Senate Finance Committee approves S.127 as amended, removes Wake Robin tax exemption from bill

The Senate Finance Committee voted to approve S.127 as presented in draft 1.1 (03/26) after lengthy debate, leaving a proposed tax exemption for continuing-care facility fees out of the version the committee advanced.

The discussion centered on whether entrance fees and recurring monthly payments at so-called continuum-of-care facilities (Wake Robin was repeatedly cited) can be treated the same as long-term-care insurance for tax purposes. Committee members and legislative staff debated differences between federal treatment under IRS rules and Vermont’s current medical-expense deduction.

Kirby Keaton, Legislative Counsel, summarized Vermont’s position: “in Vermont, the deduction for medical expenses is limited because the entrance fees and recurring monthly payments, can be deducted in Vermont, but there’s a cap on that. You can’t get a deduction for the amount that exceeds the deductibility limits for premiums paid during the taxable year.” Keaton explained that Vermont applies the state standard…