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Searching 2023-2024 Session

The Vermont Statutes Online

 

Title 32: Taxation and Finance

Chapter 135: EDUCATION PROPERTY TAX

  • § 5400. Statutory purposes

    (a) The statutory purpose of the exemption for whey processing fixtures in subdivision 5401(10)(G) of this title is to support industries using whey processing facilities to convert waste into value-added products.

    (b) [Repealed.]

    (c) The statutory purpose of the exemption for qualified housing in subdivision 5404a(a)(6) of this title is to ensure that taxes on this rent- restricted housing provided to Vermonters of low and moderate income are more equivalent to property taxed using the State homestead rate and to adjust the costs of investment in rent-restricted housing to reflect more accurately the revenue potential of such property.

    (d) The statutory purpose of the tax increment financing districts in subsection 5404a(f) of this title is to allow communities to encourage investment and improvements that would not otherwise occur and to use locally the additional property tax revenue attributable to those investments to pay off the debt incurred to construct the improvements.

    (e) The statutory purpose of the Vermont Economic Progress Council approved stabilization agreements in section 5404a of this title is to provide exemptions on a case-by-case basis in conjunction with other economic development efforts in order to facilitate economic development that would not otherwise occur.

    (f) [Repealed.]

    (g) The statutory purpose of the wind-powered electric generating facilities alternative tax scheme in subdivision 5401(10)(J)(i) of this title is to provide an alternative to the traditional valuation method in order to achieve consistent valuation across municipalities.

    (h) The statutory purpose of the renewable energy plant generating electricity from solar power alternative tax structure in subdivision 5401(10)(J)(ii) is to provide an alternative to the traditional valuation method in order to achieve consistent valuation across municipalities.

    (i) The statutory purpose of subdivision 5401(10)(D) of this title is to support Vermont’s ski industry and to encourage personal property investments and improvements at ski resorts. (Added 2013, No. 200 (Adj. Sess.), § 16; amended 2017, No. 73, § 10, eff. June 13, 2017; 2021, No. 105 (Adj. Sess.), § 527, eff. July 1, 2022.)

  • § 5401. Definitions

    As used in this chapter:

    (1) “Coefficient of dispersion” is the average absolute deviation expressed as a percentage of the median ratio, and for a municipality in any school year shall be determined by the Director of Property Valuation and Review as follows:

    (A) calculate the ratio of the listed value to the fair market value of each property used in determining the equalized education property value of the municipality as required by section 5406 of this title;

    (B) determine the median of the ratios calculated in subdivision (A) of this subdivision (1);

    (C) determine the absolute deviation of each ratio from the median ratio calculated in subdivision (B) of this subdivision (1); and

    (D) calculate the average absolute deviation.

    (2) “Commissioner” means the Commissioner of Taxes.

    (3) “Common level of appraisal” means the ratio of the aggregate value of local education property tax grand list to the aggregate value of the equalized education property tax grand list.

    (4) “Director” means the Director of Property Valuation and Review.

    (5) “Education property tax grand list” means the list of property determined pursuant to section 5404 of this title. When the listed value of real property for school tax purposes is credited by a board of civil authority or a court, that board or court shall make a corresponding credit to the listed value for purposes of taxation under this chapter.

    (6) “Equalized education property tax grand list” means one percent of the aggregate fair market value of all nonhomestead and homestead property that is required to be listed at fair market value as certified during that year by the Director of Property Valuation and Review under section 5406 of this title, plus one percent of the aggregate value of property required to be listed at a value established under a stabilization agreement described under section 5404a of this title, plus one percent of the aggregate use value established under chapter 124 of this title of all nonhomestead property that is enrolled in the use value appraisal program.

    (7) “Homestead”:

    (A) “Homestead” means the principal dwelling and parcel of land surrounding the dwelling, owned and occupied by a resident individual as the individual’s domicile or owned and fully leased on April 1, provided the property is not leased for more than 182 days out of the calendar year or, for purposes of the renter credit under subsection 6066(b) of this title, is rented and occupied by a resident individual as the individual’s domicile.

    (B) The parcel of land surrounding the dwelling shall be determined without regard to any road that intersects the land. If the parcel of land surrounding the dwelling is owned by a cooperative housing corporation incorporated under 11 V.S.A. chapter 14 or owned by a nonprofit land conservation corporation or community land trust with exempt status under 26 U.S.C § 501(c)(3), the homestead includes a pro rata part of the land upon which the dwelling is built, as determined by the cooperative corporation, nonprofit corporation, or land trust.

    (C) A homestead may consist of a part of a multidwelling or multipurpose building, including cooperative property occupied as a permanent residence by a member of a cooperative housing corporation incorporated under 11 V.S.A. chapter 14. A mobile home may constitute a principal dwelling for purposes of this chapter.

    (D) A dwelling owned by a trust may qualify as a homestead if it meets the requirements of subsection 6062(e) of this title.

    (E)(i) A homestead also includes a dwelling on the homestead parcel owned by a farmer as defined under section 3752 of this title and occupied as the permanent residence by a parent, sibling, child, grandchild of the farmer or by a shareholder, partner, or member of the farmer-owner, provided that the shareholder, partner, or member owns more than 50 percent of the farmer-owner, including attribution of stock ownership of a parent, sibling, child, or grandchild.

    (ii) A homestead further includes the principal dwelling of a widow or widower, provided the dwelling is owned by the estate of the deceased spouse and it is reasonably likely that the dwelling will pass to the widow or widower by law or valid will when the estate is settled.

    (F) A homestead also includes any other improvement or structure on the homestead parcel that is not used for business purposes. A homestead does not include that portion of a principal dwelling used for business purposes if the portion used for business purposes includes more than 25 percent of the floor space of the building.

    (G) For purposes of homestead declaration and application of the homestead property tax rate, “homestead” also means a residence that was the homestead of the decedent at the date of death and, from the date of death through the next April 1, is held by the estate of the decedent and not rented.

    (H) A homestead does not include any portion of a dwelling that is rented, and a dwelling is not a homestead for any portion of the year in which it is rented.

    (8) “Education spending” means “education spending” as defined in 16 V.S.A. § 4001(6).

    (9) “Municipality” means a city, town, unorganized town, village, grant, or gore; or, in the case of property located within the territorial limits of an incorporated school district, “municipality” means an incorporated school district.

    (10) “Nonhomestead property” means all property except:

    (A) Property that is exempt from the municipal property tax by law and not by vote of the municipality.

    (B) Property that is subject to the tax on railroads imposed by chapter 211, subchapter 2 of this title or the tax on telephone companies imposed by chapter 211, subchapter 6 of this title.

    (C) Homesteads declared in accordance with section 5410 of this title.

    (D) Personal property, machinery, inventory and equipment, ski lifts, and snow-making equipment for a ski area; provided, however, this subdivision (10) shall not exclude from the definition of “nonhomestead property” the following real or personal property:

    (i) utility cables and lines, poles, and fixtures (except those taxed under chapter 211, subchapter 6 of this title), provided that utility cables, lines, poles, and fixtures located on homestead property and owned by the person claiming the homestead shall be taxed as homestead property; and

    (ii) gas distribution lines (except aboveground meters, regulators and gauges, and leased water heaters are excluded personal property).

    (E) The excess valuation of property subject to tax increment financing in a tax increment financing district established under 24 V.S.A. chapter 53, subchapter 5 to the extent that the taxes generated on such excess valuation of property are committed under 24 V.S.A. § 1894 to finance tax increment financing district debt, provided that any increment in excess of the amounts committed shall be distributed in accordance with 24 V.S.A. § 1900.

    (F) Property owned by a municipality that is located within that municipality and that is used for municipal purposes, including the provision of utility services.

    (G) Machinery and equipment used directly in the processing of whey, whether or not such machinery or equipment is attached or affixed to real property.

    (H), (I) [Repealed.]

    (J) Buildings and fixtures of:

    (i) wind-powered electric generating facilities taxed under section 5402c of this title; and

    (ii) renewable energy plants generating electricity from solar power and energy storage facilities that are taxed under section 8701 of this title.

    (K) 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:

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

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

    (11) “Education property value” means the aggregate fair market value of all nonhomestead and homestead real property that is required to be listed at fair market value as certified during that year by the Director of Property Valuation and Review under section 5406 of this title, plus the aggregate value of property required to be listed at a value established under a stabilization agreement described under section 5404a of this title, plus the aggregate use value established under chapter 124 of this title of all nonhomestead real property that is enrolled in the use value appraisal program.

    [Subdivision (12) not in effect July 1, 2021 to June 30, 2029]

    (12) “Excess spending” means:

    (A) The per-equalized-pupil amount of the district’s education spending, as defined in 16 V.S.A. § 4001(6), plus any amount required to be added from a capital construction reserve fund under 24 V.S.A. § 2804(b).

