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Subchapter 001: SUBJECTS AND MANNER OF TAXATION
§ 3601. Repealed.
§ 3602. Manufacturing machinery
Engines and boilers, electric motors, air compressors, traveling cranes, and machinery,
so fitted and attached as to be a part of a manufacturing or other plant and kept
and used as such, shall be set in the grand list as real estate.
§ 3602a. Facilities used in the generation, transmission, or distribution of electric power
All structures, machinery, poles, wires, and fixtures of all kinds and descriptions
used in the generation, transmission, or distribution of electric power that are so
fitted and attached as to be part of the works or facilities used to generate, transmit,
or distribute electric power shall be set in the grand list as real estate. Nothing
in this section shall alter the scope of the exemptions in subdivisions 3803(2) and 3802(19) of this title, nor shall it alter the taxation of municipally owned improvements accorded by section 3659 of this title. (Added 1999, No. 49, § 24, eff. June 2, 1999; amended 2021, No. 71, § 14.)
§ 3602b. Communications property [Effective July 1, 2026]
(a) All communications property shall be set in the grand list as real estate.
(b) Communications property owned by a nonmunicipal communications service provider shall
be taxed at appraisal value as defined in section 3481 of this title.
(c) As used in this section, “communications property” means tangible personal property
used to enable the real-time, two-way, electromagnetic transmission of information,
such as audio, video, and data, that is so fitted and attached as to be part of a
local, state, national, or international communications network, as well as facilities
that are part of a cable television system as defined in 30 V.S.A. § 501(2). The term includes wires, cables, conduit, pipes, antennas, poles, and wireless towers.
(d)(1) On or before May 1 of each year, the Division of Property Valuation and Review of
the Department of Taxes shall provide the listers in each municipality with the valuation
of all taxable communications property of any communications service provider situated
therein as reported by such provider to the Division.
(2) On or before March 31 of each year, each communications service provider shall submit
to the Division a sworn inventory of all its taxable communications property in a
form that identifies the valuation of its property in each municipality.
(3) The Division shall prescribe the form of the inventory required under subdivision
(2) of this subsection and the officer or officers who shall submit the sworn inventory.
(4) The valuations provided to the listers pursuant to this section shall be used by the
listers in determining and fixing the valuations of communications property for the
purposes of property taxation. (Added 2023, No. 145 (Adj. Sess.), § 10, eff. July 1, 2026.)
§ 3603. Construction equipment
(a) Construction equipment and other personal estate used in the construction or repair
of highways, dams, reservoirs, public utilities, or buildings shall be listed and
taxed on the same basis as other personal estate in the town in which it is located
on April 1. Such equipment brought into the State after April 1 and prior to December
15 of any year shall be taxed as other personal estate for that year in the town in
which it is first used for a normal full work shift. The owner or person in charge
of any equipment enumerated in this section shall, upon request of the Treasurer or
tax collector of any municipality, present evidence that it has been listed for tax
purposes in a municipality in this State. The Transportation Board and other State
agencies shall insert in all contracts for construction a term by which the contractor
agrees to pay taxes assessed under this section and section 4151 of this title.
(b) Nothing in this section shall be construed to tax as personal property registered
automobiles or motor vehicles owned or used by public utilities authorized to do business
in the State in the maintenance or construction of their properties nor shall this
section be construed to amend section 3802 of this title. (Amended 1963, No. 92, §§ 1, 2, eff. May 14, 1963; 1977, No. 23, § 1, eff. March 29, 1977; 2021, No. 105 (Adj. Sess.), § 513, eff. July 1, 2022.)
§ 3604. Mines and quarries
The interest of a grantee in severance from surface ownership in mines, quarries,
or the right of mining and quarrying, shall be set in the list as real estate, but
this section shall not apply to leases named in section 3609 of this title.
