The Vermont Statutes Online

Title 32: Taxation and Finance

Chapter 125: Exemptions

• Subchapter 001: EXEMPTIONS

• § 3800. Statutory purposes

  (a) The statutory purpose of the exemption for congressionally chartered organizations in subdivision 3802(2) of this title is to support certain organizations with a patriotic, charitable, historical, or educational purpose.

  (b) The statutory purpose of the exemption for public, pious, and charitable property in sections 3832 and 3840 and subdivision 3802(4) of this title is to allow these organizations to dedicate more of their financial resources to furthering their public-service missions.

  (c) [Repealed.]

  (d) The statutory purpose of the exemption for Young Men’s and Women’s Christian Associations in subdivision 3802(6) of this title is to allow these organizations to dedicate more of their financial resources to furthering their public-service missions.

  (e) The statutory purpose of the exemption for cemeteries in subdivision 3802(7) of this title is to lower the cost of establishing and maintaining cemeteries.

  (f) The statutory purpose of the exemption for property owned by agricultural societies in subdivision 3802(9) of this title is to lower the cost of public access to agricultural events.

  (g) The statutory purpose of the exemption for $10,000.00 of appraised value of a residence for a veteran in subdivision 3802(11) of this title is to recognize disabled veterans’ service to Vermont and to the country.

  (h) The statutory purpose of the exemption for property exclusively installed and operated for the abatement of water pollution in subdivision 3802(12) of this title is to encourage real property improvements that abate water pollution by nonpublic entities that would not qualify for an exemption as a government entity.

  (i) The statutory purpose of the exemption for humane societies in subdivision 3802(15) of this title is to lower operating costs for organizations that protect animals to allow them to dedicate more of their financial resources to furthering their public-service missions.

  (j) The statutory purpose of the exemption for federally qualified health centers or rural health clinics in subdivision 3802(16) of this title is to support health centers that serve an underserved area or population, offer a sliding fee scale, provide comprehensive services, and have an ongoing quality assurance program.

  (k) The statutory purpose of the railroad property alternative tax method in subdivision 3803(1) of this title is to provide an alternative to the traditional valuation method in order to achieve consistency across municipalities.

  (l) The statutory purpose of the telephone property alternative tax method referenced in subdivision 3803(2) of this title is to provide an alternative to the traditional valuation method in order to achieve consistency across municipalities.

  (m) The statutory purpose of the exemptions in Vermont permanent session law in 2008 Acts and Resolves No. 190, 1892 Acts and Resolves No. 213, 1945 Acts and Resolves No. 204, 1939 Acts and Resolves No. 250, 1921 Acts and Resolves No. 31, 1921 Acts and Resolves No. 262, 1910 Acts and Resolves No. 370, and 1900 Acts and Resolves No. 244 is to provide relief to specific properties that have demonstrated an individual purpose to the General Assembly.

  (n) The statutory purpose of the exemptions for renewable energy plants generating electricity from solar power in subdivision 3802(17) of this title and for energy storage facilities in subdivision 3802(19) of this title is to lower the cost of generating and storing electricity from solar power for smaller plants and facilities.

  (o) The statutory purpose of the exemptions for broadband infrastructure in subdivision 3802(20) of this title is to lower the cost of broadband deployment in unserved and underserved areas of Vermont.

  (p) The statutory purpose of the exemption under subdivision 3802(21) of this title for property owned by Native American tribes is to recognize those peoples as the traditional land caretakers of Vermont and to lower their costs to allow them to dedicate more of their financial resources to furthering their tribe-related activities.

  [Subsection (q) repealed effective July 1, 2037.]

  (q) The statutory purpose of the exemption under 32 V.S.A. chapter 125, subchapter 3 for new construction or rehabilitation is to lower the cost of new construction or rehabilitation of residential properties in flood-impacted communities. (Added 2013, No. 200 (Adj. Sess.), § 15; amended 2021, No. 54, § 17; 2021, No. 71, § 13; 2021, No. 90 (Adj. Sess.), § 2, eff. July 1, 2022; 2021, No. 105 (Adj. Sess.), § 522, eff. July 1, 2022; 2023, No. 181 (Adj. Sess.), § 79, eff. June 17, 2024; 2023, No. 181 (Adj. Sess.), § 82(1), eff. July 1, 2037.)

• § 3801. [Repealed.]

• § 3802. Property tax

  The following property shall be exempt from taxation:

  (1) Real and personal estate owned by this State, except as otherwise provided; real and personal estate owned by the United States; U.S. securities that are specially exempt from taxation by the laws of the United States at the time of making the list, except that this subdivision shall not prohibit a federal agency from making payments for taxes on repossessed or voluntarily conveyed single family, multifamily living units, or farm properties.

  (2) Real and personal property owned by a post of any veterans’ organization chartered by act of Congress of the United States or owned by a corporation the members or stockholders of which are members of such post or its auxiliary, provided such real estate is used for purposes of the post or its auxiliary or such corporation only, is used as the principal meeting place of such post or its auxiliary in the exercise of its functions and activities, and is not leased or rented for profit, and real and personal property owned by and used for the purpose of its work by a nonprofit organization chartered by act of the Congress of the United States, such as a Red Cross, boy scout, girl scout, or boy or girl organization.