    (B) In excess of 121 percent of the statewide average district education spending per equalized pupil increased by inflation, as determined by the Secretary of Education on or before November 15 of each year based on the passed budgets to date. As used in this subdivision, “increased by inflation” means increasing the statewide average district education spending per equalized pupil for fiscal year 2015 by the most recent New England Economic Project cumulative price index, as of November 15, for state and local government purchases of goods and services, from fiscal year 2015 through the fiscal year for which the amount is being determined.

    [Subdivision (13) effective until July 1, 2024]

    (13)(A) “Education property tax spending adjustment” means the greater of one or a fraction in which the numerator is the district's education spending plus excess spending, per equalized pupil, for the school year, and the denominator is the property dollar equivalent yield for the school year, as defined in subdivision (15) of this section.

    (B) “Education income tax spending adjustment” means the greater of one or a fraction in which the numerator is the district’s education spending plus excess spending, per equalized pupil, for the school year, and the denominator is the income dollar equivalent yield for the school year, as defined in subdivision (16) of this section.

    [Subdivision (13) effective July 1, 2024]

    (13)(A) “Education property tax spending adjustment” means the greater of one or a fraction in which the numerator is the district’s per pupil education spending plus excess spending for the school year, and the denominator is the property dollar equivalent yield for the school year, as defined in subdivision (15) of this section.

    (B) “Education income tax spending adjustment” means the greater of one or a fraction in which the numerator is the district’s per pupil education spending plus excess spending for the school year, and the denominator is the income dollar equivalent yield for the school year, as defined in subdivision (16) of this section.

    (14) “Domicile” means the principal dwelling of a person who has established permanent residence in the State. Intention to establish permanent residence is a factual determination to be made in the first instance by the Commissioner. No one factor is conclusive of whether a dwelling is a permanent residence; the Commissioner may consider any relevant factors, including the following: formal and informal statements of the declarant; the location of residences owned or leased by the declarant; where the declarant spends time; the declarant’s place of employment and business connections; the location of items of significant value (either monetary or sentimental) to declarant; where the declarant’s family lives; place of voter registration; place of issuance of automobile registration and driver’s license; previous permanent residency of the declarant; and address listed on federal and state income tax returns filed by the declarant.

    [Subdivision (15) effective until July 1, 2024]

    (15) “Property dollar equivalent yield” means the amount of spending per equalized pupil that would result if the homestead tax rate were $1.00 per $100.00 of equalized education property value and the statutory reserves under 16 V.S.A. § 4026 and section 5402b of this title were maintained.

    [Subdivision (15) effective July 1, 2024]

    (15) “Property dollar equivalent yield” means the amount of per pupil education spending that would result if the homestead tax rate were $1.00 per $100.00 of equalized education property value and the statutory reserves under 16 V.S.A. § 4026 and section 5402b of this title were maintained.

    [Subdivision (16) effective until July 1, 2024]

    (16) “Income dollar equivalent yield” means the amount of spending per equalized pupil that would result if the income percentage in subdivision 6066(a)(2) of this title were 2.0 percent and the statutory reserves under 16 V.S.A. § 4026 and section 5402b of this title were maintained.

    [Subdivision (16) effective July 1, 2024]

    (16) “Income dollar equivalent yield” means the amount of per pupil education spending that would result if the income percentage in subdivision 6066(a)(2) of this title were 2.0 percent and the statutory reserves under 16 V.S.A. § 4026 and section 5402b of this title were maintained. (Added 1997, No. 60, § 45, eff. Jan. 1, 1998; amended 1997, No. 71 (Adj. Sess.), §§ 7, 7a, eff. Jan. 1, 1998; 1997, No. 71 (Adj. Sess.), § 58, eff. June 26, 1997; 1997, No. 156 (Adj. Sess.), § 34, eff. April 29, 1998; 1999, No. 49, §§ 7, 18, eff. June 2, 1999; 2001, No. 53, § 1, eff. June 12, 2001; 2001, No. 144 (Adj. Sess.), § 3, eff. June 21, 2002; 2003, No. 66, § 289b; 2003, No. 68, § 3; 2003, No. 68, § 28, eff. June 18, 2003; 2003, No. 76 (Adj. Sess.), §§ 13, 14, eff. Feb. 17, 2004; 2005, No. 38, §§ 16, 24; 2005, No. 94 (Adj. Sess.), § 8, eff. March 8, 2006; 2005, No. 182 (Adj. Sess.), § 10; 2007, No. 66, §§ 11, 25, eff. July 1, 2007; 2007, No. 82, § 21, eff. July 1, 2007; 2007, No. 92 (Adj. Sess.), § 24; 2009, No. 44, § 19, eff. May 21, 2009; 2011, No. 45, § 13c, eff. May 24, 2011; 2011, No. 127 (Adj. Sess.), § 3, eff. Jan. 1, 2013; 2011, No. 143 (Adj. Sess.), § 37, eff. May 15, 2012; 2013, No. 60, §§ 1, 2; 2013, No. 73, § 38, eff. June 5, 2013; 2013, No. 80, § 11; 2013, No. 92 (Adj. Sess.), § 283, eff. Feb. 14, 2014; 2013, No. 174 (Adj. Sess.), §§ 57, 58, eff. Jan. 1, 2015; 2013, No. 174 (Adj. Sess.), §§ 59, 60; 2015, No. 46, § 27; 2015, No. 57, § 59, eff. June 11, 2015; 2015, No. 132 (Adj. Sess.), § 3a, eff. July 1, 2017; 2015, No. 157 (Adj. Sess.), § H.5, eff. Jan. 1, 2017; 2019, No. 46, § 1, eff. Jan. 1, 2020; 2019, No. 51, § 22, eff. June 10, 2019; 2021, No. 20, § 266; 2021, No. 54, § 20; 2021, No. 105 (Adj. Sess.), § 528, eff. July 1, 2022; 2021, No. 127 (Adj. Sess.), § 28, eff. July 1, 2024.)

  • § 5402. Education property tax liability

    (a) A statewide education tax is imposed on all nonhomestead and homestead property at the following rates:

    (1) The tax rate for nonhomestead property shall be $1.59 per $100.00.

    (2) The tax rate for homestead property shall be $1.00 multiplied by the education property tax spending adjustment for the municipality per $100.00 of equalized education property value as most recently determined under section 5405 of this title. The homestead property tax rate for each municipality that is a member of a union or unified union school district shall be calculated as required under subsection (e) of this section.

    (b) The statewide education tax shall be calculated as follows:

    (1) The Commissioner of Taxes shall determine for each municipality the education tax rates under subsection (a) of this section, divided by the municipality’s most recent common level of appraisal. The legislative body in each municipality shall then bill each property taxpayer at the homestead or nonhomestead rate determined by the Commissioner under this subdivision, multiplied by the education property tax grand list value of the property, properly classified as homestead or nonhomestead property and without regard to any other tax classification of the property. Statewide education property tax bills shall show the tax due and the calculation of the rate determined under subsection (a) of this section, divided by the municipality’s most recent common level of appraisal, multiplied by the current grand list value of the property to be taxed. Statewide education property tax bills shall also include language provided by the Commissioner pursuant to subsection 5405(g) of this title.

    (2) Taxes assessed under this section shall be assessed and collected in the same manner as taxes assessed under chapter 133 of this title with no tax classification other than as homestead or nonhomestead property; provided, however, that the tax levied under this chapter shall be billed to each taxpayer by the municipality in a manner that clearly indicates the tax is separate from any other tax assessed and collected under chapter 133, including an itemization of the separate taxes due. The bill may be on a single sheet of paper with the statewide education tax and other taxes presented separately and side by side.

    (3) If a district has not voted a budget by June 30, an interim homestead education tax shall be imposed at the base rate determined under subdivision (a)(2) of this section, divided by the municipality’s most recent common level of appraisal, but without regard to any spending adjustment under subdivision 5401(13) of this title. Within 30 days after a budget is adopted and the deadline for reconsideration has passed, the Commissioner shall determine the municipality’s homestead tax rate as required under subdivision (1) of this subsection.

    (c)(1) The treasurer of each municipality shall by December 1 of the year in which the tax is levied and on June 1 of the following year pay to the State Treasurer for deposit in the Education Fund one-half of the municipality’s statewide nonhomestead tax and one-half of the municipality’s homestead education tax, as determined under subdivision (b)(1) of this section.

    (2) The Secretary of Education shall determine each municipality’s net nonhomestead education tax payment and its net homestead education tax payment to the State based on grand list information received by the Secretary not later than the March 15 prior to the June 1 net payment. Payment shall be accompanied by a return prescribed by the Secretary of Education. Each municipality may retain 0.225 of one percent of the total education tax collected, only upon timely remittance of net payment to the State Treasurer or to the applicable school district or districts. Each municipality may also retain $15.00 for each late property tax credit claim filed after April 15 and before September 2, as notified by the Department of Taxes, for the cost of issuing a new property tax bill.

