Lawmakers prepare to head or home: income tax reform to wait until next year

by Robert Maynard

Vermonters have dodged a major bullet for now.  As reported here:

an item buried in the Senate Tax bill (H.528) that would put individual tax returns in the hands of legislative staff. Currently,the JFO can view tax data at the Tax Department but not have individual returns. A good way to drive high income tax payers from Vermont and a way to involve the legislature in instigating enforcement actions with regard to individual tax payers.

The purpose of the bill was stated as such: “This bill proposes to make changes to Vermont’s income tax, sales and use tax, meals and rooms tax, cigarette taxes, property tax, fuel gross receipts tax, and provider taxes.”

Fortunately for us, the Vermont legislature appears ready to adjourn without addressing this issue:

With an agreement to postpone action on a plan to reform income tax deductions and rates, and a deal on next year’s budget, the Legislature cleared the two biggest hurdles standing in the way of adjourning Tuesday.

Plenty of bills still require final action, such as an early education bill and a measure that would raise some government fees. But having settled the major money issues and having exhaustively debated and voted on the most controversial policy question of the session — the end-of-life bill — legislative leaders seemed willing to abandon some unfinished bills until next year if necessary in order to slam the gavel down on the 2013 session.

The addition put in the Senate version is one that we Vermonters will have to keep an eye out for when it comes up for discussion again next year.  There are some other matters that will have to wait for next year as well, but this is one that should be particularly worrisome due to privacy concerns.  For a more in depth analysis of some of the concerns that the Senate addition raises, see Bill Sayre’s commentary.