  (3) Personal estate owned by inhabitants of this State situated and taxed in another state.

  (4) Real and personal estate granted, sequestered, or used for public, pious, or charitable uses; real property owned by churches or church societies or conferences and used as parsonages and personal property therein used by ministers engaged in full-time work in the care of the churches of their fellowship within the State; real and personal estate set apart for library uses and used by the public and private circulating libraries, open to the public and not used for profit; lands leased by towns or town school districts for educational purposes; and lands owned or leased by colleges, academies, or other public schools or leased by towns for the support of the gospel; and lands and buildings owned and used by towns for the support of the poor therein; but private buildings on such lands shall be set in the list to the owners thereof, and shall not be exempt. The exemption of lands owned or leased by colleges, academies, or other public schools shall not apply to lands or buildings rented for general commercial purposes, nor to farming or timberlands owned or leased thereby; but this provision shall not affect the exemption of so-called school or college lands, sequestered to such use prior to January 28, 1911.

  (5) [Repealed.]

  (6) Buildings, land, and personal property owned and occupied by a Young Men’s Christian Association or a Young Women’s Christian Association for the purposes of its work, the income of which is entirely used for such purposes.

  (7) Lands used for cemetery purposes and the structures thereon, trust funds and other property belonging to or held by cemetery associations, and the lots of the proprietors thereof.

  (8) Household furniture and equipment of every person not regularly used as income-producing property; household provisions; personal wearing apparel and ornament; private and professional libraries; shrubs and plants located in a commercial greenhouse or nursery; fowl; sheep; cattle; horses; goats; swine; bees; hay and produce sufficient to winter out the stock; tractors and other machinery of a farmer, not used for hire or contract purposes; real and personal farm property constructed and used for the storage of manure and designed to avoid water pollution; tools and implements of a mechanic or farmer; aircraft, automobiles, and motor vehicles, but not including trailer coaches; and motorized highway-building equipment and road-making appliances as defined in 23 V.S.A. § 4(19) and (31) required to be registered as motor vehicles.

  (9) Grounds and property owned and occupied by agricultural societies, so long as the same are used annually for agricultural fairs.

  (10) [Repealed.]

  (11)(A)(i) Real and personal property to the extent of $10,000.00 of appraisal value, except any part used for business or rental, occupied as the established residence of and owned in fee simple by a veteran, the veteran’s spouse, widow, widower, or child, or jointly by any combination of them, if one or more of them are receiving disability compensation for at least 50 percent disability, death compensation, dependence and indemnity compensation, or pension for disability paid through any military department or the Veterans Administration if, before May 1 of each year, there is filed with the Office of Veterans Affairs:

  (I) a written application for the compensation or pension; and

  (II) a written statement from the Military Department or the Veterans Administration showing that the compensation or pension is being paid. Only one exemption may be allowed on a property. Application for an exemption under this section based upon permanent disability is only required to be filed with the Office of Veterans Affairs before May 1 of the first year for which the exemption is sought, and the exemption shall remain on the grand list until title to the property is transferred.

  (ii) Only one exemption may be allowed on a property. Application for an exemption under this section based upon permanent disability is only required to be filed with the Office of Veterans Affairs before May 1 of the first year for which the exemption is sought, and the exemption shall remain on the grand list until title to the property is transferred.

  (B) The terms used in this subdivision (11) shall have the same definitions as in 38 U.S.C. § 101, except that:

  (i) the definitions shall apply as if federal law recognized a civil union or a civil marriage in the same manner as Vermont law;

  (ii) such definitions shall not be construed to deny eligibility for exemption in the case where such exemption is based on retirement for disability and retirement pay is received from a federal agency other than the Veterans Administration; and

  (iii) the age and marital status limits in 38 U.S.C. § 101(4)(A) shall not apply.

  (C) An unremarried widow or widower of a previously qualified veteran shall be entitled to the exemption provided in this subdivision (11) whether or not the individual is receiving government compensation or pension. By majority vote of those present and voting at an annual or special meeting warned for the purpose, a town may increase the veterans’ exemption under this subdivision (11) to up to $40,000.00 of appraisal value. Any increase in exemption shall take effect for the taxable year for which it was voted and shall remain in effect for future taxable years until amended or repealed by a similar vote.

  (12) Real and personal property exclusively installed and operated for the abatement of pollution of the waters of the State of Vermont or waters within the purview of the New England Interstate Water Pollution Control Compact in accordance with engineering principles approved by the Vermont Water Resources Board. This type of property shall be exempt as long as its operation meets with the approval of the Secretary of Natural Resources.

  (13), (14) [Repealed.]

  (15) Real and personal property owned by a charitable, nonprofit organization devoted to the welfare, protection, and humane treatment of animals, including any premises of a custodian or caretaker that are attached to or are located on the grounds of such an animal shelter.