    (d) [Repealed.]

    [Subdivision (e) effective until July 1, 2024]

    (e) The Commissioner of Taxes shall determine a homestead education tax rate for each municipality that is a member of a union or unified union school district as follows:

    (1) For a municipality that is a member of a unified union school district, use the base rate determined under subdivision (a)(2) of this section and a spending adjustment under subdivision 5401(13) of this title based upon the education spending per equalized pupil of the unified union.

    (2) For a municipality that is a member of a union school district:

    (A) Determine the municipal district homestead tax rate using the base rate determined under subdivision (a)(2) of this section and a spending adjustment under subdivision 5401(13) of this title based on the education spending per total equalized pupil in the municipality who attends a school other than the union school.

    (B) Determine the union district homestead tax rate using the base rate determined under subdivision (a)(2) of this section and a spending adjustment under subdivision 5401(13) of this title based on the education spending per equalized pupil of the union school district.

    (C) Determine a combined homestead tax rate by calculating the weighted average of the rates determined under subdivisions (A) and (B) of this subdivision (2), with weighting based upon the ratio of union school equalized pupils from the member municipality to total equalized pupils of the member municipality; and the ratio of equalized pupils attending a school other than the union school to total equalized pupils of the member municipality. Total equalized pupils of the member municipality is based on the number of pupils who are legal residents of the municipality and attending school at public expense. If necessary, the Commissioner may adopt a rule to clarify and facilitate implementation of this subsection (e).

    [Subdivision (e) effective July 1, 2024]

    (e) The Commissioner of Taxes shall determine a homestead education tax rate for each municipality that is a member of a union or unified union school district as follows:

    (1) For a municipality that is a member of a unified union school district, use the base rate determined under subdivision (a)(2) of this section and a spending adjustment under subdivision 5401(13) of this title based upon the per pupil education spending of the unified union.

    (2) For a municipality that is a member of a union school district:

    (A) Determine the municipal district homestead tax rate using the base rate determined under subdivision (a)(2) of this section and a spending adjustment under subdivision 5401(13) of this title based on the per pupil education spending in the municipality who attends a school other than the union school.

    (B) Determine the union district homestead tax rate using the base rate determined under subdivision (a)(2) of this section and a spending adjustment under subdivision 5401(13) of this title based on the per pupil education spending of the union school district.

    (C) Determine a combined homestead tax rate by calculating the weighted average of the rates determined under subdivisions (A) and (B) of this subdivision (2), with weighting based upon the ratio of union school long-term membership, as defined in 16 V.S.A. § 4001(7), from the member municipality to total long-term membership of the member municipality; and the ratio of long-term membership attending a school other than the union school to total long-term membership of the member municipality. Total long-term membership of the member municipality is based on the number of pupils who are legal residents of the municipality and attending school at public expense. If necessary, the Commissioner may adopt a rule to clarify and facilitate implementation of this subsection (e). (Added 1997, No. 60, § 45, eff. Jan. 1, 1998; amended 1997, No. 71 (Adj. Sess.), § 8, eff. Jan. 1, 1998; 1997, No. 71 (Adj. Sess.), § 53; 1997, No. 71 (Adj. Sess.), § 73, eff. January 1, 1999; 1999, No. 1, § 60e, eff. March 31, 1999; 1999, No. 49, § 30, eff. June 2, 1999; 2001, No. 63, § 276, eff. June 16, 2001; 2001, No. 144 (Adj. Sess.), § 21, eff. June 21, 2002; 2003, No. 68, § 76, eff. June 18, 2003; 2003, No. 68, § 4, eff. for fiscal years 2005 and after; 2003, No. 76 (Adj. Sess.), § 6; 2003, No. 80 (Adj. Sess.), §§ 49a, 49c, eff. March 8, 2004; 2003, No. 130 (Adj. Sess.), § 13; 2005, No. 182 (Adj. Sess.), §§ 11, 12; 2007, No. 33, § 11, eff. May 18, 2007; 2007, No. 65, § 289; 2007, No. 82, § 12; 2007, No. 190 (Adj. Sess.), §§ 10, 11; 2009, No. 1 (Sp. Sess.), § H.23, eff. June 2, 2009; 2013, No. 92 (Adj. Sess.), § 284, eff. Feb. 14, 2014; 2013, No. 174 (Adj. Sess.), § 61, eff. June 4, 2014; 2015, No. 46, § 28; 2018, No. 11 (Sp. Sess.), § H.14, eff. July 1, 2019; 2019, No. 51, § 25; 2021, No. 20, § 267; 2021, No. 127 (Adj. Sess.), § 29, eff. July 1, 2024; 2021, No. 163 (Adj. Sess.), § 1, eff. June 1, 2022.)

  • § 5402a. Repealed. 2011, No. 143 (Adj. Sess.), § 57.

  • § 5402b. Statewide education tax yields; recommendation of the Commissioner

    (a) Annually, no later than December 1, the Commissioner of Taxes, after consultation with the Secretary of Education, the Secretary of Administration, and the Joint Fiscal Office, shall calculate and recommend a property dollar equivalent yield, an income dollar equivalent yield, and a nonhomestead property tax rate for the following fiscal year. In making these calculations, the Commissioner shall assume:

    (1) the homestead base tax rate in subdivision 5402(a)(2) of this title is $1.00 per $100.00 of equalized education property value;

    (2) the applicable percentage in subdivision 6066(a)(2) of this title is 2.0;

    (3) the statutory reserves under 16 V.S.A. § 4026 and this section were maintained at five percent; and

    (4) the percentage change in the average education tax bill applied to nonhomestead property and the percentage change in the average education tax bill of homestead property and the percentage change in the average education tax bill for taxpayers who claim a credit under subsection 6066(a) of this title are equal.

    (b) For each fiscal year, the property dollar equivalent yield and the income dollar equivalent yield shall be the same as in the prior fiscal year, unless set otherwise by the General Assembly.

    (c) Annually, on or before December 1, the Joint Fiscal Office shall prepare and publish an official, annotated copy of the Education Fund Outlook. The Emergency Board shall review the Outlook at its meetings. As used in this section, “Education Fund Outlook” means the projected revenues and expenses associated with the Education Fund for the following fiscal year, including projections of different categories of educational expenses and costs. (Added 2003, No. 68, § 5, eff. June 18, 2003; amended 2005, No. 185 (Adj. Sess.), § 10; 2009, No. 160 (Adj. Sess.), §§ 50, 51, eff. June 4, 2010; 2013, No. 92 (Adj. Sess.), § 285, eff. Feb. 14, 2014; 2013, No. 174 (Adj. Sess.), § 52; 2015, No. 46, § 32; 2015, No. 132 (Adj. Sess.), § 4; 2018, No. 11 (Sp. Sess.), §§ H.10a, H.29.)

  • § 5402c. Wind-powered electric generating facilities tax

    (a) A facility certified by the Commissioner of Public Service as a facility that produces electrical energy for resale generated solely from wind power, that has an installed capacity of at least one megawatt, that was placed in service after January 1, 2007, and that holds a valid certificate of public good issued under 30 V.S.A. § 248, shall be assessed an alternative education property tax on its buildings and fixtures used directly and exclusively in the generation of electrical energy from wind power.

    (b) The tax shall be imposed at a rate per kWh of electrical energy produced by the certified facility, as determined by the Public Service Department for the six months ending April 30 and the six months ending October 31 each year. The rate of the tax shall be $0.003.

    (c) In no case shall the tax imposed for any six-month period be less than an amount equal to the rate per kWh imposed by this subsection multiplied by the number of kWh that would be generated if the facility operated at 15 percent of the facility’s average capacity factor.

    (d) The tax imposed by this section shall be paid to the Commissioner of Taxes by the person or entity then owning or operating the certified facility by December 1 for the period ending October 31 and by June 1 for the period ending April 30 for deposit into the Education Fund. A person or entity failing to make returns or pay the tax imposed by this section within the time required shall be subject to and governed by the provisions of sections 3202 and 3203 and subchapters 8 and 9 of chapter 151 of this title.

    (e) Unless buildings and fixtures are taxed under this section, they shall remain subject to taxation under section 5402 of this title. Buildings and fixtures subject to the education property tax under this section shall not be taken into account in determining the common level of appraisal for the municipality. (Added 2007, No. 92 (Adj. Sess.), § 25; amended 2011, No. 127 (Adj. Sess.), § 5, eff. Jan. 1, 2013.)

  • § 5403. Assessment districts

    (a) A municipality may vote at any regular or special meeting to merge with one or more other municipalities in the same unified union school district to create or join an assessment district for the purpose of standardized property valuation.

