contrary. (Added 1981, No. 191, (Adj. Sess.), § 1; amended 1983, No. 59, § 2, eff. April 22, 1983; 1999, No. 49, § 75, eff. June 2, 1999; 2005, No. 185 (Adj. Sess.), § 4, eff. Jan. 1, 2007; 2011, No. 143 (Adj. Sess.), § 15, eff. May 15, 2012; 2019, No. 51, § 2, eff. June 10, 2019; 2019, No. 175 (Adj. Sess.), § 28, eff. Oct. 8, 2020; 2021, No. 105 (Adj. Sess.), § 496, eff. July 1, 2022.)

• § 3109. Sheriffs and collection agencies; contracts for the collection of taxes; the use of bank or credit cards for the payment of delinquent taxes

  (a) The Commissioner may contract with one or more sheriffs or constables for the collection of taxes by the sheriff’s or constable’s performance of services authorized by law, for compensation that may be in lieu of any statutory fees. The compensation terms of such contracts shall be uniform throughout the State unless the Commissioner certifies that differential terms are required because of unusual circumstances in a particular case, and recites such circumstances in the contract. When contracting with the Commissioner under this subsection, constables are authorized to avail themselves of all statutory remedies available to sheriffs to collect taxes. Notwithstanding section 502 of this title, the Commissioner may charge against such collections an agreed-upon fixed rate or percentage of collections.

  (b) The Commissioner may also contract with private collection agencies for the collection of taxes owed to the State by taxpayers. The Commissioner may agree to pay such agencies a fixed rate for services rendered or a percentage of the amount actually collected by such agencies and remitted to the Commissioner. Notwithstanding section 502 of this title, the Commissioner may charge against such collections an agreed-upon fixed rate or percentage of collections.

  (c) If the Commissioner determines that an employee of a private collection agency has violated any provision of section 3102 of this title, such employee shall, in addition to any other sanctions under section 3102, be barred from acting under any contract with the State and shall be incapable of acting as an agent, employee, or public officer of the State for a period of five years thereafter.

  (d) As used in this section, the word “taxes” shall include all tax liabilities, license fees, interest, penalties, fees, and any other charges or amounts arising from any tax liability owed to the State.

  (e) As used in this section, the word “Commissioner” shall include the Commissioner of Motor Vehicles. (Added 1983, No. 178 (Adj. Sess.), eff. April 20, 1984; amended 1985, No. 266 (Adj. Sess.), § 5, eff. June 4, 1986; 1987, No. 278 (Adj. Sess.), § 13, eff. June 21, 1988; 1991, No. 186 (Adj. Sess.), §§ 4, 6, eff. May 7, 1992; 1993, No. 60, §§ 24a, 24b eff. May 28, 1993; 1995, No. 63, §§ 24a, 24b, eff. May 4, 1995; 1995, No. 82 (Adj. Sess.), § 1, eff. Feb. 21, 1996; 2003, No. 109 (Adj. Sess.), § 14; 2021, No. 105 (Adj. Sess.), § 497, eff. July 1, 2022.)

• § 3109a. Repealed. 2003, No. 70 (Adj. Sess.), § 32, eff. March 1, 2004.

• § 3110. Payments accepted by the Commissioner

  Notwithstanding section 583 of this title and any other provision of law to the contrary, the Commissioner may accept payment of taxes, license fees, penalties, interest, fees, or other charges by any means that the Commissioner deems necessary for the effective administration of taxes. When accepting payment by bank credit cards, the Commissioner may charge the taxpayer an additional amount that approximates the cost of providing the service and that is approved by the Secretary of Administration for each payment made by credit card. Notwithstanding section 502 of this title, the Commissioner may charge against collections paid using a bank credit card a percentage of collections and any service fee imposed. (Added 1991, No. 186 (Adj. Sess.), § 5, eff. May 7, 1992; amended 2003, No. 61, § 3; 2021, No. 73, § 4.)

• § 3111. Internal Revenue Service charges

  Notwithstanding section 502 of this title, the Commissioner may charge against any State tax liability a fee agreed to by the Department and paid to the U.S. Department of the Treasury for participation in a Debt Setoff Program. (Added 2001, No. 144 (Adj. Sess.), § 14, eff. June 21, 2002.)

• § 3112. Allocation of payments

  (a) Any payment received by the Commissioner from any taxpayer may, notwithstanding any direction by the taxpayer to the contrary, be applied to the taxpayer’s liability for any tax administered by the Commissioner and for any period. Any payment may, with respect to any taxable period, be applied first to the amount of any interest, next to the amount of any penalty, next to the amount of any fee, and finally to the amount of any unpaid tax liability for that period.

  (b) The Commissioner may treat any refund payment owed by the Commissioner to a taxpayer as if it were a payment received from the taxpayer and may apply the payment in accordance with subsection (a) of this section.

  (c) The provisions of this section shall apply notwithstanding any appeal by the taxpayer. (Added 1985, No. 263 (Adj. Sess.), § 3, eff. June 4, 1986.)

• § 3113. Requirement for obtaining license, governmental contract, or employment

  (a) As used in this section, “agency” means any unit of State government, including agencies, departments, boards, commissions, authorities, or public corporation.

  (b) No agency of the State shall grant, issue, or renew any license or other authority to conduct a trade or business (including a license to practice a profession) to, or enter into, extend, or renew any contract for the provision of goods, services, or real estate space with any person unless the person shall first sign a written declaration under the pains and penalties of perjury that the person is in good standing with respect to or in full compliance with a plan to pay any and all taxes due as of the date the declaration is made, except that the Commissioner may waive this requirement as the Commissioner deems appropriate to facilitate the Department of Financial Regulation’s participation in any national licensing or registration systems for persons required to be licensed or registered by the Commissioner of Financial Regulation under Title 8, Title 9, or 18 V.S.A. chapter 221.