  (16) Real and personal property owned by a federally qualified health center or a free standing, federally designated rural health clinic, provided such center or clinic is governed by a community board of directors, offers care on a sliding scale based on ability to pay, is owned and operated on a nonprofit basis, is unconditionally dedicated to public use that directly benefits an indefinite class of the public, and confers a benefit on society. Notwithstanding any provision of law to the contrary, this exemption shall apply without the need for a vote of the town or municipality in which such property is located.

  (17) Real and personal property, except land, comprising a renewable energy plant generating electricity from solar power that has a plant capacity of less than 50 kW and is either:

  (A) operated on a net-metered system; or

  (B) not connected to the electric grid and provides power only on the property on which the plant is located.

  (18) [Repealed.]

  (19) Real and personal property, except land, comprising an energy storage facility that has a plant energy rating of less than 600 kWh.

  (20) Real and personal property, except land, owned by an electric distribution utility that comprises broadband infrastructure, including structures, machinery, lines, poles, wires, and fixtures, provided the infrastructure is leased to a communications union district or to an Internet service provider working in conjunction with a communications union district, and is primarily for the purpose of providing broadband service capable of speeds of at least 100 Mbps symmetrical. This exemption applies only to broadband infrastructure constructed on or after July 1, 2021.

  (21) Real and personal property owned by a Native American tribe that has been recognized pursuant to 1 V.S.A. chapter 23 or owned by a nonprofit organization that is organized for the tribe’s benefit and controlled by the tribe, provided the property is used for purposes of the tribe and is not leased or rented for profit.

  (22) Real and personal estate owned by a county of this State, except land and buildings outside of a county’s territorial limits shall be subject to municipal property tax by the municipality in which the land or buildings are situated. Notwithstanding the preceding provision, the exemption for public, pious, and charitable uses under subdivision (4) of this section shall be available for qualifying county land and buildings outside of the county’s territorial limits. (Amended 1959, No. 62, eff. March 26, 1959; 1961, No. 216, §§ 1, 2, eff. July 13, 1961; 1962, No. 3 (Sp. Sess.), § 1, eff. Aug. 2, 1962; 1963, No. 23, eff. March 28, 1963; 1963, No. 29, eff. April 2, 1963; 1963, No. 30, eff. April 2, 1963; 1963, No. 147; 1964, No. 16 (Sp. Sess.); 1965, No. 33, eff. April 20, 1965; 1966, No. 21 (Sp. Sess.), § 2, eff. March 3, 1967; 1967, No. 156, eff. April 15, 1967; 1971, No. 28, eff. Jan. 1, 1972; 1973, No. 9, § 1, eff. date, see note set out below; 1973, No. 91, eff. for the tax year beginning April 1, 1974 and thereafter; 1975, No. 101, § 3, eff. April 30, 1975; 1975, No. 160 (Adj. Sess.); 1977, No. 16, § 2, eff. March 22, 1977; 1977, No. 71, § 1, eff. date April 23, 1977 (first be effective for property taxes assessed for the year 1977); 1977, No. 170 (Adj. Sess.); 1977, No. 172 (Adj. Sess.); 1981, No. 70, eff. May 1, 1981; 1981, No. 222 (Adj. Sess.), § 10; 1987, No. 76, § 18; 1987, No. 147 (Adj. Sess.), § 1, eff. April 13, 1988; 1989, No. 26; 1991, No. 43; 1991, No. 187 (Adj. Sess.); 1991, No. 203 (Adj. Sess.), § 1, eff. May 27, 1992; 1993, No. 134 (Adj. Sess.), § 1, eff. April 26, 1994; 1995, No. 3, § 1, eff. March 9, 1995; 1995, No. 105 (Adj. Sess.), § 1; 1999, No. 49, § 44, eff. June 2, 1999; 1999, No. 91 (Adj. Sess.), § 23; 2005, No. 38, § 28; 2005, No. 207 (Adj. Sess.), § 25, eff. May 31, 2006; 2007, No. 190 (Adj. Sess.), § 23, eff. June 6, 2008; 2009, No. 1 (Sp. Sess.), § H.28, eff. June 2, 2009; 2011, No. 45, § 13g, eff. May 24, 2011; 2011, No. 111 (Adj. Sess.), § 1, eff. May 8, 2012; 2011, No. 127 (Adj. Sess.), § 2, eff. Jan. 1, 2013; 2013, No. 73, § 27, eff. June 5, 2013; 2013, No. 73, § 28, eff. Jan. 1, 2014; 2013, No. 174 (Adj. Sess.), §§ 26, 69, eff. Jan. 1, 2015; 2013, No. 200 (Adj. Sess.), § 21a; 2013, No. 200 (Adj. Sess.), § 22, eff. Jan. 1, 2017; 2021, No. 54, § 18; 2021, No. 71, § 12; 2021, No. 90 (Adj. Sess.), § 3, eff. July 1, 2022; 2021, No. 105 (Adj. Sess.), § 523, eff. July 1, 2022; 2023, No. 144 (Adj. Sess.), § 9, eff. June 3, 2024.)

• § 3802a. Requirement to provide insurance information

  Before April 1 of each year, owners of property exempt from taxation under subdivisions 3802(4), (6), (9), (12), and (15) and under subdivisions 5401(10)(D), (F), (G), and (J) of this title shall provide their local assessing officials with information regarding the insurance replacement cost of the exempt property or with a written explanation of why the property is not insured. (Added 2013, No. 73, § 29, eff. June 5, 2013; amended 2021, No. 105 (Adj. Sess.), § 524, eff. July 1, 2022.)