    (b) All municipalities merged into an assessment district shall agree to implement standardized assessment procedures approved by the Commissioner. The Commissioner shall provide written guidance to municipalities relating to how they may receive approval under this subsection.

    (c) A vote to merge with an assessment district shall be binding on a municipality for five years. After five years, a municipality may vote at any regular or special meeting to leave the assessment district, unless the assessment district has consolidated all administrative functions.

    (d) All municipalities within an assessment district shall be treated as a single municipality for purposes of the equalization process established by section 5405 of this chapter.

    (e) Municipalities within an assessment district shall maintain independent grand lists for municipal taxation as well as independent processes for grievances, property valuation appeals, abatements, grand list filing, use value appraisal parcel management, reappraisal, and financial interaction with the Agency of Education, unless the Commissioner, in writing, authorizes the municipalities of an assessment district to consolidate all property valuation administrative functions. (Added 2019, No. 51, § 26.)

  • § 5404. Determination of education property tax grand list

    (a) Municipalities shall determine the education property tax grand list by calculating one percent of the listed value of nonhomestead and homestead real property as provided in this section. The listed value of all nonhomestead and homestead real property in a municipality shall be its fair market value, its value established under a stabilization agreement described in section 5404a of this title, or the use value of property enrolled in a Use Value Program under chapter 124 of this title. If a homestead is located on a parcel of greater than two acres, the entire parcel shall be appraised at fair market value; the housesite shall then be appraised as if it were situated on a separate parcel, and the value of the housesite shall be subtracted from the value of the total parcel to determine the value of the remainder of the parcel.

    (b) Annually, on or before August 15, the clerk of a municipality, or the supervisor of an unorganized town or gore, shall transmit to the Director in an electronic or other format as prescribed by the Director: education and municipal grand list data, including exemption information and grand list abstracts; tax rates; and the total amount of taxes assessed in the town or unorganized town or gore. The data transmitted shall identify each parcel by a parcel identification number assigned under a numbering system prescribed by the Director. Municipalities may continue to use existing numbering systems in addition to, but not in substitution for, the parcel identification system prescribed by the Director. If changes or additions to the grand list are made by the listers or other officials authorized to do so after such abstract has been so transmitted, such clerks shall forthwith certify the same to the Director.

    (c) If a town clerk or the legislative body fails without good cause, as determined by the Commissioner, to transmit the grand list data or the tax data in a timely manner and in the format required by the Director, the Commissioner shall notify the Secretary of Transportation and the Secretary of Education, who shall withhold all general and other aid payments owing to the municipality until the grand list information is filed as required by the Director under subsection (b) of this section. Federal funds are exempt from withholding if either Secretary has an opinion of counsel that withholding would be a violation of federal law.

    (d) Municipalities shall include, on all property tax bills, the parcel identification number prescribed in subsection (b) of this section. (Added 1997, No. 60, § 45, eff. Jan. 1, 1998; amended 2003, No. 68, § 29, eff. June 18, 2003; 2009, No. 160 (Adj. Sess.), § 5, eff. June 4, 2010; 2013, No. 92 (Adj. Sess.), § 286, eff. Feb. 14, 2014.)

  • § 5404a. Tax stabilization agreements; tax increment financing districts

    (a) A tax agreement or exemption shall affect the education property tax grand list of the municipality in which the property subject to the agreement is located if the agreement or exemption is:

    (1) A prior agreement, meaning that it was:

    (A) a tax stabilization agreement for any purpose authorized under 24 V.S.A. § 2741 or comparable municipal charter provisions entered into or proposed and voted by the municipality before July 1, 1997, or a property tax exemption adopted by vote pursuant to chapter 125 of this title or comparable municipal charter provisions before July 1, 1997; or

    (B) an agreement relating to property sold or transferred by the New England Power Company of its Connecticut River system and its facilities along the Deerfield River that was warned before September 1, 1997.

    (2) A tax stabilization agreement relating to industrial or commercial property entered into under 24 V.S.A. § 2741 or comparable municipal charter provisions.

    (3) An agreement relating to affordable housing, which may be approved under this subdivision by the Commissioner of Taxes upon recommendation of the Commissioner of Housing and Community Affairs, provided the agreement provides either for new construction housing projects or rehabilitated preexisting housing projects and secures federal financial participation that may include projects financed with federal low income housing tax credits.

    (4) An exemption of property owned by a nonprofit volunteer fire, rescue, or ambulance organization and used for the purposes of the organization, adopted, extended, or renewed by vote of a municipality under chapter 125 of this title or comparable municipal charter provision after July 1, 1997.

    (5) An exemption of property owned by a municipality situated in another municipality, which has been exempted from municipal property taxes by vote of the municipality in which the property is situated and that is used for municipal forest lands, municipal water supply, or for other noncommercial municipal purposes. To be exempted under this subsection, the property must have been voted an exemption by the municipality before January 1, 1998, and such exemption may be extended or renewed thereafter by a similar vote of the municipality.

    (6) An exemption of a portion of the value of a qualified rental unit parcel. An owner of a qualified rental unit parcel shall be entitled to an exemption on the education property tax grand list of 10 percent of the grand list value of the parcel, multiplied by the ratio of square footage of improvements used for or related to residential rental purposes to total square footage of all improvements, multiplied by the ratio of qualified rental units to total residential rental units on the parcel. “Qualified rental units” means residential rental units that are subject to rent restriction under provisions of State or federal law, but excluding units subject to rent restrictions under only one of the following programs: Section 8 moderate rehabilitation, Section 8 housing choice vouchers, or Section 236 or Section 515 rural development rental housing. A municipality shall allow the percentage exemption under this subsection upon presentation by the taxpayer to the municipality, by April 1, of a certificate of education grand list value exemption obtained from the Vermont Housing Finance Agency (VHFA). VHFA shall issue a certificate of exemption upon presentation by the taxpayer of information that VHFA and the Commissioner shall require. A certificate of exemption issued by VHFA under this subsection shall expire upon transfer of the building, upon expiration of the rent restriction, or after 10 years, whichever first occurs. The certificate of exemption may be renewed once after 10 years if VHFA finds that the property continues to meet the requirements of this subsection.

    (b) An agreement affecting the education property tax grand list defined under subsection (a) of this section shall reduce the municipality’s education property tax liability under this chapter for the duration of the agreement or exemption without extension or renewal, and for a maximum of 10 years. A municipality’s property tax liability under this chapter shall be reduced by any difference between the amount of the education property taxes collected on the subject property and the amount of education property taxes that would have been collected on such property if its fair market value were taxed at the equalized nonhomestead rate for the tax year.

    (c) Tax agreements not affecting the education property tax grand list. A tax agreement shall not affect the education property tax grand list if it is:

    (1) A tax exemption adopted by vote of a municipality after July 1, 1997 under chapter 125 of this title, or voted under a comparable municipal charter provision or other provision of law for property owned by nonprofit organizations used for public, pious, or charitable purposes, or exemptions of property of a nonprofit volunteer fire, rescue, or ambulance organization adopted by vote of a municipality.

    (2) A tax stabilization agreement relating to agricultural property, forestland, open space land, or alternate energy generating plants entered into after July 1, 1997 by a municipality under 24 V.S.A. § 2741.

    (3) A tax stabilization agreement relating to commercial or industrial property entered into after July 1, 1997 by a municipality under 24 V.S.A. § 2741, or a property tax exemption for purposes of economic development adopted by vote after July 1, 1997.

    (d) Tax agreements not affecting the education property tax grand list as defined in subsection (c) of this section shall not reduce the total education property tax liability of the municipality to the State under this chapter. However, such agreements shall reduce the education property tax liability of the owner of the property subject to the agreement to the extent provided in the agreement. A municipality shall assess a tax on its municipal grand list at a rate sufficient to raise an amount equal to the difference between the municipality’s total education property tax liability to the State under this chapter and the amount collected from education property taxes in the municipality after reductions for all tax agreements in effect in the municipality as defined in subsection (c) of this section. Any such tax assessed under this section shall be identified on the tax bill of the municipality as a separate tax for municipally voted tax agreements.

    (e) [Repealed.]

    (f) A municipality that establishes a tax increment financing district under 24 V.S.A. chapter 53, subchapter 5 shall collect all property taxes on properties contained within the district and apply not more than 70 percent of the State education property tax increment, and not less than 85 percent of the municipal property tax increment, to repayment of financing of the improvements and related costs for up to 20 years pursuant to 24 V.S.A. § 1894, if approved by the Vermont Economic Progress Council pursuant to this section, subject to the following:

    (1) In a municipality with one or more approved districts, the Council shall not approve an additional district until the municipality retires the debt incurred for all of the districts in the municipality.