§ 3605. Water rights
The interest of an owner in water rights, power rights, and flowage rights, or any
of such rights, owned by severance from real estate interests set in the grand list
to another and in connection with which such rights exist, shall be appraised and
set in the grand list as real estate to the owner of such rights. This section shall
not be construed so as to affect any exemptions from taxation granted under any existing
statute.
§ 3606. Standing timber
The sale or conveyance of standing timber shall not affect the valuation of the underlying
land. (Amended 1997, No. 71 (Adj. Sess.), § 7c, eff. Jan. 1, 1998.)
§ 3607. Orchard lands
When the owner of land, cultivated or uncultivated, has planted the same to fruit
trees, such land shall continue to be set in the list at the same valuation as similar
land not so planted, but that is used for general agricultural purposes. Increase
in the valuation of such land for taxation shall not be made for 15 years on account
of trees growing thereon.
§ 3607a. Barns, silos, and other farm structures
Barns, silos, sugarhouses, and bunkers used for silage storage shall be entered in
the grand list at fair market value as defined in subdivision 3481(1) of this title, except that by a majority vote of those present and voting at an annual or special
meeting warned for the purpose, a municipality may elect to exempt, or to appraise
at less than fair market value, barns, silos, sugarhouses, and bunkers used for silage
storage located within the municipality that are owned or leased by a farmer as defined
in subdivision 3752(7) of this title and used by the farmer as part of a farming operation. An election to exempt or to
reduce appraisals made under this section shall remain in effect for future tax years
until amended or repealed by a similar vote of the municipality. (Added 1983, No. 215 (Adj. Sess.), § 3, eff. May 10, 1984; amended 1987, No. 249 (Adj. Sess.).)
§ 3608. Buildings on leased land
Buildings on leased land or on land not owned by the owner of the buildings shall
be set in the list as real estate.
§ 3609. Perpetual or redeemable leases
Perpetual or redeemable leases upon which rent is reserved, except of lands exempt
from taxation, shall have an appraisal value as personal estate at a sum of which
the rent is six percent. (Amended 1965, No. 45.)
§ 3610. Taxation of perpetual leased lands
(a) The term “perpetual lease” as used in this section includes every leasehold interest
in land located in Vermont, and every estate in Vermont land other than fee simple
absolute, arising out of or created by an instrument of lease that conveys to a person
designated as lessee, the lessee’s heirs, executors, administrators, and assigns,
the right to possess, enjoy, and use the land in perpetuity or substantially in perpetuity,
whether or not the instrument of lease contains restrictions on the use of the subject
land by the person designated as lessee and whether or not the subject land may be
repossessed by the owner because of nonpayment of rent or of other default under the
instrument of lease. The term “lessee” as used in this section means the person entitled
to possess, enjoy, and use land subject to a perpetual lease.
(b) The listers of each town and the appraisers of each unorganized town and gore shall
list every perpetual lease in a separate record in which shall be shown as to each
lease a brief description of the leased land, the fair market value of the land as
appraised by them, the name of the lessor, the annual rental payable under the lease,
and as of April 1 of each year the name and address of the lessee. If for any reason
the lease is exempt under subsection (d) of this section, the reason for the exemption
shall be noted.
(c) For purposes of section 3481 of this title, the appraised value of each perpetual lease not exempt under subsection (d) of this
section shall be its market value as determined by the listers or appraisers, taking
into consideration all limitations upon the use of the land by the lessee that substantially
diminish the value of the lessee’s right to occupy, use, or enjoy the land; but in
no event is the appraised value of a perpetual lease to be in excess of the fair market
value of the subject land as determined by the listers or appraisers.
(d) A perpetual lease is exempt from taxation against the lessee if so provided by an
express term of the original grant of the subject land by the State of Vermont, or
by a statute in effect at the time of the grant providing for exemption in perpetuity
of the leases, or if the subject land would be exempt under chapter 125 of this title
if the lessee were the owner of the land.
(e) Except as provided in subsection (d) of this section, every perpetual lease, whether
or not the subject land is exempt from taxation, shall be set in the grand list as
real estate against the lessee.