  (c) Every agency shall, upon request of the Commissioner, furnish a list of licenses and contracts issued or renewed by the agency during the reporting period; provided, however, that the Secretary of State shall, with respect to certificates of authority to transact business issued to foreign corporations, furnish to the Commissioner only those certificates originally issued by the Secretary of State during the reporting period and not renewals of such certificates. The lists shall include the name, address, Social Security or federal identification number of the licensee or provider, and other information as the Commissioner may require.

  (d) If the Commissioner determines that any person who has agreed to furnish goods, services, or real estate space to any agency has neglected or refused to pay any tax administered by the Commissioner and that the person’s liability for such tax is not under appeal, or if under appeal, the Commissioner has determined that the tax or interest or penalty is in jeopardy, the Commissioner shall notify the agency and the person in writing of the amount owed by the person. Upon receipt of such notice, the agency shall thereafter transfer to the Commissioner any amounts that would otherwise be payable by the agency to the taxpayer, up to the amount certified by the Commissioner. The Commissioner may treat any payment as if it were a payment received from the taxpayer. As used in this section, “any person who has agreed to furnish goods, services, or real estate space to any agency” includes a provider of Medicaid services that receives reimbursement from the State under Title 33.

  (e) No agency of the State shall make final payment of any amount owed under a contract that contemplates the employment of any person within the State or the use of any property within the State, or otherwise release any person from the obligations of any contract, unless the person shall first obtain a certificate issued by the Commissioner that the person is in good standing with respect to or in full compliance with a plan to pay any and all taxes due as of the date of issuance of the certificate.

  (f) Upon written request by the Commissioner and after notice and hearing to the licensee as required under any applicable provision of law, an agency shall revoke or suspend any license or other authority to conduct a trade or business (including a license to practice a profession) issued to any person if the agency finds that taxes administered by the Commissioner have not been paid and that the taxpayer’s liability for the taxes is not under appeal. For purposes of the findings, the written representation to that effect by the Commissioner to the agency shall constitute prima facie evidence thereof. The Commissioner shall have the right to intervene in any hearing conducted with respect to the license revocation or suspension. Any findings made by the agency with respect to the license revocation or suspension shall be made only for the purposes of the proceeding and shall not be relevant to or introduced in any other proceeding at law, except for any appeal from the license revocation or suspension. Any license or certificate of authority suspended or revoked under this section shall not be reissued or renewed until the agency receives a certificate issued by the Commissioner that the licensee is in good standing with respect to any and all taxes payable to the Commissioner as of the date of issuance of the certificate. Any person aggrieved by the decision of the agency may appeal the decision in accordance with the provisions of 3 V.S.A. chapter 25.

  (g) For the purposes of this section, a person is in good standing with respect to any and all taxes payable if:

  (1) no taxes are due and payable and all returns have been filed;

  (2) the liability for any taxes due and payable is on appeal;

  (3) the person is in compliance with a payment plan approved by the Commissioner; or

  (4) in the case of a licensee, the agency finds that requiring immediate payment of taxes due and payable would impose an unreasonable hardship. If the agency finds an unreasonable hardship, it may condition renewal on terms that will place the person in good standing with respect to any and all taxes as soon as reasonably possible.

  (h) Any person who knowingly makes or subscribes any return, statement, or other document under this title that contains or is verified by an unsworn written declaration that is made under the pains and penalties of perjury and that is not true and correct as to every material matter shall be fined not more than $10,000.00 and imprisoned not more than 15 years, or both.

  (i) No agency of the State shall hire any person as a full-time, part-time, temporary, or contractual employee unless the person shall first sign a written declaration under the pains and penalties of perjury that the person is in good standing with respect to or in full compliance with a plan to pay any and all taxes due as of the date the declaration is made. This requirement applies only to the initial hire of an individual into a position that is paid using the State of Vermont federal taxpayer identification number, other than as a county employee, and not to an employee serving in the position or who returns to any position in State government as a result of a placement right or reduction in force recall right. (Added 1985, No. 263 (Adj. Sess.), § 4, eff. June 4, 1986; amended 1991, No. 67, §§ 1, 2, eff. June 19, 1991; 1997, No. 50, § 9, eff. June 26, 1997; 1999, No. 49, § 42, eff. June 2, 1999; 2003, No. 70 (Adj. Sess.), § 33, eff. March 1, 2004; 2009, No. 1 (Sp. Sess.), § H.19, eff. June 2, 2009; 2013, No. 73, § 59; 2015, No. 57, § 47; 2021, No. 105 (Adj. Sess.), § 498, eff. July 1, 2022.)

• § 3113a. Abandoned property; satisfaction of tax liabilities

  The Commissioner may request from the Office of the Treasurer the names and Social Security or federal identification numbers of apparent owners of presumed abandoned property prior to notice being given pursuant to 27 V.S.A. chapter 18, subchapter 5. If any apparent owner owes taxes to the State, the Commissioner, after notice to the owner, may request and the Treasurer shall transfer the abandoned property of the owner to the Department for setoff of the taxes owed. The notice shall advise the owner of the action being taken and the right to appeal the setoff if the tax debt is not the owner’s debt, or if the debt has been paid, or if the tax debt was appealed within 60 days from the date of the assessment and the appeal has not been finally determined, or if the debt was discharged in bankruptcy. (Added 2009, No. 1 (Sp. Sess.), § H.20, eff. June 2, 2009; amended 2021, No. 105 (Adj. Sess.), § 499, eff. July 1, 2022.)