    (2) The Council shall not approve more than six districts in the State, and not more than two per county, provided:

    (A) The districts listed in 24 V.S.A. § 1892(d) shall not be counted against the limits imposed in this subdivision (2).

    (B) The Council shall consider complete applications in the order they are submitted, except that if during any calendar month the Council receives applications for more districts than are actually available in a county, the Council shall evaluate each application and shall approve the application that, in the Council’s discretion, best meets the economic development needs of the county.

    (C) If, while the General Assembly is not in session, the Council receives applications for districts that would otherwise qualify for approval but, if approved, would exceed the six-district limit in the State, the Council shall make one or more presentations to the Emergency Board concerning the applications, and the Emergency Board may, in its discretion, increase the six-district limit.

    (3)(A) A municipality shall immediately notify the Council if it resolves not to incur debt for an approved district within five years of approval or a five-year extension period as required in 24 V.S.A. § 1894.

    (B) Upon receiving notification pursuant to subdivision (A) of this subdivision (3), the Council shall terminate the district and may approve a new district, subject to the provisions of this section and 24 V.S.A. chapter 53, subchapter 5.

    (g) Any use of education property tax increment approved under subsection (f) of this section shall be in addition to any other payments to the municipality under 16 V.S.A. chapter 133, shall remain available to the municipality for the full period authorized under 24 V.S.A. § 1894, and shall be restricted only to the extent that the real property development giving rise to the increased value to the grand list fails to occur within the authorized period or by the enforcement provided by subsection (j) of this section.

    (h) To approve utilization of incremental revenues pursuant to subsection (f) of this section, the Vermont Economic Progress Council shall do all the following:

    (1) Application review.

    (A) Review each application to determine that the infrastructure improvements proposed to serve the tax increment financing district and the proposed development in the district would not have occurred as proposed in the application, or would have occurred in a significantly different and less desirable manner than as proposed in the application, but for the proposed utilization of the incremental tax revenues.

    (B) The review shall take into account:

    (i) the amount of additional time, if any, needed to complete the proposed development within the tax increment district and the amount of additional cost that might be incurred if the project were to proceed without education property tax increment financing;

    (ii) how the proposed development components and size would differ, if at all, including, if applicable to the development, in the number of units of affordable housing, as defined in 24 V.S.A. § 4303, without education property tax increment financing; and

    (iii)(I) the amount of additional revenue expected to be generated as a result of the proposed development;

    (II) the percentage of that revenue that shall be paid to the Education Fund;

    (III) the percentage that shall be paid to the municipality; and

    (IV) the percentage of the revenue paid to the municipality that shall be used to pay financing incurred for development of the tax increment financing district.

    (2) Process requirements. Determine that each application meets all of the following four requirements:

    (A) The municipality held public hearings and established a tax increment financing district in accordance with 24 V.S.A. §§ 1891-1900.

    (B) The municipality has developed a tax increment financing district plan, including a project description; a development financing plan; a pro forma projection of expected costs; a projection of revenues; a statement and demonstration that the project would not proceed without the allocation of a tax increment; evidence that the municipality is actively seeking or has obtained other sources of funding and investment; and a development schedule that includes a list, a cost estimate, and a schedule for public improvements and projected private development to occur as a result of the improvements.

    (C) The municipality has approved or pledged the utilization of incremental municipal tax revenues for purposes of the district in the same proportion as the utilization of education property tax revenues approved by the Vermont Economic Progress Council for the tax increment financing district.

    (D) The proposed infrastructure improvements and the projected development or redevelopment are compatible with approved municipal and regional development plans, and the project has clear local and regional significance for employment, housing, and transportation improvements.

    (3) Location criteria. Determine that each application meets at least two of the following three criteria:

    (A) The development is:

    (i) compact;

    (ii) high density; or

    (iii) located in or near existing industrial areas.

    (B) The proposed district is within an approved growth center, designated downtown, designated village center, new town center, or neighborhood development area.

    (C) The development will occur in an area that is economically distressed, which for the purposes of this subdivision means that the municipality in which the area is located has at least one of the following:

    (i) a median family income that is not more than 80 percent of the statewide median family income as reported by the Vermont Department of Taxes for the most recent year for which data are available;

    (ii) an annual average unemployment rate that is at least one percent greater than the latest annual average statewide unemployment rate as reported by the Vermont Department of Labor; or

    (iii) a median sales price for residential properties under six acres that is not more than 80 percent of the statewide median sales price for residential properties under six acres as reported by the Vermont Department of Taxes.

    (4) Project criteria. Determine that the proposed development within a tax increment financing district will accomplish at least three of the following five criteria:

    (A) The development within the tax increment financing district clearly requires substantial public investment over and above the normal municipal operating or bonded debt expenditures.

    (B) The development includes new or rehabilitated affordable housing, as defined in 24 V.S.A. § 4303.

    (C) The project will affect the remediation and redevelopment of a brownfield located within the district. As used in this section, “brownfield” means an area in which a hazardous substance, pollutant, or contaminant is or may be present, and that situation is likely to complicate the expansion, development, redevelopment, or reuse of the property.

    (D) The development will include at least one entirely new business or business operation or expansion of an existing business within the district, and this business will provide new, quality, full-time jobs that meet or exceed the prevailing wage for the region as reported by the Department of Labor.

    (E) The development will enhance transportation by creating improved traffic patterns and flow or creating or improving public transportation systems.

    (i) The Vermont Economic Progress Council and the Department of Taxes shall make an annual report to the Senate Committee on Economic Development, Housing and General Affairs and the House Committees on Commerce and Economic Development and on Ways and Means on or before April 1. The report shall include, in regard to each existing tax increment financing district, the date of creation, a profile of the district, a map of the district, the original taxable value, the scope and value of projected and actual improvements and developments, projected and actual incremental revenue amounts and division of the increment revenue between district debt, the Education Fund, the special account required by 24 V.S.A. § 1896 and the municipal General Fund, projected and actual financing, and a set of performance measures developed by the Vermont Economic Progress Council, which shall include the number of jobs created in the district, what sectors experienced job growth, and the amount of infrastructure work performed by Vermont firms. The provisions of 2 V.S.A. § 20(d) (expiration of required reports) shall not apply to the report to be made under this subsection.

    (j)(1) Authority to adopt rules. The Vermont Economic Progress Council is hereby granted authority to adopt rules in accordance with 3 V.S.A. chapter 25 for the purpose of providing clarification and detail for administering the provisions of 24 V.S.A. chapter 53, subchapter 5 and the tax increment financing district provisions of this section. A single rule shall be adopted for all tax increment financing districts that will provide further clarification for statutory construction and include a process whereby a municipality may distribute excess increment to the Education Fund as allowed under 24 V.S.A. § 1900. From the date the rules are adopted, the municipalities with districts in existence prior to 2006 are required to abide by the governing rule and any other provisions of the law in force; provided, however, that the rule shall indicate which specific provisions are not applicable to those districts in existence prior to January 2006.

    (2) Authority to issue decisions.

    (A) The Secretary of Commerce and Community Development, after reasonable notice to a municipality and an opportunity for a hearing, is authorized to issue decisions to a municipality on questions and inquiries concerning the administration of tax increment financing districts, statutes, rules, noncompliance with 24 V.S.A. chapter 53, subchapter 5, and any instances of noncompliance identified in audit reports conducted pursuant to subsection (l) of this section.

    (B) The Vermont Economic Progress Council shall prepare recommendations for the Secretary prior to the issuance of a decision. As appropriate, the Council may prepare such recommendations in consultation with the Commissioner of Taxes, the Attorney General, and the State Treasurer. In preparing recommendations, the Council shall provide a municipality with a reasonable opportunity to submit written information in support of its position. The Secretary shall review the recommendations of the Council and issue a final written decision on each matter within 60 days of the receipt of the recommendations. However, pursuant to subdivision (5) of this subsection (j), the Secretary may permit an appeal to be taken by any party to a Superior Court for determination of questions of law in the same manner as the Supreme Court may by rule provide for appeals before final judgment from a Superior Court before issuing a final decision.

    (3) Remedy for noncompliance. If the Secretary issues a decision under subdivision (2) of this subsection that includes a finding of noncompliance and that noncompliance has resulted in the improper reduction in the amount due the Education Fund, the Secretary, unless and until he or she is satisfied that there is no longer any such failure to comply, shall request that the State Treasurer bill the municipality for the total identified underpayment. The amount of the underpayment shall be due from the municipality upon receipt of the bill. If the municipality does not pay the underpayment amount within 60 days, the amount may be withheld from any funds otherwise payable by the State to the municipality or a school district in the municipality or of which the municipality is a member.

    (4) Referral; Attorney General. In lieu of or in addition to any action authorized in subdivision (3) of this subsection (j), the Secretary of Commerce and Community Development or the State Treasurer may refer the matter to the Office of the Attorney General with a recommendation that an appropriate civil action be initiated.

