by Lindsay Smith
Lieutenant Governor Phil Scott, along with Democratic Senate President Pro Tem John Campbell and Senators from both parties came together to present a bill that would offer a tax break to those who suffered during tropical storm Irene and boost local business. The bill would create a tax holiday for homeowners wishing to weatherize their homes, and those who lost their homes to purchase new ones.
Scott described the bill as “a tax holiday… on the date of the anniversary of tropical storm Irene. We will also have a sales tax free holiday on weatherization products for that week as well. There will also be a reimbursement for any of those who have bought mobile homes since Irene, due to Irene.”
Along with the legislators were Jordan Winters of Ace Hardware and Jim Fecteau of Fecteau Homes, who came to support the legislation. The two businessmen shared their experiences with homeowners who suffered as a result of the storm, and extolled the benefits that tax holidays have on the local economy.
Winters addressed the importance of weatherization and the benefit of a tax holiday:
“Tax sales holidays have been very popular with all our customers. Over the years they have gained in popularity. And I think there’s no better way then how that supports our local businesses. I think coupling with this weatherization week is an excellent idea.”
Senator Campbell talked about doing right by the business that donated services for recovery efforts. Some businesses donated without asking for monetary gain. This tax break would allow them to bring back customers they know are struggling. “A lot of merchants here and around the state. Take a look at what they did. They opened their doors. Take a look at Cassella down in Rutland. Here’s a guy who made dumpsters available… and asked no remediation at all for that.”
Lieutenant Governor Scott talked about the benefit of a sales tax break on local business. Tax vacations, even if just for one week, tend to increase sales for about three months around the vacation. Offering discounts, he noted, will entice New Yorkers to come over the border, dine at local restaurants, and shop at other local stores.
However, the question of cost will have to be addressed in relation to this bill. The benefit to the communities would be great, but must come at a sustainable price. The actual dollar amount was calculated by the JFO at approximately 1.5 million, as Senator Campbell noted. However, it is also necessary to factor in other consumer spending that will benefit the state, a number that is hard to calculate.
Scott addressed the challenges in determining economic benefit to a numerical figure. “It is a very difficult number to measure. What it doesn’t take into account is those we were buying outside the borders, online, or not buying at all. So it’s a difficult number to establish.”
Scott is asking for a “creative funding” plan similar to the recent Vermont Strong license plate. The Lieutenant Governor noted the importance of a responsible way of funding the project and recognized that a plan is not yet developed.
Senator Richard Mazza (D-Colchester) addressed the success of past tax holidays:
“The economy is recovering slowly. What an opportunity to get out there and get people encouraged to buy again. 6% or 7% but it makes a huge difference. The last time we had it there was just an outpouring of success around the state.“
Don Mayer, Owner and CEO of Small Dog Electronics recounted his experience with tax holidays:
“We’ve tracked our sales from sales tax holidays.. we found a 30 to 40% increase in overall sales in the three month period surrounding the sales tax holiday.” This new business” comes from people who would normally go to online sources… or go over to neighboring New Hampshire to save a couple hundred dollars on taxes on a computer system.“
He also added the effect on surrounding businesses. “Our neighboring restaurants seem to do a bang up business on tax holidays.”
Governor Peter Shumlin issued a statement on the bill:
“I have a long history of opposing the sales tax in Vermont, leading the effort to remove the tax from clothes and shoes. We need to balance our desire to reduce the sales tax with our need to balance the budget, so one critical issue is how the state will pay for this $1.5 million package. But I like the idea and look forward to learning more about this proposal.”