(f) The annual rental payable under a perpetual lease shall be credited in each year against
the tax payable in respect of that lease to the town in which the subject land is
located.
(g) Any tax levied by authority of this section shall be collected in the same manner
as real estate taxes. The selectboard, treasurer, and collector of taxes have the
same authority and are subject to the same duties, requirements and penalties with
respect to the collection of the tax as is provided in the case of real estate taxes.
A town may vote to collect interest on overdue taxes and for the payment of the taxes
by installments as in the case of real estate taxes.
(h) Commencing with the date of the filing by the listers of the grand list in the office
of the town clerk, taxes lawfully assessed upon a perpetual lease shall be a first
lien thereon, underlying all mortgages, assignments, attachments, liens, or other
encumbrances thereon, and all subleases for the term of a natural life or lives, for
a term of years or for any other duration. The tax lien shall remain in full force
and effect for a period of 15 years, and it may be enforced separately against the
perpetual lease in each parcel of the subject real estate. Notice to all parties having
an interest in the perpetual lease shall be given as provided by law or as directed
by courts. Courts of law may issue execution, as the facts warrant, to impress the
tax lien upon the perpetual lease.
(i) A perpetual lease is subject to sale in the same manner and subject to the same procedures,
notices, defenses, and statutes of limitations as in the case of tax sales of real
estate. Any person acquiring a perpetual lease, under the authority of this section,
is subject to the person’s portion of the annual rental due the grantee. (Added 1967, No. 366 (Adj. Sess.), § 1; amended 2021, No. 105 (Adj. Sess.), § 514, eff. July 1, 2022.)
§ 3611. Assessment against State easements for flood control projects
Lands over which the State has acquired or reserved an easement of flowage in the
completion of its flood control projects shall be set in the grand list of the town
to the owners thereof subject to such easement of flowage. The difference between
the grand list so fixed and the grand list based on the appraisal next preceding the
acquisition of such flowage rights by the State of Vermont, shall be set in the grand
list to the State of Vermont. Taxes assessed thereon shall be paid out of the General
Fund. (Amended 1957, No. 219, § 2, eff. July 1, 1961.)
§ 3612. Owner’s improvements
In the event improvements shall be put on such land after acquisition of an easement
of flowage by the State of Vermont in the completion of its flood control projects,
such improvements shall be set in the grand list to the then owner of the land but
shall not alter or change the grand list of the State on such flowage easements.
§ 3613. Appeal
The State of Vermont shall have the same right to appeal from the appraisal of the
listers and from the decision of the Board of Civil Authority as is given to any interested
individual as provided by chapter 131 of this title.
§ 3614. Property on federal land
Property of a railway or other corporation having a right-of-way over or location
upon lands acquired by the United States shall be taxed as other similar property.
§§ 3615, 3616. Repealed. 1979, No. 203 (Adj. Sess.), § 5, eff. May 7, 1980.
§ 3617. Repealed. 1991, No. 203 (Adj. Sess.), § 1, eff. May 27, 1992.
§ 3618. Business personal property
(a) If a town does not vote to exempt business personal property under section 3849 of this title, such property shall be appraised at fair market value; or, subject to a majority
vote of those present and voting at an annual or special meeting warned for the purpose,
a town may provide that business personal property shall be appraised for any taxable
year according to either of the following methods, which may be elected at the option
of the taxpayer:
(1) At 50 percent of its cost during the time that it has not been fully depreciated for
federal income tax purposes under the laws of the United States. After the property
has been thus depreciated, exclusive of salvage value, for federal income tax purposes,
it shall be appraised at 10 percent of its cost;
(2) At its net book value during the time that it has not been depreciated to 10 percent
of its cost or less for federal income tax purposes under the laws of the United States.