    (5) Appeal; hearing officer. A hearing that is held pursuant to this subsection shall be subject to the provisions of 3 V.S.A. chapter 25 relating to contested cases. The hearing shall be conducted by the Secretary or by a hearing officer appointed by the Secretary. If a hearing is conducted by a hearing officer, the hearing officer shall have all authority to conduct the hearing that is provided for in the applicable contested case provisions of 3 V.S.A. chapter 25, including issuing findings of fact, hearing evidence, and compelling, by subpoena, the attendance and testimony of witnesses.

    (k) The Vermont Economic Progress Council may require a third-party financial and technical analysis as part of the application of a municipality applying for approval of a tax increment financing district pursuant to this section. The applicant municipality shall pay a fee to cover the actual cost of the analysis to be deposited in a special fund, which shall be managed pursuant to chapter 7, subchapter 5 of this title and be available to the Council to pay the actual cost of the analysis.

    (l) The State Auditor of Accounts shall conduct performance audits of all tax increment financing districts. The cost of conducting each audit shall be considered a “related cost” as defined in 24 V.S.A. § 1891(6) and shall be billed back to the municipality pursuant to subsection 168(b) of this title. Audits conducted pursuant to this subsection shall include a review of a municipality’s adherence to relevant statutes and rules adopted by the Vermont Economic Progress Council pursuant to subsection (j) of this section, an assessment of record keeping related to revenues and expenditures, and a validation of the portion of the tax increment retained by the municipality and used for debt repayment and the portion directed to the Education Fund.

    (1)(A) For municipalities with a district created prior to January 1, 2006 and a debt repayment schedule that anticipates retention of education increment beyond fiscal year 2016, an audit shall be conducted when approximately three-quarters of the period for retention of education increment has elapsed, and at the end of that same period, an audit shall be conducted for the final one-quarter period for retention of education increment.

    (B) Notwithstanding subdivision (1)(A) of this subsection (l), the audit schedule for the Burlington Waterfront Tax Increment Financing District shall be as follows:

    (i) an audit shall be conducted on or after October 1, 2021;

    (ii) an audit shall be conducted not more than three years from the date debt is incurred as allowed by 2020 Acts and Resolves No. 175, Sec. 29(4); and

    (iii) a final audit shall be conducted at the end of the retention period for the District.

    (2) For municipalities with a district created after January 1, 2006 and approved by the Vermont Economic Progress Council, an audit shall be conducted five years after the first debt is incurred and a second audit seven years after completion of the first audit. A final audit will be conducted at the end of the period for retention of education increment. (Added 1997, No. 60, § 45, eff. Jan. 1, 1998; amended 1997, No. 71 (Adj. Sess.), § 47, eff. March 11, 1998; 2003, No. 76 (Adj. Sess.), § 7, eff. Jan. 1, 2004; 2003, No. 163 (Adj. Sess.), § 33, eff. Jan. 1, 2004; 2005, No. 184 (Adj. Sess.), § 2h; 2007, No. 81, §§ 12, 13, eff. June 11, 2007; 2007, No. 190 (Adj. Sess.), §§ 61, 63, 64; 2009, No. 47, § 6, eff. May 28, 2009; 2011, No. 45, § 15a, eff. May 24, 2011; 2013, No. 80, §§ 12-16, eff. June 7, 2013; 2013, No. 174 (Adj. Sess.), §§ 13, 14, eff. June 4, 2014; 2015, No. 11, § 28; 2015, No. 57, § 60, eff. Jan. 1, 2014; 2015, No. 157 (Adj. Sess.), § H.6, eff. Jan. 1, 2017; 2017, No. 69, § J.4, eff. June 28, 2017; 2017, No. 154 (Adj. Sess.), § 33, eff. May 21, 2018; 2019, No. 14, § 77, eff. April 30, 2019; 2021, No. 73, § 26; 2021, No. 74, § E.130.1; 2021, No. 105 (Adj. Sess.), § 529, eff. July 1, 2022.)

  • § 5404b. Hydroelectric property; conservation easements; transfers

    Notwithstanding any other provision of law, including the provisions of subdivisions 3481(1) and 3802(1) of this title:

    (1) any real property subject to conservation easements granted pursuant to the terms of any agreement executed on or after January 1, 1997 between companies owning real property used for hydroelectric generation in this State and the State of Vermont shall continue to be assessed and property taxes collected as if such property were not subject to such easements;

    (2) any real property purchased by the State pursuant to the terms of any agreement executed on or after January 1, 1997 between companies owning real property used for hydroelectric generation in this State and the State of Vermont, which property continues to be owned by the State or by some successor owner that would otherwise be exempt from property taxes, shall continue to be assessed and property taxes collected as if such property were not so purchased by the State; and

    (3) any real property and fixtures used for hydroelectric generation and purchased by the Town of Rockingham on or after January 1, 2002, which property and fixtures continue to be owned by the Town of Rockingham and used for purposes of hydroelectric generation, shall continue to be listed on the education property tax grand list and assessed as if such property were not so purchased by the Town of Rockingham. The Town shall, in lieu of property taxes, pay to any governmental body authorized to levy property taxes the amount that would be assessable as property taxes on the real and tangible personal property if that property were the property of a utility. These payments shall be due, and bear interest if unpaid, as in the case of taxes on the property of a utility. For purposes of these payments in lieu of taxes, the assessors of the taxing authority shall make a valuation and assessment of the property and determine the tax that would be assessable if the property were owned by a utility. Payments in lieu of taxes made under this chapter shall be treated in the same manner as taxes for the purposes of all procedural and substantive provisions of law, including appeals, now and hereinafter in effect applicable to assessment and taxation of real and personal property, collection and abatement of these taxes, and the raising of public revenues. (Added 1997, No. 60, § 45, eff. Jan. 1, 1998; amended 2003, No. 121 (Adj. Sess.), § 100, eff. June 8, 2004.)

  • § 5405. Determination of equalized education property tax grand list and coefficient of dispersion

    (a) Annually, on or before April 1, the Commissioner shall determine the equalized education property tax grand list and coefficient of dispersion for each municipality in the State; provided, however, that for purposes of equalizing grand lists pursuant to this section, the equalized education property tax grand list of a municipality that establishes a tax increment financing district shall include the fair market value of the property in the district and not the original taxable value of the property, and further provided that the unified towns and gores of Essex County may be treated as one municipality for the purpose of determining an equalized education property grand list and a coefficient of dispersion, if the Director determines that all such entities have a uniform appraisal schedule and uniform appraisal practices.

    (b) The sum of all municipal equalized education property tax grand lists shall be the equalized education property tax grand list for the State.

    (c) In determining the fair market value of property that is required to be listed at fair market value, the Commissioner shall take into consideration those factors required by section 3481 of this title. The Commissioner shall value property as of April 1 preceding the determination and shall take account of all homestead declaration information available before October 1 each year.

    (d) Any determination of fair market value made by the Commissioner under this section shall be based upon such methods as, in the judgment of the Commissioner and in view of the resources available for that purpose, shall be appropriate to support that determination. If the common level of appraisal is calculated using the weighted mean of ratios, any outlier shall be carefully reviewed and deleted if it will significantly affect the weighted mean, particularly if the outlier is a high-value property.

    (e) Individual appraisals performed by the Division of Property Valuation and Review may be used to supplement actual sales when necessary to obtain a representative sample.

    (f) Within the limits of the resources available for that purpose, the Commissioner may employ such individuals, whether on a permanent, temporary, or contractual basis, as shall be necessary, in the judgment of the Commissioner, to aid in the performance of duties under this section. The Commissioner shall pay each municipality the sum of $1.00 per grand list parcel in the municipality for services provided to the Commissioner in connection with the performance of duties under this section. Each municipality shall deposit payments received under this subsection into a special fund that shall be used to support the preparation of the education property tax grand list.

    (g) The Commissioner shall provide to municipalities for the front of property tax bills the district homestead property tax rate before equalization, the nonresidential tax rate before equalization, and the calculation process that creates the equalized homestead and nonhomestead tax rates. The Commissioner shall further provide to municipalities for the back of property tax bills an explanation of the common level of appraisal, including its origin and purpose. (Added 1997, No. 60, § 45, eff. Jan. 1, 1998; amended 1999, No. 49, §§ 19, 49, eff. June 2, 1999; 2003, No. 68, §§ 41, 85, eff. June 18, 2003; 2003 No. 68, § 85, eff. for fiscal year 2005; 2003, No. 76 (Adj. Sess.), § 1, eff. Feb. 17, 2004; 2003, No. 76 (Adj. Sess.), § 28, eff. Jan. 1, 2004; 2009, No. 160 (Adj. Sess.), § 14, eff. June 4, 2010; 2013, No. 73, § 39, eff. June 5, 2013; 2019, No. 51, § 27; 2019, No. 175 (Adj. Sess.), § 3, eff. Oct. 8, 2020; 2021, No. 20, § 268.)