• § 3803. Exemptions from local taxation

  Except as otherwise provided, the following property shall not be set in the grand list to the owner thereof:

  (1) real and personal estate used in operating a railroad, and appraised under sections 8281–8286 and 8321–8322 of this title, including the section of the North Stratford, New Hampshire, to Beecher Falls, Vermont, railroad line owned by the State of New Hampshire and situated in the Town of Canaan exempted from taxation under section 8286 of this title;

  [Subdivision (2) effective until July 1, 2025; see also subdivision (2) effective July 1, 2025 set out below.]

  (2) real and personal estate, except land and buildings, used in carrying on telephone business or in operating a transportation company in this State; and

  [Subdivision (2) effective July 1, 2025; see also subdivision (2) effective until July 1, 2028 set out above.]

  (2) real and personal estate, except land and buildings, used in operating a transportation company in this State; and

  (3) money, stocks, bonds, mortgages, and other evidences of indebtedness. (Amended 1989, No. 222 (Adj. Sess.), § 33, eff. May 31, 1990; 1997, No. 156 (Adj. Sess.), § 2, eff. April 29, 1998; 2021, No. 105 (Adj. Sess.), § 525, eff. July 1, 2022; 2023, No. 145 (Adj. Sess.), § 8, eff. July 1, 2025.)

• Subchapter 002: RESTRICTED EXEMPTIONS

• § 3831. College, university, or fraternity property

  (a) Any real property acquired after April 1, 1941, by any college, university, or fraternity such as would be exempt from taxation under the provisions of section 3802 of this title shall be set to such institution in the grand list of the town or city in which such real property is located at the value fixed in the appraisal next preceding the date of acquisition of such property and taxed on such valuation. However, the voters of any town or city may at any legal meeting thereof vote to exempt such property from taxation, either in whole or in part. Except as provided under subsection (c) of this section, the value fixed on such property at such appraisal shall not be increased so long as the property is owned and used by such institution for other than commercial and investment purposes, whether or not improvements are made thereon.

  (b) The provisions of subsection (a) of this section shall not exempt from county, town, or school taxes lands owned by a college and leased “as long as wood grows and water runs,” securing to the lessees the right of preemption, unless such lands were chartered as sequestered for the benefit of the college or became the property of the college prior to the organization of the town in which they lie.

  (c) In the event of a general reappraisal of all property in the municipality completed after 1982, the appraisal value of property subject to subsection (a) of this section shall first be changed to an amount that yields a tax liability (computed with reference to the tax rate applicable to the first tax year based on the reappraisal) equal to the tax liability for such property for the tax year immediately preceding the reappraisal, provided that in the event the tax liability imposed on the majority of all taxable properties in the municipality increases in the first tax year based on the reappraisal, then any appraisal value of property subject to subsection (a) of this section shall be further changed to an amount that yields the tax liability computed above adjusted by the average percentage increase or decrease in the tax liability of all taxable properties in the municipality.

  (d) As used in this section, the term “fraternity” shall also mean “sorority.” (Amended 1957, No. 219, § 2, eff. July 1, 1961; 1987, No. 215 (Adj. Sess.), § 1, eff. May 27, 1988.)

• § 3832. Public, pious, and charitable uses

  The exemption from taxation of real and personal estate granted, sequestered, or used for public, pious, or charitable uses shall not be construed as exempting:

  (1) real and personal property held in trust for a municipal corporation by virtue of a trust that takes effect after May 20, 1959 when the property is located outside the town where the municipal corporation has its principal place of business, unless the town or municipality in which the property is located so votes at any regular or special meeting duly warned therefor;

  (2) real estate owned or kept by a religious society other than a church edifice, a parsonage, the outbuildings of the church edifice or parsonage, a building used as a convent, school, orphanage, home, or hospital, land adjacent to any of the buildings named in this subdivision, kept and used as a parking lot not used to produce income, lawn, playground, or garden, and the so-called glebe lands;

  (3) property of railroad corporations;

  (4) a municipal electric light plant when located outside the town wherein the municipality owning it is situated;

  (5) real and personal property held by the State and located in any town other than that in which the institution of which it forms a part is located;

  (6) real and personal property owned or kept by an orphanage, home, or hospital, including a diagnostic and treatment center not used for the purpose of such institution but leased to others for income or profit, whether or not the institution is conducted by or connected with a religious society, unless the town or municipality in which the property is located so votes at any regular or special meeting duly warned therefor; or

  (7) real and personal property of an organization when the property is used primarily for health or recreational purposes, unless the town or municipality in which the property is located so votes at any regular or special meeting duly warned therefor, and except for the following types of property:

  (A) buildings and land owned and occupied by a health, recreation, and fitness organization that is:

  (i) exempt from taxation under 26 U.S.C. § 501(c)(3);

  (ii) used its income entirely for its exempt purpose; and

  (iii) promotes exercise and healthy lifestyles for the community and serve citizens of all income levels; and

  (B) real and personal property operated as a skating rink, owned and operated on a nonprofit basis, but not necessarily by the same entity, and that, in the most recent calendar year, provided facilities to local public schools for a sport officially recognized by the Vermont Principals’ Association. (Amended 1959, No. 187; 1965, No. 71; 2013, No. 174 (Adj. Sess.), § 55, eff. Jan. 1, 2015; 2017, No. 113 (Adj. Sess.), § 187.)

