Senate committee considers exempting military pensions to help recruit veterans to Vermont

During a Senate Economic Development, Housing & General Affairs committee hearing, Department of Labor officials described how exempting military retirement pay from Vermont income tax could make the state more competitive in recruiting veterans and their families.

The department said the proposal would complement earlier state efforts to streamline professional licensing for military spouses and to recognize military credentials, while leveraging federal programs such as the Jobs for Veterans State Grant, SkillBridge and GI Bill benefits.

"I am writing to advocate against taxing retired military pensions. I resided in Upstate New York, and I've always loved Vermont. I would love to retire there, but I cannot when other states offer tax free pensions," Jay Ramsey, director of workforce development, read from an anecdotal submission the department had received. "If Vermont removes the pension tax for active duty military, I would move there. Seems like a win win. Please try to keep pushing for that." He attributed the note to an out‑of‑state writer who said the tax treatment…