• § 3113b. Lottery winnings; satisfaction of tax liabilities

  For all Vermont Lottery games, the Commissioner of Liquor and Lottery may, before issuing prize money to a winner, determine whether the winner has an outstanding tax liability payable to the Department of Taxes. If any such winner owes taxes to the State, the Commissioner of Taxes, after notice to the owner, may request and the Department of Liquor and Lottery shall transfer the amount of the tax liability to the Department for setoff of the taxes owed. The notice shall advise the winner of the action being taken and the right to appeal the setoff if the tax debt is not the winner’s debt, or if the debt has been paid, or if the tax debt was appealed within 60 days from the date of the assessment and the appeal has not been finally determined, or if the debt was discharged in bankruptcy. Any offset of Lottery winnings for taxes shall be third in priority to the offset of Lottery winnings to the Office of Child Support pursuant to 15 V.S.A. § 792 and the offset of Lottery winnings for restitution pursuant to 13 V.S.A. § 7043. (Added 2011, No. 45, § 1, eff. May 24, 2011; amended 2019, No. 73, § 44.)

• § 3114. Bonding requirements

  (a) When the Commissioner, in the Commissioner’s discretion, deems it necessary to protect the revenues collectible by the Commissioner, the Commissioner may require any person required to collect, withhold, remit, or pay any tax administered by the Commissioner, other than the personal income tax, to file with the Commissioner a bond, issued by a surety company authorized to transact business in this State and approved by the Commissioner of Financial Regulation of this State as to solvency and responsibility, in an amount fixed by the Commissioner, to secure the payment of any tax or penalties or interest due or that may become due from that person. In determining whether a person should be required to obtain a bond, the Commissioner is specifically authorized to consider the filing and payment history, with respect to any tax administered by the Commissioner, of such person or any individual, corporation, partnership, or other legal entity with which the person is or was associated as principal, partner, officer, director, employee, agent, or incorporator.

  (b) In the event that the Commissioner determines that the person is to file a bond, the Commissioner shall give notice to that effect, specifying the amount of the bond required and the period for which such bond is required. That person shall file a bond within five days after the giving of the notice unless within those five days the person shall request in writing a hearing before the Commissioner at which the necessity, propriety, and amount of the bond shall be determined by the Commissioner. The determination of the Commissioner shall be complied with within 15 days after the giving of notice. Any person aggrieved by a determination of the Commissioner may appeal from the determination in accordance with section 5885 of this title, but the determination of the Commissioner may be overturned on appeal only for abuse of discretion.

  (c) Notwithstanding any appeal to the Commissioner or to the courts, no person shall operate any trade or business with respect to which a bond has been demanded during any period for which the bond is not in effect. In case of operation in violation of this section, the Commissioner may cause to be posted, at every public entrance of the vendor’s premises, a notice identifying the person and the location and informing the public that the person has not filed a bond and that no business may be conducted at that location. No person shall cover or deface the posted notice, and the posted notice may not be removed until the bond is posted or removal is otherwise authorized by the Commissioner or a court.

  (d) In lieu of a bond, securities approved by the Commissioner or cash in an amount as the Commissioner may prescribe may be deposited, which shall be kept in the custody of the State Treasurer who may at any time upon instructions from the Commissioner without notice to the depositor apply them to any tax or interest or penalties due, and for that purpose the securities may be sold by the Commissioner at public or private sale without notice to the depositor. (Added 1985, No. 263 (Adj. Sess.), § 5, eff. June 4, 1986; amended 1989, No. 225 (Adj. Sess.), § 25(b); 1995, No. 180 (Adj. Sess.), § 38(a); 2005, No. 14, § 11, eff. May 3, 2005; 2011, No. 78 (Adj. Sess.), § 2; 2021, No. 105 (Adj. Sess.), § 500, eff. July 1, 2022.)

• § 3115. [Repealed.]

• Subchapter 002: ADMINISTRATION

• § 3201. Administration of taxes

  (a) Commissioner authority. In the administration of taxes, the Commissioner may:

  (1) Adopt, amend, and enforce reasonable rules and orders in administering the taxes within the Commissioner’s jurisdiction.

  (2) Delegate to any officer or employee in the Department powers the Commissioner deems necessary to carry out efficiently the tax provisions within the Commissioner’s jurisdiction.

  (3) Hold hearings, administer oaths, and examine under oath any person relating to that person’s business or relating to any matter within the Commissioner’s jurisdiction.

  (4) For the purpose of ascertaining the correctness of any return or making a determination of the tax liability of any taxpayer, examine or cause to be examined by any agent or representative designated by the Commissioner for that purpose any books, papers, records, or memoranda of the taxpayer bearing upon the matters required to be included in any return. The Commissioner or the Commissioner’s designated officers may require the attendance of the taxpayer or of any other person having knowledge in the premises at any place in the county where the taxpayer or person resides or has a place of business or in Washington County if the taxpayer is a nonresident individual, estate, or trust, or is a corporation or business entity not having a place of business in this State; may take testimony and require proof material; and may administer oaths or take acknowledgment in respect of any return or other information required by this title or the rules and decisions of the Commissioner. If an individual, estate, trust, corporation, or other business entity fails after request to provide books, records, or memoranda at either its place of business within the State or Washington County, the Commissioner may charge the person a reasonable per diem fee and expenses for the auditor making the examination out of state. The charges shall be payable within 30 days after the date billed and may be collected in the manner provided for the collection of taxes in this title.

  (5) Upon making a record of the reasons therefor, waive, reduce, or compromise any of the taxes, penalties, interest, or other charges or fees within the Commissioner’s jurisdiction.

  (6) Determine the form in which returns and reports shall be filed and what shall constitute a signature on returns and reports, including those filed in other than paper form, such as electronically or over telephone lines.

  (7) Assess, determine, revise, and readjust the taxes imposed in this title.

  (8) In cases in which payment of taxes is allowed or required by electronic funds transfer, allow up to six additional days for payment.

  (9) Attach property pursuant to section 3207 of this title for payment of an amount collectible by the Commissioner under this title any time after 90 days have run from the end of any applicable administrative appeal period on the underlying tax liability.