• § 3833. Repealed. 1979, No. 203 (Adj. Sess.), § 5, eff. May 7, 1980.

• § 3834. Factories; quarries; mines

  If the amount invested exceeds $1,000.00, manufacturing establishments, quarries, mines, and such machinery, tramways, appliances, and buildings as are necessary for use in the business, machinery placed in an unoccupied building to be used in such business, and capital and personal property used in such business may be exempted from taxation for a period not exceeding 10 years from the commencement of business if the town so votes.

• § 3835. Reporting exemption

  Within 10 days after the adjournment of any town meeting at which an exemption is granted under the provisions of section 3834 of this title, the town clerk shall report to the director, upon forms to be furnished by him or her, the date upon which such exemption was granted and the length of the term thereof. (Amended 1977, No. 105, § 14(a).)

• § 3836. Homes and dwellings

  Annually at town meeting, a town may vote to exempt from taxes the first $75,000.00 or a smaller amount of the appraised value of buildings used and occupied exclusively as homes, dwelling houses, or farm buildings whether for sale or rent, provided such buildings have been constructed or put in the process of construction during the 12 months immediately preceding the meeting or are to be constructed or put in the process of construction during the 12 months immediately following the meeting. The duration of such exemption shall not exceed three years, to be determined by the vote. The exemption shall first be applicable against the grand list of the year in which the vote is taken. (Amended 1961, No. 255, eff. July 31, 1961; 2003, No. 76 (Adj. Sess.), § 31.)

• § 3837. Airports

  At an annual or special meeting, a town may vote to exempt, for a period not exceeding five years at a time, real and personal estate used and occupied for or in connection with airport purposes.

• § 3838. Hotels

  At an annual or special meeting, a town may vote to exempt, for a period not exceeding five years at a time, real and personal estate used and occupied for hotel purposes. When a majority of those voting on the question of such exemption at an annual meeting vote in favor thereof, such vote shall not be valid unless it shall appear that the total grand list of such majority is equal to at least one-half of the total grand list of those voting on such question. When a majority of those voting on the question of such exemption at a special meeting vote in favor thereof, such vote shall not be valid unless it shall appear that such majority is equal in number to one-third of the total number of legal voters in such town, nor unless it shall appear that the total grand list of such majority is equal to at least one-half of the total grand list of those voting on such question.

• § 3839. Municipally owned lakeshore property

  (a) Notwithstanding section 3659 of this title, a town may vote to exempt from its municipal taxes, in whole or in part, any parcel of land, but not buildings, that provides public access to public waters, as defined in 10 V.S.A. § 1422(6), and that is also:

  (1) owned by the Town of Hardwick, and located in Greensboro, Vermont; or

  (2) owned by the Town of Thetford, and located in Fairlee and West Fairlee, Vermont.

  (b) An exemption voted by a town under subsection (a) of this section shall be for up to ten years. Upon the expiration of the exemption, a town may vote additional periods of exemption not exceeding five years each. (Added 2013, No. 174 (Adj. Sess.), § 56.)

• § 3840. Charitable and fraternal organizations

  When a society or body of persons associated for a charitable purpose, in whole or in part, including fraternal organizations, volunteer fire, and ambulance or rescue companies, owns real estate used exclusively for the purposes of such society, body, or organization, such real estate may be exempted from taxation, either in whole or in part, for a period not exceeding 10 years, if the town so votes. Upon the expiration of such exemption, a town may vote additional periods of exemption not exceeding five years each. (Amended 1961, No. 24, eff. March 17, 1961; 1975, No. 156 (Adj. Sess.), § 1.)

• § 3841. Repealed. 1995, No. 169 (Adj. Sess.), § 7(b), eff. May 15, 1996.

• § 3842. Repealed. 1995, No. 169 (Adj. Sess.), § 7(c), eff. May 15, 1996.

• § 3843. Housing projects for low- and moderate-income occupants

  A municipality may vote at any regular or special meeting to exempt, in full or in part, for a term not to exceed 40 years, a federally subsidized low- or moderate-income housing project from education property tax if federal assistance would not be available in the absence of such an exemption. (Added 1969, No. 268 (Adj. Sess.), § 1, eff. April 8, 1970; amended 2007, No. 190 (Adj. Sess.), § 6, eff. June 6, 2008.)

• § 3844. Repealed. 2007, No. 190 (Adj. Sess.), § 7, eff. May 1, 2008.

• § 3845. Renewable energy sources

  (a) At an annual or special meeting warned for that purpose, a town may, by a majority vote of those present and voting, exempt renewable energy sources, as defined herein, from real and personal property taxation. Such exemption shall first be applicable against the grand list of the year in which the vote is taken and shall continue until voted otherwise, in the same manner, by the town.