After the property has been depreciated to 10 percent of its cost or less, exclusive
of salvage value, for federal income tax purposes, it shall be appraised at 10 percent
of its cost. Business personal property manufactured by the taxpayer for his or her
own use, shall be valued at the net book value for federal income tax purposes under
the laws of the United States. After the property has been depreciated to 10 percent
of its cost or less, exclusive of salvage value, for federal income tax purposes,
it shall be appraised at 10 percent of its cost.
(b) The taxpayer may elect either of the methods set forth in subsection (a) of this section
in the first year for which this election is effective. In any subsequent year the
taxpayer may not change the method elected in the previous year except with the prior
permission of the board of listers. All of the taxpayer’s business personal property
shall be valued for any year according to only one of the two methods. Adjustments
by the taxpayer or the federal authorities of the depreciation allowed or allowable
on the property, for federal income tax purposes, shall not affect or change the appraisal
of the property under this section for any year as to which, at the time of the adjustment
in depreciation, the grand list has been lodged as required by section 4151 of this title.
(c) As used in this section:
[Subdivision (c)(1) effective until July 1, 2026; see also subdivision (c)(1) effective
July 1, 2026 set out below.]
(1) “Business personal property” means tangible personal property of a depreciable nature
used or held for use in any trade, business, professional practice, transaction, activity,
or occupation conducted for profit, including all furniture and fixtures, apparatus,
tools, implements, books, machines, boats, construction devices, and all personal
property used or intended to be used for the production, processing, fabrication,
assembling, handling, or transportation of anything of value, or for the production,
transmission, control, or disposition of power, energy, heat, light, water, or waste.
“Business personal property” does not include inventory, or goods and chattels so
affixed to real property as to have become part thereof, and that are therefore not
severable or removable without material injury to the real property, nor does it include
poles, lines, and fixtures that are taxable under sections 3620 and 3659 of this title.
[Subdivision (c)(1) effective July 1, 2026; see also subdivision (c)(1) effective until
July 1, 2026 set out above.]
(1) “Business personal property” means tangible personal property of a depreciable nature
used or held for use in any trade, business, professional practice, transaction, activity,
or occupation conducted for profit, including all furniture and fixtures, apparatus,
tools, implements, books, machines, boats, construction devices, and all personal
property used or intended to be used for the production, processing, fabrication,
assembling, handling, or transportation of anything of value, or for the production,
transmission, control, or disposition of power, energy, heat, light, water, or waste.
“Business personal property” does not include inventory, or goods and chattels so
affixed to real property as to have become part thereof, and that are therefore not
severable or removable without material injury to the real property, nor does it include
poles, lines, and fixtures that are taxable under sections 3620 and 3659 of this title, nor does it include communications property taxable under section 3602b of this title.
(2) “Net book value” of property means the cost less depreciation of the property as shown
on the federal income tax return required to be filed with the federal authorities
on or nearest in advance of April 1 in any year. (Added 1975, No. 101, § 2, eff. April 30, 1975; amended 1985, No. 169 (Adj. Sess.), § 3, eff. May 5, 1986; 1991, No. 203 (Adj. Sess.), § 4, eff. May 27, 1992; 2023, No. 145 (Adj. Sess.), § 11, eff. July 1, 2026.)
§ 3619. Time-share projects
(a) As used in this section, a time-share project means a project involving real property
containing time-share estates. A “time-share estate” is a right to occupy a unit
or any of several units in a time-share project during separated time periods coupled
with a freehold estate or an estate for years in a time-share property or a specified
portion thereof.
(b) With respect to property taxes, both real and personal, on time-share projects, each
property owner of a time-share estate shall be liable for the payment thereof to the
town. However, the owners’ association, corporation, or whatever entity is authorized
by the project instruments to manage the common property, shall be the agent of the
time-share estate owners for the payment of property taxes from the individual owners
to the town. The town shall set in the grand list as real estate the units and common
property of the project of which the time-share estates are a part and shall list
the entire property to the association, corporation, or whatever entity is authorized
by the project instruments to manage the common property, which entity assumes the
rights and liabilities of any owner of property in the grand list. However, with respect
to each other, each owner of a time-share estate shall be responsible only for a fraction
of such assessments, property taxes, both real and personal, and charges proportionate
to the magnitude of his or her undivided interest in the fee to the whole estate of
which he or she is a part, as covered in the association’s, corporation’s, or entity’s
bylaws or other project instruments.