  (10) Garnish earnings pursuant to section 3208 of this title for payment of an amount collectible by the Commissioner under this title any time after 90 days have run from the end of any applicable administrative appeal period on the underlying tax liability.

  (b) Reciprocal enforcement.

  (1) At the request of the Commissioner, the Attorney General may bring suit in the name of this State in the appropriate court of any other state to collect any tax legally due this State.

  (2) The courts of this State shall recognize and enforce liabilities for taxes lawfully imposed by any other state that extends a like comity to this State, and the duly authorized officer of that state may sue for the collection of such a tax in the courts of this State. A certificate by the Secretary of State of the other state that an officer suing for collection of such a tax is duly authorized to collect it shall be conclusive proof of this authority.

  (3) As used in this section, the words “tax” and “taxes” include interest, fees, and penalties due under any taxing statute, and liability for the interest, fees, and penalties due under a taxing statute of another state shall be recognized and enforced by the courts of this State to the same extent that the laws of the other state permit the enforcement in its courts of liability for the interest, fees, and penalties due under a taxing statute of this State.

  (c) Reciprocal tax agreements. The Commissioner may enter into reciprocal agreements with the taxing authorities of other states, territories, provinces of Canada, countries, or the District of Columbia regarding the administration of taxes.

  (d) Tax return due dates. When the due date for the filing of a return falls on a federal or State holiday, the due date shall be the next business day after such holiday. A return that is filed by mail shall be accepted as timely filed if:

  (1) it is received by the Department within three business days after the due date; or

  (2) the taxpayer provides proof satisfactory to the Commissioner that the return was mailed by the due date.

  (e) Agreements with certified service providers. The Commissioner may enter into agreements with certified service providers, sellers using certified automated systems, and voluntary sellers for monetary allowances. The tax required to be paid to the Department shall be net of monetary allowances.

  (1) The allowance for a certified service provider shall be funded entirely from money collected by the provider and shall be either a base rate applied to taxable transactions processed by the provider or, for a period not to exceed 24 months following a voluntary seller’s registration through the streamlined sales tax agreement central registration process, a percentage of tax revenue generated for the State for which the seller does not have a requirement to register to collect the tax, or both.

  (2) The allowance for a seller using a certified automated system shall be for a period not to exceed 24 months following a seller’s voluntary registration and may include a base rate applied to taxable transactions and a percentage of tax revenue generated for the State for which the seller does not have a requirement to register to collect the tax.

  (3) The allowance for a voluntary seller shall be for a period not to exceed 24 months following a seller’s voluntary registration and shall be based on a percentage of tax revenue generated for the State for which the seller does not have a requirement to register to collect the tax. (Added 1991, No. 186 (Adj. Sess.), § 7, eff. May 7, 1992; amended 1993, No. 49, § 2, eff. May 28, 1993; 1995, No. 169 (Adj. Sess.), §§ 1, 2, eff. May 15, 1996; 1999, No. 49, §§ 41, 43, eff. June 2, 1999; 2003, No. 152 (Adj. Sess.), § 21, eff. date, see note below; 2007, No. 81, § 3, eff. July 1, 2008; 2009, No. 160 (Adj. Sess.), § 4, eff. June 4, 2010; 2015, No. 57, § 41; 2019, No. 14, § 76, eff. April 30, 2019; 2021, No. 105 (Adj. Sess.), § 501, eff. July 1, 2022; 2023, No. 6, § 373, eff. July 1, 2023.)

• § 3202. Interest and penalties

  (a) Failure to pay; interest. When a taxpayer fails to pay a tax liability imposed by this title (except the motor vehicle purchase and use tax) on the prescribed date of payment, the Commissioner may assess and the taxpayer shall then pay a sum of interest computed at the rate per annum established by the Commissioner pursuant to section 3108 of this title on the unpaid amount of that tax liability for the period from the prescribed date to the date of full payment of the liability.

  (b) Penalties.

  (1) Failure to file. When a taxpayer fails to file a tax return required by this title (other than a return required by chapter 151, subchapter 5 of this title for estimation of nonwithheld income tax), on the prescribed date of payment or the date as extended pursuant to section 5868 of this title, unless the taxpayer affirmatively shows that the failure is due to reasonable cause and not due to willful neglect, then in addition to any interest payable pursuant to subsection (a) of this section, the Commissioner may assess and the taxpayer shall then pay a penalty that shall be equal to five percent of the outstanding tax liability for each month, or portion thereof, that the tax return is not filed; provided, however, that in no event shall the amount of any penalty imposed under this subdivision exceed 25 percent of the tax liability unpaid on the prescribed date of payment. If the return is not filed within 60 days after the prescribed date of payment, there shall be assessed a minimum penalty of $50.00 regardless of whether there is a tax liability.

  (2) Failure to pay estimated tax. When a taxpayer fails to make payments as required by chapter 151, subchapter 5 or 5A of this title (estimations of nonwithheld income tax and quarterly filing and payment), the Commissioner may assess and the taxpayer shall then pay a penalty that shall be equal to one percent of the outstanding tax liability for each month, or portion thereof, that the tax liability is not paid in full; provided, however, that in no event shall the amount of any penalty assessed under this subdivision exceed 25 percent of the tax liability unpaid on the prescribed date of payment.

  (3) Failure to pay. When a taxpayer fails to pay a tax liability imposed by this title (other than a return required by chapter 151, subchapter 5 or 5A of this title for estimation of nonwithheld income tax and quarterly filing and payment) on the prescribed date of payment, then in addition to any interest payable pursuant to subsection (a) of this section, the Commissioner may assess and the taxpayer shall then pay a penalty that shall be equal to, for income tax under chapter 151, subchapters 2 and 3 of this title, one percent and, for all other taxes, five percent of the outstanding tax liability for each month, or portion thereof, that the tax liability is not paid in full; provided, however, that in no event shall the amount of any penalty assessed under this subdivision exceed 25 percent of the tax liability unpaid on the prescribed date of payment.