  (b) As used in this section, renewable energy shall have the same meaning as in 30 V.S.A. § 8002 for energy used on the premises for private, domestic, or agricultural purposes, no part of which may be for sale or exchange to the public. The term shall include grist mills, windmills, facilities for the collection of solar energy or the conversion of organic matter to methane, net-metering systems regulated by the Public Utility Commission under 30 V.S.A. § 8010, and all component parts thereof, but excluding land upon which the facility is located. (Added 1975, No. 226 (Adj. Sess.), § 2; amended 2007, No. 92 (Adj. Sess.), § 23; 2013 No. 99 (Adj. Sess.), § 8, eff. Jan. 1, 2017; 2013, No. 174 (Adj. Sess.), § 28, eff. Jan. 1, 2015.)

• § 3846. Farmland appraisal contracts

  (a) As used in this section:

  (1) “Farmland” means real estate that is actively and exclusively devoted to farming and that is at least 25 acres in area and is operated or leased as a farm enterprise by the owner.

  (2) “Forestland” means any land, exclusive of any housesite, which is at least 25 acres in size and which is under active forest management for the purpose of growing and harvesting repeated forest crops.

  (3) “Owner” of farmland or forestland means the record holder of the legal title (with closed leaseland, of the perpetual leasehold interest therein) individually, jointly with a member of his or her family, or as a member of a partnership all members of which are actively engaged in agriculture in Vermont.

  (b) The legislative body of a municipality may negotiate tax stabilization contracts with the owners of farmland or forestland pursuant to the provisions of 24 V.S.A. § 2741, except that to negotiate such contracts the legislative body of the municipality shall be deemed to have the authorization of the municipality under 24 V.S.A. § 2741(b).

  (c) Any tax stabilization contract negotiated without the approval of a vote of the municipality under subsection (b) of this section shall provide that each appropriate taxing jurisdiction in which the property is located, including municipalities and school districts, shall compute the difference between the taxes due on such land under a farmland or forestland stabilization contract and the amount of taxes that would have been owed on such land at a fair market value appraisal. In the event of a conversion of the land from farmland or forestland to another use in breach of the contract, the sum of the differences between these two amounts of taxes for the previous three years shall be paid by the owner of the land under contract to the municipality within 30 days of the conversion. The contract shall constitute a lien in favor of the municipality against the property subject to the contract for payment of any amounts due the municipality under this subsection.

  (d) Whenever the assessing officials deny in whole or in part any application for classification as farmland or forest land or grant a different classification than that applied for, or fix an erroneous use value appraisal for eligible land, the aggrieved owner may appeal the decision in accordance with the provisions set forth in chapter 131 of this title. The appeal shall be heard in the same manner and under the same procedures as other appeals relating to real property appraisals and taxation. (Added 1977, No. 105, § 24.)

• § 3847. Neighborhood housing improvement programs

  At an annual or special meeting, a municipality may vote to exempt, for a period not exceeding five years, the property tax on the value of improvements made to principal dwelling units with funds provided in whole or in part by a nonprofit, neighborhood, or municipal housing improvement program that limits eligibility to residents with incomes below the median income of the State. Such programs include neighborhood housing services, Community Loan Funds, community land trusts, neighborhood planning associations, and municipal housing improvement programs. (Added 1989, No. 23.)

• § 3848. Inventory tax; local option

  (a) At an annual or special meeting warned for the purpose, a municipality may, by a majority vote of those present and voting, elect not to tax inventory of manufacturers and merchants and of other trades and businesses, including professional practices, except as otherwise provided by law. An election by a town not to tax inventory shall remain in effect until repealed or amended by a similar vote of the town.

  (b) As used in this section, “inventory” means tangible personal property of a nondepreciable nature held for consumption, sale, resale, leasing, or to be furnished under contracts of service, in a trade or business, and includes raw materials, work in process, semi-finished or finished goods of manufacturers and processors, and the stock-in-trade of wholesalers and retailers.

  (c) A repeal of the tax on inventory may be effective for 100 percent of inventory in the tax year following the vote, or the town may vote to exempt a stated percentage of inventory each year for a number of years not to exceed ten, until 100 percent of inventory is exempt. (Added 1991, No. 203 (Adj. Sess.), § 2, eff. May 27, 1992.)

• § 3849. Business personal property; local option

  (a) At an annual or special meeting warned for the purpose, a municipality may, by a majority vote of those present and voting, elect not to tax, in whole or in part, business personal property according to this section. An election by a town not to tax business personal property shall remain in effect until repealed or amended by a similar vote of the town.

  (b) As used in this section, “business personal property” means property defined in subsection 3618(c) of this title.

  (c) If a town elects to repeal in whole the tax on business personal property, it may do so effective for 100 percent of property in the year following the vote, or it may vote to exempt an increasing percentage of property each year for a number of years not to exceed 10 years, until 100 percent of business personal property is exempt. (Added 1991, No. 203 (Adj. Sess.), § 3, eff. May 27, 1992.)

