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Senate Finance removes farm-income tax deduction from H.484 and validates administrative rule
Summary
Senate Finance amended H.484 to strike a provision providing Vermont income tax deductions for certain farm partner income and capital gains, and instead validated an administrative rule enabling its continued application; the committee set effective dates for parts of the bill and recorded the vote as 4-0-3.
Senate Finance on May 23, 2025 amended H.484 to remove a statutory tax deduction provision for certain partner income and net capital gains from farm sales and to validate an administrative rule that allows a Department rule to remain in effect even though it had not completed formal publication.
Michael Graves, speaking to the committee, said the amendment strikes the section that would have provided Vermont income tax deductions for certain partner income and net capital gains from the sale of farms. In place of that statutory deduction, the amendment validates the Department’s administrative rule (referred to in the transcript as the "heavy cut rule") so that the rule can remain in force even though it had not been filed with the secretary of state or published in the code of rules. Graves summarized the effective dates in the amendment, saying most provisions would take effect July 1, 2025, while the use-value appraisal portion related to contaminated crops would take effect Jan. 1, 2026.
Senator Chittenden moved to adopt Draft 2.1 of the committee amendment to H.484; the committee recorded approval summarized in the transcript as 4-0-3. Committee members discussed procedural questions and agreed to report the amendment; a committee member noted the item would likely be taken up the following week.
The amendment removes the proposed tax-deduction language from statute and instead preserves the department rule’s validity through the amendment’s validation language. The transcript records the committee’s action and the effective-date language included in the amendment text presented to members.