(c) A lien by the town for the collection of taxes owed by an owner of a time-share estate
shall be imposed upon the entire property composing the time-share project. With
respect to notification and sale for collection of taxes under chapter 133 of this
title, the owners’ association, corporation, or whatever entity is authorized by the
project instruments to manage the common property, and not the town, is responsible
for notifying all time-share estate owners of any delinquency or other notice required
under chapter 133 of this title, and for payment of the delinquent tax together with
interest and penalties. (Added 1983, No. 18, eff. March 31, 1983.)
§ 3620. Electric utility poles, lines, and fixtures
Electric utility poles, lines, and fixtures owned by nonmunicipal utilities shall
be taxed at appraisal value as defined by section 3481 of this title, except as provided under subdivision 3802(19) of this title. (Added 1985, No. 169 (Adj. Sess.), § 1, eff. May 5, 1986; amended 2021, No. 71, § 15.)
§ 3621. Petroleum and natural gas infrastructure
For purposes of the statewide education property tax in chapter 135 of this title,
the Director shall determine the appraised value of all property and fixtures composing
and underlying a petroleum or natural gas facility, petroleum or natural gas transmission
line, or petroleum or natural gas distribution line located entirely within this State.
The Director shall value such property at its fair market value, an assessment it
shall reach by the cost approach to value by employing an actual cost-based methodology,
adjusting that actual cost using a cost factor from industry-specific inflation indexes,
and depreciating the resulting present cost using a depreciation schedule based on
the property’s estimated remaining life; provided, however, that after the property
has been depreciated to 30 percent of its present cost or less, exclusive of salvage
value, the property shall be appraised at 30 percent of its cost. The Director shall
inform the local assessing officials of his or her appraised value under this section
on or before May 1 of each year, and the local assessing officials shall use the Director’s
appraised value for purposes of assessing and collecting the statewide education property
tax under chapter 135 of this title. (Added 2013, No. 174 (Adj. Sess.), § 32, eff. Jan. 1, 2015.)
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Subchapter 004: STATE PAYMENT IN LIEU OF PROPERTY TAXES
§ 3701. Definitions
As used in this subchapter:
(1) “State-owned property” means
(A) State-owned buildings, including buildings of the Vermont State Colleges that are
tax-exempt under 16 V.S.A. § 2178; buildings of the University of Vermont and State Agricultural College used for educational
and not commercial purposes; and buildings of the Agency of Transportation and the
Department of the Military; but excluding the value of land on which the buildings
are located, and excluding all highways and bridges and any land pertaining to them;
and
(B) State-owned lands that pertain to State correctional facilities.
(2) “Assessed value of State buildings” means the estimation of the current cost of replacing
a building, maintained for insurance purposes by the State agency or other entity
responsible for insuring the building, depreciated by the age and condition of the
building.
(3) “Assessed value of State lands” means the fair market value of lands that pertain
to State correctional facilities, as determined by the Division of Property Valuation
and Review, subject to the provision of subsection 3704(b) of this title.
(4) “Adjusted municipal grand list” means the total assessed value of any State-owned
property located in a municipality, multiplied by the common level of appraisal for
the municipality as determined by the Division of Property Valuation and Review, multiplied
by one percent, and added to the grand list of the municipality as determined pursuant
to chapter 129 of this title.
(5) “Adjusted municipal tax rate” means the total sum of money voted by a municipality
for all noneducational expenses pursuant to 17 V.S.A. § 2664 or 24 V.S.A. § 1309, divided by the adjusted municipal grand list of the municipality.