  (4) Negligent failure to pay. When a taxpayer fails to pay a tax liability imposed by this title and the failure is due to negligence or constitutes a substantial understatement of tax, in addition to any interest payable pursuant to subsection (a) of this section, the Commissioner may assess and the taxpayer shall then pay a penalty that shall be equal to 25 percent of that portion of the underpayment. For purposes of this subdivision, “negligence” means any failure to make a reasonable attempt to comply with the provisions of the tax code and “substantial understatement” means an understatement of 20 percent or more of the tax.

  (5) Fraudulent failure to pay. When a taxpayer fraudulently or with willful intent to defeat or evade a tax liability imposed by this title fails to pay a tax liability on the prescribed date of payment, requests and receives a refund of a tax liability, or requests but does not receive a refund of a tax liability, then, in addition to any interest payable pursuant to subsection (a) of this section, the Commissioner may assess and the taxpayer shall then pay a penalty equal to the amount of the tax liability unpaid on the prescribed date of payment, the amount received as a refund subsequent to that date, or the amount requested but not received as a refund.

  (6) Violation based on income from illegal activity. The penalties provided in subdivisions (1)–(5) of this subsection shall be doubled if the violation is based on income derived from illegal activity. The penalty provided in this subdivision shall be in addition to any other civil or criminal penalties provided by law.

  (7) Penalty limitation. A failure to pay shall not be subject to more than one of the penalties set forth in subdivisions (3), (4), and (5) of this subsection. (Added 1997, No. 156 (Adj. Sess.), § 35, eff. April 29, 1998; amended 2001, No. 140 (Adj. Sess.), §§ 9, 11, eff. June 21, 2002; 2013, No. 76, § 6; 2019, No. 175 (Adj. Sess.), § 22, eff. Oct. 8, 2020; 2021, No. 105 (Adj. Sess.), § 502, eff. July 1, 2022; 2021, No. 179 (Adj. Sess.), § 4, eff. January 1, 2022; 2023, No. 6, § 374, eff. July 1, 2023.)

• § 3203. Notice of deficiencies; assessment of penalties and interest; denial of refund

  If the Commissioner finds that any taxpayer has failed to discharge in full the amount of any tax liability incurred under this title or has claimed a refund in error or that a penalty or interest should be assessed under this title, the Commissioner shall notify the taxpayer of the deficiency or denial of refund or assess the penalty or interest, as the case may be, by mail. The mailing of the notice shall be presumptive evidence of its receipt by the person to whom it is addressed. Any period of time that is determined under this chapter by the giving of notice shall commence to run from the date of mailing of the notice. (Added 1997, No. 156 (Adj. Sess.), § 36, eff. April 29, 1998; amended 2007, No. 190 (Adj. Sess.), § 20, eff. June 6, 2008.)

• § 3204. Processing fee

  A manual processing fee of $25.00 may be assessed against any taxpayer who files or on whose behalf is filed an unacceptable return or against any paid preparer who files an unacceptable return on behalf of a taxpayer. An unacceptable return is one that is not on a form issued by or approved by the Commissioner or that requires the Department to take steps in addition to its normal processing procedures to process. The Department may reduce any refund due the taxpayer by the amount of the fee. (Added 1997, No. 156 (Adj. Sess.), § 38, eff. April 29, 1998.)

• § 3205. Taxpayer Advocate

  (a) There is established within the Department of Taxes an Office of the Taxpayer Advocate.

  (b) The Taxpayer Advocate shall have the following functions and duties:

  (1) identify subject areas where taxpayers have difficulties interacting with the Department of Taxes;

  (2) identify classes of taxpayers or specific business sectors who have common problems related to the Department of Taxes;

  (3) propose solutions, including administrative changes to practices and procedures of the Department of Taxes;

  (4) recommend legislative action as may be appropriate to resolve problems encountered by taxpayers;

  (5) educate taxpayers concerning their rights and responsibilities under Vermont’s tax laws;

  (6) educate tax professionals concerning the Department of Taxes’ rules and interpretations by issuing bulletins and other written materials; and

  (7) assist individual taxpayers in resolving disputes with the Department of Taxes.

  (c) The Taxpayer Advocate shall prepare an annual report detailing the actions the Taxpayer Advocate has taken to improve taxpayer services and the responsiveness of the Department of Taxes. The report shall identify the problems encountered by taxpayers in interacting with the Department of Taxes and include specific recommendations for administrative and legislative actions to resolve those problems. The report shall identify any problems that span an entire class of taxpayer or specific industry and propose class- or industry-wide solutions. The report of the Taxpayer Advocate shall be submitted to the Senate Committee on Finance and the House Committee on Ways and Means on or before January 15 of each year. The provisions of 2 V.S.A. § 20(d) (expiration of required reports) shall not apply to the required report to be made under this subsection.

  (d) [Repealed.] (Added 2011, No. 45, § 36e, eff. May 24, 2011; amended 2011, No. 143 (Adj. Sess.), § 6, eff. May 15, 2012; 2015, No. 131 (Adj. Sess.), § 8; 2021, No. 20, § 263; 2021, No. 105 (Adj. Sess.), § 503, eff. July 1, 2022.)

• § 3206. Recommendation for extraordinary relief

  (a) The Taxpayer Advocate may make a written recommendation for extraordinary relief to the Commissioner under the provisions of this section. A recommendation for extraordinary relief may be made only in response to a request from a taxpayer and after a thorough investigation of the taxpayer’s circumstances by the Taxpayer Advocate that results in findings by the Taxpayer Advocate that:

  (1) Vermont tax laws apply to the taxpayer’s circumstances in a way that is unfair and unforeseen or that results in significant hardship; and

  (2) the taxpayer has no available appeal rights or administrative remedies to correct the issue that led to such unfair result or hardship.