• § 3850. Blighted property improvement program

  (a) At an annual or special meeting, a municipality may vote to authorize the legislative body of the municipality to exempt from municipal taxes for a period not to exceed five years the value of improvements made to dwelling units certified as blighted. As used in this section, “dwelling unit” means a building or the part of a building that is used as a primary home, residence, or sleeping place by one or more persons who maintain a household.

  (b) If a municipality votes to approve the exemption described in subsection (a) of this section, the legislative body of the municipality shall appoint an independent review committee that is authorized to certify dwelling units in the municipality as blighted and exempt the value of improvements made to these dwelling units.

  (c) As used in this section, a dwelling unit may be certified as blighted when it exhibits objectively determinable signs of deterioration sufficient to constitute a threat to human health, safety, and public welfare.

  (d) If a dwelling unit is certified as blighted under subsection (b) of this section, the exemption shall take effect on the April 1 following the certification of the dwelling unit. (Added 2013, No. 59, § 14a.)

• Subchapter 003: NEW CONSTRUCTION OR REHABILITATION IN FLOOD-IMPACTED COMMUNITIES [REPEALED EFFECTIVE JULY 1, 2037]

• § 3870. Definitions [Repealed effective July 1, 2037]

  As used in this subchapter:

  (1) “Agency” means the Agency of Commerce and Community Development as established under 3 V.S.A. § 2402.

  (2) “Appraisal value” has the same meaning as in subdivision 3481(1)(A) of this title.

  (3) “Exemption period” has the same meaning as in subsection 3871(d) of this subchapter.

  (4) “New construction” means the building of new dwellings.

  (5) “Principal residence” means the dwelling occupied by a resident individual as the individual’s domicile during the taxable year and for a property owner, owned, or for a renter, rented under a rental agreement other than a short-term rental as defined under 18 V.S.A. § 4301(a)(14).

  (6)(A) “Qualifying improvement” means new construction or a physical change to an existing dwelling or other structure beyond normal and ordinary maintenance, painting, repairs, or replacements, provided the change:

  (i) results in new or rehabilitated dwellings that are designed to be occupied as principal residences and not as short-term rentals as defined under 18 V.S.A. § 4301(a)(14); and

  (ii) occurred through new construction or rehabilitation, or both, during the 12 months immediately preceding or immediately following submission of an exemption application under this subchapter.

  (B) “Qualifying improvement” does not mean new construction or a physical change to any portion of a mixed-use building as defined under 10 V.S.A. § 6001(28) that is not used as a principal residence.

  (7)(A) “Qualifying property” means a parcel with a structure that is:

  (i) located within one-half mile of a designated downtown district, village center, or neighborhood development area determined pursuant to 24 V.S.A. chapter 76A or a new market tax credit area determined pursuant to 26 U.S.C. § 45D, or both;

  (ii) composed of one or more dwellings designed to be occupied as principal residences, provided:

  (I) none of the dwellings shall be occupied as short-term rentals as defined under 18 V.S.A. § 4301(a)(14) before the exemption period ends; and

  (II) a structure with more than one dwelling shall only qualify if it meets the definition of mixed-income housing under 10 V.S.A. § 6001(27);

  (iii) undergoing, has undergone, or will undergo qualifying improvements;

  (iv) in compliance with all relevant permitting requirements; and

  (v) located in an area that was declared a federal disaster between July 1, 2023 and October 15, 2023 that was eligible for Individual Assistance from the Federal Emergency Management Agency or located in Addison or Franklin County.

  (B) “Qualifying property” may have a mixed use as defined under 10 V.S.A. § 6001(28).

  (C) “Qualifying property” includes property located outside a tax increment financing district established under 24 V.S.A. chapter 53, subchapter 5. By vote of the legislative body, a municipality with a tax increment financing district, or a municipality applying for a tax increment financing district, may elect to deem properties within a tax increment financing district as “qualifying property” under this subdivision (C), provided, notwithstanding 24 V.S.A. § 1896, an increase in the appraisal value of a qualifying property due to qualifying improvements shall be excluded from the total assessed valuation used to determine the district’s tax increment under 24 V.S.A. § 1896 during the exemption period.

  (i) For a municipality that elects to consider properties within an existing tax increment financing district under this subdivision (C) as “qualifying property,” the municipality shall submit a substantial change request and file an alternate financial plan to the Vermont Economic Progress Council, which shall detail the effect of this action for approval by the Council.

  (ii) For a municipality that elects to consider properties within a tax increment financing district under this subdivision (C) as “qualifying property” at the time of creation of a new district, prior to implementation of an exemption under this chapter, the municipality shall present a financial plan to the Vermont Economic Progress Council, which shall detail the impact of the action on approval by the Council.

  (8) “Rehabilitation” means extensive repair, reconstruction, or renovation of an existing dwelling or other structure, with or without demolition, new construction, or enlargement, provided the repair, reconstruction, or renovation:

  (A) is for the purpose of eliminating substandard structural, housing, or unsanitary conditions or stopping significant deterioration of the existing structure; and

  (B) equals or exceeds a total cost of 15 percent of the grand list value prior to repair, reconstruction, or renovation or $75,000.00, whichever is less.