  • § 5406. Notice of fair market value and coefficient of dispersion

    (a) Not later than January 1 of each year, the Director of Property Valuation and Review shall notify the town clerk and chair of the board of listers of each municipality of the equalized education property value and the coefficient of dispersion of that town for the prior year and of the manner by which the equalized education property value and coefficient of dispersion were determined by the Director.

    (b) Not later than April 1 of each year, the Director shall certify to the Secretary of Education the equalized education property value and coefficient of dispersion for the prior year of every municipality of the State.

    (c) If the Director of Property Valuation and Review certifies that a municipality has completed a townwide reappraisal, the common level of appraisal for that municipality shall be equal to its new grand list value divided by its most recent equalized grand list value, for purposes of determining education property tax rates. (Added 1997, No. 60, § 45, eff. Jan. 1, 1998; amended 1997, No. 71 (Adj. Sess.), § 10, eff. Jan. 1, 1998; 2003, No. 76 (Adj. Sess.), § 9, eff. Feb. 17, 2004; 2005, No. 75, § 12; 2013, No. 92 (Adj. Sess.), § 287, eff. Feb. 14, 2014.)

  • § 5407. Repealed. 2018, No. 2 (Sp. Sess.), § 4.

  • § 5408. Petition for redetermination

    (a) Not later than 35 days after mailing of a notice under section 5406 of this title, a municipality may petition the Director of Property Valuation and Review for a redetermination of the municipality’s equalized education property value and coefficient of dispersion. The petition shall be in writing and shall be signed by the chair of the legislative body of the municipality or designee.

    (b)(1) Upon receipt of a petition for redetermination under subsection (a) of this section, the Director shall, after written notice, grant a hearing upon the petition to the aggrieved town.

    (2) The Director shall thereafter notify the town and the Secretary of Education of his or her redetermination of the equalized education property value and coefficient of dispersion of the town or district, in the manner provided for notices of original determinations under section 5406 of this title.

    (c)(1) A municipality, within 30 days after the Director’s redetermination, may appeal the redetermination to the Superior Court of the county in which the municipality is located. The Superior Court shall hear the matter de novo in the manner provided by Rule 74 of the Vermont Rules of Civil Procedure.

    (2) An appeal from the decision of the Superior Court shall be to the Supreme Court under the Vermont Rules of Appellate Procedure. (Added 1997, No. 60, § 45, eff. Jan. 1, 1998; amended 1999, No. 49, § 52, eff. June 2, 1999; 2013, No. 92 (Adj. Sess.), § 288, eff. Feb. 14, 2014; 2013, No. 174 (Adj. Sess.), § 16, eff. June 4, 2014; 2018, No. 2 (Sp. Sess.), § 5.)

  • § 5409. Duties of municipalities and administration

    The following shall apply with regard to the statewide education tax imposed under this chapter:

    (1) Late payments of the tax by a municipality to the State shall be assessed interest at a per diem rate of eight percent per annum of the amount due. If a payment is more than 90 days overdue, any State funds due the municipality shall be withheld.

    (2) If by August 1 a municipality has failed to issue notices of assessment of the statewide education tax, or if the municipality fails for more than 90 days after the due date for any installment payment to enforce the tax in the municipality, then the Commissioner of Taxes shall either issue notices of assessment or collect the tax, or both, or bring appropriate court action to require the municipal officials to issue notices and collect the tax, as the Commissioner deems necessary.

    (3) In any case of administration under subdivision (2) of this section by the Commissioner of Taxes of education property tax:

    (A) Sections 3202, 3203, 5868, 5882–5887, and 5891–5895 of this title, as amended, shall apply in the same manner as to income tax.

    (B) Persons aggrieved by decisions of the listers may appeal in the manner provided for property tax appeals in chapter 131 of this title, and the Commissioner of Taxes shall have all the powers described in chapter 133 of this title.

    (C) The Commissioner may abate in whole or in part the statewide education taxes of a taxpayer who has been granted an abatement of municipal taxes under 24 V.S.A. § 1535.

    (4) [Repealed.]

    (5) In case of insufficient property tax payment by a taxpayer to a municipality, payments shall be allocated first to municipal property tax and next to statewide education tax. In case of insufficient payment by a taxpayer to the Department of Taxes, payments shall be allocated first to liabilities other than education taxes and next to education tax.

    (6) In case of overpayment by a taxpayer who has an income tax liability under chapter 151 of this title and a homestead property tax liability, a refund of the overpayment, after accounting for any benefit amount allowed under chapter 154 of this title, shall be deemed to be a refund of income tax for purposes of debt setoff under chapter 151, subchapter 12 of this title.

    (7) Notwithstanding section 435 of this title, the Commissioner shall deposit the revenue from taxes imposed under this chapter in the education fund.

    (8) A municipality’s liability to the State for education taxes shall not be reduced by any early payment property tax discount or similar discount offered by the municipality. (Added 1997, No. 60, § 45, eff. Jan. 1, 1998; amended 1997, No. 71 (Adj. Sess.), § 11, eff. Jan. 1, 1998; 1997, No. 71 (Adj. Sess.), § 75, eff. January 1, 1999; 1997, No. 156 (Adj. Sess.), § 50, eff. April 29, 1998; 2003, No. 68, § 21, eff. June 18, 2003; 2019, No. 14, § 78, eff. April 30, 2019; 2021, No. 105 (Adj. Sess.), § 530, eff. July 1, 2022.)

  • § 5410. Declaration of homestead

    (a) A homestead owner shall declare ownership of a homestead for purposes of education property tax.

    (b) Annually, on or before the due date for filing the Vermont income tax return, without extension, each homestead owner shall, on a form prescribed by the Commissioner, which shall be verified under the pains and penalties of perjury, declare the owner’s homestead, if any, as of, or expected to be as of, April 1 of the year in which the declaration is made.

    (c) In the event that an unsigned but otherwise completed homestead declaration is filed with the declarant’s signed State income tax return, the Commissioner may treat such declaration as signed by the declarant.

    (d) The Commissioner shall provide a list of homesteads in each town to the town listers by May 15. The listers shall notify the Commissioner by June 1 of any residences on the Commissioner’s list that do not qualify as homesteads. The listers shall separately identify homesteads in the grand list.

    (e) The Commissioner shall adopt rules governing the eligibility requirements for declaring a homestead.

    (f) [Repealed.]

    (g) If the property identified in a declaration under subsection (b) of this section is not the taxpayer’s homestead or if the owner of a homestead fails to declare a homestead as required under this section, the Commissioner shall notify the municipality, and the municipality shall issue a corrected tax bill that may, as determined by the governing body of the municipality, include a penalty of up to three percent of the education tax on the property. However, if the property incorrectly declared as a homestead is located in a municipality that has a lower homestead tax rate than the nonhomestead tax rate or if an undeclared homestead is located in a municipality that has a lower nonhomestead tax rate than the homestead tax rate, then the governing body of the municipality may include a penalty of up to eight percent of the education tax liability on the property. If the Commissioner determines that the declaration or failure to declare was with fraudulent intent, then the municipality shall assess the taxpayer a penalty in an amount equal to 100 percent of the education tax on the property, plus any interest and late-payment fee or commission that may be due. Any penalty imposed under this section and any additional property tax interest and late-payment fee or commission shall be assessed and collected by the municipality in the same manner as a property tax under chapter 133 of this title. Notwithstanding section 4772 of this title, issuance of a corrected bill issued under this section does not extend the time for payment of the original bill nor relieve the taxpayer of any interest or penalties associated with the original bill. If the corrected bill is less than the original bill and there are also no unpaid current year taxes, interest, or penalties and no past year delinquent taxes or penalties and interest charges, any overpayment shall be reflected on the corrected tax bill and refunded to the taxpayer.

    (h) The filing of a new or corrected declaration or rescission of an erroneous declaration, on or before September 1 of the property tax year, that is not reflected in the first Education Fund payment under 16 V.S.A. § 4028 for that fiscal year or in a municipality’s first payment to the Education Fund under subsection 5402(c) of this title for that fiscal year, shall be reflected in the final net payment to or from the Education Fund for that fiscal year. The municipality may retain 0.225 of one percent of the tax collected. Any reduction in tax paid to a municipality due to a new, revised, or rescinded declaration shall be paid by the municipality to the taxpayer no later than May 15 of the fiscal year. No later than June 1, each municipality shall provide to the State Treasurer a list of taxpayers who filed late or corrected declarations or rescinded declarations, the amount of the change in education tax, and the amount of any interest and penalty billed the taxpayer.