  (b) As used in this section, “extraordinary relief” means a remedy that is within the power of the Commissioner to grant under this title, a remedy that compensates for the result of inaccurate classification of property as homestead or nonhomestead pursuant to section 5410 of this title through no fault of the taxpayer, or a remedy that makes changes to a taxpayer’s property tax credit or renter credit claim necessary to remedy the problem identified by the Taxpayer Advocate.

  (c) Notwithstanding any other provision of law, if, in response to the Taxpayer Advocate’s recommendation, the Commissioner determines that the taxpayer should receive a refund or other monetary adjustment, the Commissioner shall certify that amount to the Commissioner of Finance and Management who shall issue his or her warrant in favor of the taxpayer for payment by the Treasurer from the appropriate fund.

  (d) A recommendation for extraordinary relief shall be in writing, shall be addressed to the Commissioner, and shall include a description of the problem sought to be remedied along with specific recommendations to the Commissioner. The Taxpayer Advocate’s decision to make or not make a recommendation for extraordinary relief shall be final and not subject to review.

  (e) The Commissioner may choose to act on the recommendation of the Taxpayer Advocate, not act on the recommendation, or act on part of the Taxpayer Advocate’s recommendation, and the Commissioner’s decision shall be final and not subject to any further review. Nothing in this section shall be construed to limit any other power or authority granted to the Commissioner in this title. (Added 2011, No. 143 (Adj. Sess.), § 8; amended 2019, No. 160 (Adj. Sess.), § 8, eff. Jan. 1, 2021.)

• § 3207. Administrative attachment

  (a) Notwithstanding other statutes that provide for levy of execution, trustee process, and attachment, the Commissioner, pursuant to this section, may attach tangible and intangible property of a taxpayer to satisfy amounts collectible by the Commissioner under this title by transmitting a notice of attachment to a financial institution or person holding property belonging to or owed to a taxpayer.

  (b) The Commissioner may contact a financial institution to obtain verification of the account number, the names, and Social Security numbers listed for an account, and account balances of accounts held by a delinquent taxpayer. A financial institution is immune from any liability for release of this information to the Commissioner.

  (c) At least 30 days prior to attaching a taxpayer’s property, the Commissioner shall demand payment from the taxpayer together with notice that the taxpayer is subject to attachment of property under this section. This notice shall be sent by first-class mail to the taxpayer’s last known address. The mailing of the notice shall be presumptive evidence of its receipt.

  (d) A notice of attachment shall direct the financial institution or person to transmit all or a portion of the property in the taxpayer’s accounts or owed to the taxpayer to the Commissioner up to the amount owed to the Commissioner. The notice shall identify the taxpayer by Social Security number or federal employer identification number. Upon receipt of the notice, the financial institution or person forthwith shall remit the amount stated in the notice or the amount held or owned by such financial institution or person, whichever is less, to the Commissioner. Notwithstanding the foregoing, any financial institution shall surrender any deposits in such bank only after 21 days after transmittal of the notice of attachment. During the 21-day hold period, the financial institution shall not release the attached funds to the taxpayer unless the Commissioner releases the attachment. A financial institution is immune from any liability due to compliance with the Commissioner’s notice of attachment.

  (e) A copy of the notice of attachment transmitted to the financial institution or person holding property due to the taxpayer shall be sent by certified mail to the taxpayer at the time it is transmitted to the financial institution or person. The taxpayer may, within 15 days of mailing, petition the Commissioner in writing for a hearing under this section. The Commissioner shall grant a hearing on the matter as provided in subsection 5885(a) of this title at which the taxpayer bears the burden of proof. The Commissioner shall notify the taxpayer in writing of his or her decision concerning the attachment and the taxpayer may appeal in the manner provided in subsection 5885(b) of this title, which shall be the taxpayer’s exclusive remedy with respect to an attachment under this section.

  (f) At a hearing under this section, the taxpayer may raise the following claims relating to the proposed attachment:

  (1) whether the notice of attachment has identified the wrong taxpayer;

  (2) whether the proposed attachment includes property that would be exempt from attachment and levy under 12 V.S.A. § 2740 in a judicial attachment;

  (3) the statute of limitations to collect the liability expired before the notice of attachment was sent; and

  (4) the taxpayer may propose a collection alternative, including a payment plan or offer in compromise, but only if there has been a change in the taxpayer’s Vermont tax liability based on a change in his or her federal tax liability since the Vermont liability was assessed.

  (g) The hearing under this section shall be conducted by an officer or employee who is not an employee of the Compliance Division of the Department of Taxes.

  (h) If a hearing is requested in a timely manner under this section, the attachment shall be suspended and the financial institution shall not release the attached funds for the period during which the appeal is pending.

  (i) After a hearing, the taxpayer may propose a collection alternative, including a payment plan or offer in compromise, but only if there has been a change in the taxpayer’s federal tax liability or on a change in the amount that is subject to attachment as a result of the hearing.

  (j) Attachment under this section and other collection measures provided by law are cumulative.

  (k) The Commissioner forthwith shall notify the financial institution in writing and the financial institution shall cease attachment:

  (1) upon full payment of the amounts collectible by the Commissioner; or

  (2) when the attachment exceeds the amount permissible under 12 V.S.A. § 2740.

  (l) A determination under subdivision 5888(1) of this title will be reflected in the amounts collectible by the Commissioner.

  (m) As used in this section:

  (1) “Financial institution” includes financial institutions as defined in 8 V.S.A. § 11101(32) and credit unions as defined in 8 V.S.A. § 30101(5).

  (2) “Intangible property” means property that has no intrinsic value but is merely the representative of value, such as cash, accounts, rents, stocks, bonds, promissory notes, or other instruments that create a payment obligation.