  (9) “Taxable value” means the value of qualifying property that is taxed during the exemption period. (Added 2023, No. 181 (Adj. Sess.), § 80, eff. June 17, 2024; repealed by 2023, No. 181 (Adj. Sess.), § 82(2), eff. July 1, 2037.)

• § 3871. Exemption [Repealed effective July 1, 2037]

  (a) Value increase exemption. An increase in the appraisal value of a qualifying property due to qualifying improvements shall be exempted from property taxation pursuant to this subchapter by fixing and maintaining the taxable value of the qualifying property at the property’s grand list value in the year immediately preceding any qualifying improvements. A decrease in appraisal value of a qualifying property due to damage or destruction from fire or act of nature may reduce the qualifying property’s taxable value below the value fixed under this subsection.

  (b) State education property tax exemption. The appraisal value of qualifying improvements to qualifying property shall be exempt from the State education property tax imposed under chapter 135 of this title as provided under this subchapter. The appraisal value exempt under this subsection shall not be exempt from municipal property taxation unless the qualifying property is located in a municipality that has voted to approve an exemption under subsection (c) of this section.

  (c) Municipal property tax exemption. If the legislative body of a municipality by a majority vote recommends, the voters of a municipality may, at an annual or special meeting warned for that purpose, adopt by a majority vote of those present and voting an exemption from municipal property tax for the value of qualifying improvements to qualifying property exempt from State property taxation under subsection (b) of this section. The municipal exemption shall remain in effect until rescinded in the same manner the exemption was adopted. Not later than 30 days after the adjournment of a meeting at which a municipal exemption is adopted or rescinded under this subsection, the town clerk shall report to the Director of Property Valuation and Review and the Agency the date on which the exemption was adopted or rescinded.

  (d) Exemption period.

  (1) An exemption under this subchapter shall start in the first property tax year immediately following the year in which an application for exemption under section 3872 of this title is approved and one of the following occurs:

  (A) issuance of a certificate of occupancy by the municipal governing body for the qualifying property; or

  (B) the property owner’s declaration of ownership of the qualifying property as a homestead pursuant to section 5410 of this title.

  (2) An exemption under this subchapter shall remain in effect for three years, provided the property continues to comply with the requirements of this subchapter. When the exemption period ends, the property shall be taxed at its most recently appraised grand list value.

  (3) The municipal exemption period for a qualifying property shall start and end at the same time as the State exemption period; provided that, if a municipality first votes to approve a municipal exemption after the State exemption period has already started for a qualifying property, the municipal exemption shall only apply after the vote and notice requirements have been met under subsection (c) of this section and shall only continue until the State exemption period ends. (Added 2023, No. 181 (Adj. Sess.), § 80, eff. June 17, 2024; repealed by 2023, No. 181 (Adj. Sess.), § 82(2), eff. July 1, 2037.)

• § 3872. Administration and certification [Repealed effective July 1, 2037]

  (a) To be eligible for exemption under this subchapter, a property owner shall:

  (1) submit an application to the Agency of Commerce and Community Development in the form and manner determined by the Agency, including certification by the property owner that the property and improvements qualify for exemption at the time of application and annually thereafter until the exemption period ends; and

  (2) the certification shall include an attestation under the pains and penalties of perjury that the property will be used in the manner provided under this subchapter during the exemption period, including occupancy of dwellings as principal residences and not as short-term rentals as defined under 18 V.S.A. § 4301(a)(14), and that the property owner will either provide alternative housing for tenants at the same rent or that the property has been unoccupied either by a tenant’s choice or for 60 days prior to the application. A certification by the property owner granted under this subdivision shall:

  (A) be coextensive with the exemption period;

  (B) require notice to the Agency of the transfer or assignment of the property prior to transfer, which shall include the transferee’s or assignee’s full names, phone numbers, and e-mail and mailing addresses;

  (C) require notice to any prospective transferees or assignees of the property of the requirements of the exemption under this subchapter; and

  (D) require a new certification to be signed by the transferees or assignees of the property.

  (b) The Agency shall establish and make available application forms and procedures necessary to verify initial and ongoing eligibility for exemption under this subchapter. Not later than 60 days after receipt of a completed application, the Agency shall determine whether the property and any proposed improvements qualify for exemption and shall issue a written decision approving or denying the exemption. The Agency shall notify the property owner, the municipality where the property is located, and the Commissioner of Taxes of its decision.

  (c) If the property owner fails to use the property according to the terms of the certification, the Agency shall, after notifying the property owner, determine whether to revoke the exemption. If the exemption is revoked, the Agency shall notify the property owner, the municipality where the property is located, and the Commissioner of Taxes. Upon notification of revocation, the Commissioner shall assess to the property owner:

  (1) all State and municipal property taxes as though no exemption had been approved, including for any exemption period that had already begun; and

  (2) interest pursuant to section 3202 of this title on previously exempt taxes.

  (d) No new applications for exemption shall be approved pursuant to this subchapter after December 31, 2027. (Added 2023, No. 181 (Adj. Sess.), § 80, eff. June 17, 2024; repealed by 2023, No. 181 (Adj. Sess.), § 82(2), eff. July 1, 2037.)