    (i) An owner filing a new or corrected declaration or rescinding an erroneous declaration after October 15 shall not be entitled to a refund resulting from the correct property classification, and any additional property tax and interest that would result from the correct classification shall not be assessed as tax and interest, but shall instead constitute an additional penalty to be assessed and collected in the same manner as penalties under subsection (g) of this section. Any change in property classification under this subsection shall not be entered on the grand list.

    (j) A taxpayer may appeal a determination of domicile for purposes of a homestead declaration or an assessment of fraud penalty under this section to the Commissioner in the same manner as an appeal under chapter 151 of this title. A taxpayer may appeal an assessment of any other penalty under this section to the listers within 14 days after the date of mailing of notice of the penalty, and from the listers to the board of civil authority, and thereafter to the courts, in the same manner as an appraisal appeal under chapter 131 of this title. The legislative body of a municipality shall have authority in cases of hardship to abate all or any portion of a penalty appealable to the listers under this section and any tax, penalty, and interest arising out of a corrected property classification under this section, and shall state in detail in writing the reasons for its grant or denial of the requested abatement. The legislative body may delegate this abatement authority to the board of civil authority or the board of abatement for the municipality. Requests for abatement shall be made to the municipal treasurer or other person designated to collect current taxes, and that person shall forward all requests, with that person’s recommendation, to the body authorized to grant or deny abatement.

    (k) A municipality may retain any penalties and interest assessed and collected in accord with this section.

    (l) “Hardship” under this section means an owner’s inability to pay as certified by the Commissioner of Taxes, in the Commissioner’s discretion, or means an owner filing an incorrect, or failing to file a correct, homestead declaration due to one or more of the following:

    (1) full-time active military duty of the declarant outside the State;

    (2) serious illness or disability of the declarant;

    (3) serious illness, disability, or death of an immediate family member of the declarant; and

    (4) fire, flood, or other disaster. (Added 1997, No. 60, § 45, eff. Jan. 1, 1999; amended 1997, No. 71 (Adj. Sess.), §§ 12, 13, 14, eff. Jan. 1, 1998; 1997, No. 71 (Adj. Sess.), § 76, eff. January 1, 1999; 1999, No. 1, § 60g(b); 1999, No. 49, §§ 31, 53, eff. June 2, 1999; 2003, No. 68, § 6, eff. July 1, 2004; 2003, No. 76 (Adj. Sess.), §§ 2, 20, eff. Feb. 17, 2004; 2003, No. 107 (Adj. Sess.), § 18a; 2005, No. 38, § 6, eff. Jan. 1, 2006; 2005, No. 38, § 17; 2005, No. 185 (Adj. Sess.), § 6, eff. Jan. 1, 2006; 2007, No. 190 (Adj. Sess.), § 12; 2009, No. 1 (Sp. Sess.), § H.24, eff. June 2, 2009; 2009, No. 160 (Adj. Sess.), § 47, eff. June 4, 2010; 2011, No. 45, § 11, eff. May 24, 2011; 2011, No. 143 (Adj. Sess.), § 25, eff. Jan. 1, 2013; 2013, No. 174 (Adj. Sess.), §§ 17, 18; 2021, No. 105 (Adj. Sess.), § 531, eff. July 1, 2022.)

  • § 5411. Rules

    The Commissioner of Taxes and the Director of Property Valuation and Review may each adopt formal or informal rules in order to carry out the provisions of this chapter. (Added 1997, No. 60, § 45, eff. Jan. 1, 1998.)

  • § 5412. Reduction of listed value and recalculation of education tax liability

    (a)(1) If a listed value is reduced as the result of an appeal or court action made pursuant to section 4461 of this title, a municipality may submit a request for the Director of Property Valuation and Review to recalculate its education property tax liability for the education grand list value lost due to a determination, declaratory judgment, or settlement. The Director shall recalculate the municipality’s education property tax liability for each year at issue, in accord with the reduced valuation, provided that:

    (A) The reduction in valuation is the result of an appeal under chapter 131 of this title to the Director of Property Valuation and Review or to a court, with no further appeal available with regard to that valuation, or any judicial decision with no further right of appeal, or a settlement of either an appeal or court action if the Director determines that the settlement value is the fair market value of the parcel.

    (B) The municipality submits the request on or before January 15 for a request involving an appeal or court action resolved within the previous calendar year.

    (C) [Repealed.]

    (D) The Director determines that the municipality’s actions were consistent with best practices published by the Property Valuation and Review in consultation with the Vermont Assessors and Listers Association. The municipality shall have the burden of showing that its actions were consistent with the Director’s best practices.

    (2) A determination of the Director made under subdivision (1) of this subsection may be appealed within 30 days by an aggrieved municipality to the Commissioner for a hearing to be held in accordance with 3 V.S.A. §§ 809-813. The Commissioner’s determination may be further appealed to Superior Court, which shall review the Commissioner’s determination using the record that was before the Commissioner. The Commissioner’s determination may only be overturned for abuse of discretion.

    (3) Upon the Director’s request, a municipality submitting a request under subdivision (1) of this subsection shall include a copy of the agreement, determination, or final order, and any other documentation necessary to show the existence of these conditions.

    (b) To the extent that the municipality has paid that liability, the Director shall allow a credit for any reduction in education tax liability against the next ensuing year’s education tax liability.

    (c) If a listed value is increased as the result of an appeal under chapter 131 of this title or court action, whether adjudicated or settled, and the Director determines that the settlement value is the fair market value of the parcel with no further appeal available with regard to that valuation, the Director shall recalculate the municipality’s education property tax for each year at issue, in accord with the increased valuation, and shall assess the municipality for the additional tax at the same time the Director assesses the municipality’s education tax liability for the next ensuing year, unless the resulting assessment would be less than $300.00. Payment under this section shall be due with the municipality’s education tax liability for the next ensuing year.

    (d) Recalculation of education property tax under this section shall have no effect other than to reimburse or assess a municipality for education property tax changes that result from property revaluation.

    [Subsec. (e) effective until January 1, 2023]

    (e) A reduction made under this section shall be an amount equal to the loss in education grand list value multiplied by the tax rate applicable to the subject property in the year the request is submitted. However, the total amount for all reductions made under this section in one year shall not exceed $100,000.00. If total reductions for a calendar year would exceed this amount, the Director shall instead prorate the reductions proportionally among all municipalities eligible for a reduction so that total reductions equal $100,00.00.

    [Subsec. (e) effective January 1, 2023]

    (e) A reduction made under this section shall be an amount equal to the loss in education grand list value multiplied by the tax rate applicable to the subject property in the year the request is submitted. However, the total amount for all reductions made under this section in one year shall not exceed $1,000,000.00. If total reductions for a calendar year would exceed this amount, the Director shall instead prorate the reductions proportionally among all municipalities eligible for a reduction so that total reductions equal $1,000,000.00.

    (f) Prior to the issuance of a final administrative determination or judicial order, a municipality may request that the Director certify that best practices were followed for purposes of meeting the requirements of subdivision (a)(1)(D) of this section. The Director may choose to grant certification, deny certification, or refrain from a decision until a request is submitted under subdivision (a)(1) of this section. The Director shall consider the potential impact on the Education Fund, the unique character of the subject property or properties, and any extraordinary circumstances when deciding whether to grant certification under this subsection. The Director shall be bound by a decision to grant certification unless the municipality agrees to a settlement after such certification was made. (Added 2001, No. 63, § 279, eff. June 16, 2001; amended 2007, No. 65, § 393, eff. June 4, 2007; 2007, No. 190 (Adj. Sess.), § 13, eff. June 6, 2008; 2017, No. 11, § 60; 2017, No. 73, § 27, eff. June 13, 2017; 2018, No. 8 (Sp. Sess.), § 9, eff. June 28, 2018; 2021, No. 163 (Adj. Sess.), § 2, eff. January 1, 2022.)

  • [Effective July 1, 2023.]

    § 5413. State appraisal and litigation assistance program

    (a) A State appraisal and litigation assistance program shall be created within the Division of Property Valuation and Review of the Department of Taxes to assist municipalities with the valuation of complex commercial or other unique properties within a municipality’s jurisdiction and to assist with any appeals arising from those valuations. The Commissioner of Taxes may contract with one or more commercial appraisers to provide State appraisal and litigation assistance to municipalities under this section. The Commissioner may adopt rules to administer the provisions of this section.

    (b) The Commissioner shall:

    (1) determine the conditions for a property to be eligible for State assistance, including the grand list value or category of the property or other relevant factors as determined by the Commissioner; and

    (2) provide a process by which a municipality may apply for assistance under this section for one or more properties.

    (c) Any municipality assisted under this section shall be considered to have followed best practices pursuant to subdivision 5412(a)(1)(D) of this title. (Added 2021, No. 163 (Adj. Sess.), § 3, eff. July 1, 2023.)