  (3) “Person” has the same meaning as in section 3001 of this title.

  (n) The Commissioner shall contract with an outside independent organization or enter into a memorandum of understanding with a different State agency to provide advocate services to taxpayers subject to the provisions of this section. The organization or agency providing the services shall be independent of the Department of Taxes. The advocate services provided under this subsection shall include technical assistance and representation in the administrative processes and hearings under this section. (Added 2015, No. 57, § 42.)

• § 3208. Administrative garnishment

  (a) Notwithstanding other statutes that provide for levy or execution, trustee process, or attachment, the Commissioner may garnish a taxpayer’s earnings pursuant to this section to satisfy amounts collectible by the Commissioner under this title, subject to the exemptions provided in 12 V.S.A. § 3170(a) and (b)(1).

  (b) The Commissioner may contact an employer to obtain verification of a delinquent taxpayer’s employment, earnings, deductions, and payment frequency as necessary to determine disposable earnings. The employer shall be immune from any liability for release of this information to the Commissioner.

  (c) At least 30 days prior to initiating wage garnishment, the Commissioner shall demand payment from the taxpayer and notify the taxpayer that he or she is subject to garnishment under this section. This notice shall be sent by first-class mail to the taxpayer’s last known address. The mailing of notice shall be presumptive evidence of receipt.

  (d) After 30 days, a notice of garnishment shall be sent by certified mail to the taxpayer, and the taxpayer may, within 15 days of mailing, petition the Commissioner in writing for a hearing under this section. The Commissioner shall grant a hearing on the matter as provided in subsection 5885(a) of this title at which the taxpayer bears the burden of proof. The Commissioner shall notify the taxpayer in writing of his or her decision concerning the garnishment and the taxpayer may appeal in the manner provided in subsection 5885(b) of this title. This shall be the taxpayer’s exclusive remedy with respect to a garnishment under this section.

  (e) If, after 15 days, the taxpayer has not petitioned for a hearing, a notice of garnishment shall direct an employer to transmit a specified portion of the taxpayer’s disposable earnings to the Commissioner from each periodic payment that is due to the taxpayer until the taxpayer’s obligation is paid in full. The notice shall identify the taxpayer by Social Security number. An employer is immune from any liability due to compliance with the Commissioner’s notice of garnishment.

  (f) If a hearing is requested in a timely manner under this section, the garnishment that is the subject of the requested hearing shall be suspended for the period during which such appeal is pending. Fifteen days after an appeal is resolved, the notice of garnishment shall direct an employer to transmit a specified portion of the taxpayer’s disposable earnings to the Commissioner from each periodic payment that is due to the taxpayer until the taxpayer’s obligation is paid in full. The notice shall identify the taxpayer by Social Security number.

  (g) At a hearing under this section, the taxpayer may raise any relevant issue relating to the unpaid tax or the proposed attachment:

  (1) whether the notice of garnishment has identified the wrong taxpayer;

  (2) whether the garnishment exceeds the exemption amount, which shall be 80 percent of the debtor’s weekly disposable earnings or 40 times the federal minimum hourly wage, whichever is greater;

  (3) whether the garnishment exceeds the amount permissible under 12 V.S.A. § 3170(a); or

  (4) the statute of limitations to collect the liability expired before the notice of attachment was sent.

  (h) The hearing under this section shall be conducted by an officer or employee who is not an employee of the Compliance Division of the Department of Taxes.

  (i) An employer’s obligation to transmit garnished wages to the Commissioner shall begin with the first periodic payment of earnings following receipt of the notice of garnishment unless the notice is withdrawn by the Commissioner. An employer who fails to withhold and transmit the garnished earnings to the Commissioner shall be liable for such amounts and may be assessed in the same manner as withholding taxes are assessed under chapter 151 of this title. As soon as reasonably practicable, the employer shall notify the Commissioner of the termination of the taxpayer’s employment. No taxpayer may be discharged from employment on account of garnishment under this section against the taxpayer’s wages.

  (j) The Commissioner forthwith shall notify the employer in writing and the employer shall cease withholding from the earnings of the taxpayer:

  (1) upon full payment of the amounts collectible by the Commissioner; or

  (2) when the garnishment exceeds the amount permissible under 12 V.S.A. § 3170(a) and (b)(1).

  (k) Wage garnishment under this section and other collection measures provided by law are cumulative.

  (l) A determination under subdivision 5888(1) of this title will be reflected in the amounts collectible by the Commissioner.

  (m) As used in this section:

  (1) “Disposable earnings” means that part of the earnings of any individual remaining after the deduction from those earnings of any amounts required by law to be withheld and the amount of any wage garnishment payable to the Office of Child Support.

  (2) “Earnings” means compensation paid or payable for personal services, whether denominated as wages, salary, commission, bonus, or otherwise, and includes periodic payments pursuant to a pension or retirement program and proceeds from the sale of milk with respect to an individual engaged in the occupation of farming, but does not include payments from sources that by law are exempt from attachment.

  (n) The Commissioner shall contract with an outside independent organization or enter into a memorandum of understanding with a different State agency to provide advocate services to taxpayers subject to the provisions of this section. The organization or agency providing the services shall be independent of the Department of Taxes. The advocate services provided under this subsection shall include technical assistance and representation in the administrative processes and hearings under this section. (Added 2015, No. 57, § 43; amended 2015, No. 134 (Adj. Sess.), § 2, eff. May 25, 2016.)

• § 3209. Tax Computer System Modernization Fund

  (a) The Tax Computer System Modernization Fund #21909, as established in the State Treasury per 2007 Acts and Resolves No. 65, Sec. 282 as amended, is a special fund to support information technology improvements and initiatives of the Department of Taxes. Balances in the Fund shall be administered by the Department of Taxes and used exclusively for the purposes prescribed in subsection (c) of this section. Balances in the Fund at the end of each fiscal year shall be carried forward and remain part of the Fund. Interest earned by the Fund shall be deposited into the Fund.