(6) “Municipality” means an incorporated city, town, village, or unorganized town, grant,
or gore in which a tax is assessed for noneducational purposes. (Added 1997, No. 60, § 53; amended 1997, No. 71 (Adj. Sess.), §§ 23, 24, eff. July 1, 1997; 1999, No. 1, § 106a, eff. March 31, 1999; 2005, No. 207 (Adj. Sess.), § 7; 2021, No. 105 (Adj. Sess.), § 515, eff. July 1, 2022.)
§ 3702. Payment of grants authorized
The Secretary of Administration shall determine annually the amount of payment due,
as a State grant in lieu of property taxes, to each municipality in the State in which
is located any State-owned property, in accordance with the provisions of this subchapter. (Added 1997, No. 60, § 53.)
§ 3703. Grant formula
(a) The amount of a grant to a municipality authorized by this subchapter shall be based
on the total assessed value of any State-owned property located in the municipality,
multiplied by the common level of appraisal for the municipality as determined by
the Division of Property Valuation and Review, multiplied by one percent, and multiplied
by the adjusted municipal tax rate for the municipality in which the property is located.
(b) [Repealed.]
(c) The total of any grants under subsection (a) of this section for buildings owned by
the University of Vermont and State Agricultural College shall be limited to a maximum
of $750,000.00.
(d) [Repealed.]
(e) The Secretary of Administration shall have authority to reduce any payments under
this subchapter to avoid multiple payments to a municipality in the same year in lieu
of taxes with respect to the same property. (Added 1997, No. 60, § 53; amended 1997, No. 71 (Adj. Sess.), § 26, eff. July 1, 1997; 1999, No. 1, § 106b, eff. March 31, 1999.)
§ 3704. Determination of assessed values; appeal
(a) Prior to August 1, 1997, and to May 1 of each taxable year thereafter, the Secretary
of Administration shall provide assessed values of State buildings and lands, as defined
under this subchapter, to every municipality to which a grant is payable under this
subchapter.
(b) Any municipality aggrieved by the action of the Secretary under this section may,
within 30 days of receipt of the assessed values, appeal to the Superior Court of
the district in which the municipality is located. (Added 1997, No. 60, § 53.)
§ 3705. Adjusted municipal grand list and adjusted municipal tax rate
(a) Prior to October 1 in each taxable year, the Division of Property Valuation and Review
shall provide the Secretary of Administration with the following:
(1) the adjusted municipal grand list for the prior assessment year, with the assessed
values of all State-owned property shown separately, together with a statement of
the common level of appraisal used to weight the assessed values of State-owned property;
(2) the adjusted municipal tax rate to be used in assessing taxes on the prior adjusted
municipal grand list; and
(3) the total sum of money voted by the municipality for all noneducational expenses,
pursuant to 17 V.S.A. § 2664.
(b) Prior to issuing a grant under this subchapter, the Secretary of Administration may
substitute his or her calculations of the adjusted municipal grand list or the adjusted
municipal tax rate for a municipality if the Secretary finds that those calculations
provided by the municipality under this section are in error or are inconsistent with
assessed values as determined pursuant to section 3704 of this title. (Added 1997, No. 60, § 53; amended 1997, No. 71 (Adj. Sess.), § 25, eff. July 1, 1997.)
§ 3706. Payment to municipalities
Grants under this subchapter shall be made annually by the Secretary of Administration
to each eligible municipality on or before December 1, 1997, and on or before October
31 in years thereafter. Nothing in this subchapter shall be construed or permitted
to affect the tax exempt status of the University of Vermont and State Agricultural
College, as provided by statute and guaranteed by that institution’s charter. (Added 1997, No. 60, § 53.)
§ 3707. Rules
The Secretary of Administration may adopt rules under 3 V.S.A. chapter 25 to carry
out the provisions of this subchapter. (Added 1997, No. 60, § 53.)