  (b) The Fund shall receive annual transfers from the General Fund and the Education Fund in amounts not to exceed 0.21 percent of total revenue collected in the prior fiscal year by the Department of Taxes. The fund may receive other receipts as directed or authorized by the General Assembly.

  (c) The Fund shall be used for the development, implementation, enhancement, and maintenance of information technology systems and services for the administration of taxes and programs administered by the Department. This shall include requests for proposal, business requirements, analysis, implementation of new tax types, enhancements to existing systems, and payments due to vendors of information technology systems and services.

  (d) The Commissioner of Taxes shall submit an annual report on the receipts, expenditures, and balances in the Tax Computer System Modernization Fund to the Joint Fiscal Committee each year at or prior to the Committee’s November meeting each year. (Added 2023, No. 78, § E.111.1, eff. July 1, 2023.)

• Subchapter 006: ENFORCEMENT

• § 3260. Bulk sales

  (a) Whenever a person (transferor) required to collect or withhold a trust tax pursuant to chapter 151, 225, or 233 of this title shall make any sale, transfer, long-term lease, or assignment (transfer) in bulk of any part or the whole of the assets of a business, otherwise than in the ordinary course of the business, the purchaser, transferee or assignee (transferee) shall, at least 10 days before taking possession of the subject of the transfer or before payment therefore if earlier, notify the Commissioner in writing of the proposed sale and of the price, terms, and conditions thereof whether or not the transferor has represented to or informed the transferee that the transferor owes any trust tax pursuant to chapter 151, 225, or 233 and whether or not the transferee has knowledge that such taxes are owed, and whether any taxes are in fact owed.

  (b) Whenever the transferee shall fail to give notice to the Commissioner as required by subsection (a) of this section, or whenever the Commissioner shall inform the transferee that a possible claim for tax exists, any sums of money, property, or choses in action, or other consideration, which the transferee is required to transfer over to or for the transferor, shall be subject to a first priority right and lien for any taxes theretofore or thereafter determined to be due from the transferor to the State, and the transferee is forbidden to transfer the consideration to or for the transferor to the extent of the amount of the State’s claim.

  (c) For failure to comply with this section, the transferee shall be personally liable for the payment to the State of any taxes theretofore or thereafter determined to be due to the State from the transferor and the liability may be assessed and enforced in the same manner as the liability for tax under chapter 151, 225, or 233. (Added 1991, No. 186 (Adj. Sess.), § 9; amended 2003, No. 70 (Adj. Sess.), § 34, eff. March 1, 2004.)

• § 3261. [Reserved for future use]

• § 3262. Lien fees; service of process costs; electronic filing of liens

  (a) Notwithstanding section 502 of this title, the Commissioner may charge against any collection of any liability any related lien fees specified in subdivision 1671(a)(6) or subsection 1671(c) of this title and any related service of process costs awarded to the Department and paid by the Commissioner. Fees and costs collected under this section shall be credited to a special fund established and managed pursuant to chapter 7, subchapter 5 of this title and shall be available as payment for the fees of the clerk of the municipality and the costs of service.

  (b) The Commissioner may file notice of any lien arising in favor of the State due to nonpayment of taxes with the clerk of a municipality in which the property subject to lien is located in electronic format, and such lien shall have the same force and effect as a lien filed in paper form. (Added 1991, No. 234 (Adj. Sess.), § 3; amended 1997, No. 59, § 9, eff. June 30, 1997; 2007, No. 190 (Adj. Sess.), § 1, eff. June 6, 2008; 2013, No. 73, § 7.)

• Subchapter 007: COLLECTIONS

• § 3301. Collections Unit

  (a) There is established within the Department of Taxes a Collections Unit. The primary purpose of the Collections Unit is to enforce and collect debt owed the State, including tax debts and debts certified to the Department of Taxes from other branches, agencies, or subdivisions of government under this subchapter.

  (b) The Collections Unit shall:

  (1) employ such staff as is necessary, subject to the approval of the Commissioner of Taxes;

  (2) adopt rules under 3 V.S.A. chapter 25 to provide for the uniform administration of the collection of State debt;

  (3) collect tax deficiencies owed the State, including those under chapter 151, subchapters 8 and 9 of this title;

  (4) administer the system of tax debt setoff in chapter 151, subchapter 12 of this title;

  (5) administer the system of tax intercepts under section 3113 of this title; and

  (6) collect debts referred from agencies or from other branches or subdivisions of State government under this subchapter. (Added 2015, No. 57, § 45, eff. July 1, 2016.)

• § 3302. Debt referral

  (a) An agency or any other branch or subdivision of State government may enter into an agreement with the Department of Taxes to collect any debt, other than debts related to property taxes under chapters 123 through 135 of this title, of $50.00 or more under the procedures established by this subchapter.

  (b) Any agreement shall contain the following provisions:

  (1) a process for ensuring that the debt is final, and not subject to any negotiation for settlement;

  (2) a process for providing the Department with information necessary to identify each debtor and for certifying in writing the amount of each debt submitted to the Department for collection, along with any other information as the Commissioner shall require;

  (3) a hierarchy of payments made from debts collected; and

  (4) any other provisions necessary to allow the Department of Taxes to collect the referred debt. (Added 2015, No. 57, § 45, eff. July 1, 2016.)

• § 3303. Collection powers and process

  The Collections Unit in collecting debt required under this chapter shall have the following enforcement powers at its disposal:

  (1) any enforcement tool available to the referring agency, in the name of that agency; and

  (2) any enforcement tools for collection of tax debts under this title. (Added 2015, No. 57, § 45, eff. July 1, 2016.)