Ways & Means reviews H.135 miscellaneous tax bill; committee flags municipal buyout payments and synthetic-nicotine treatment

The House Ways & Means Committee on Monday heard a presentation on H.135, a miscellaneous tax bill that would make a set of tax-code updates and add a new municipal buyout reimbursement program for flood‑impacted properties.

Kirby Keemley, head of council, walked the committee through H.135 and the additional language the committee requested. "This is very far from the last time we are going to look at this bill," Keemley said, describing the measure as a traditional catchall that is often finalized near crossover. He summarized about a dozen substantive changes and several technical cleanups in the measure.

Why it matters: H.135 touches individual filing rules, tax credits, retirement-income exemptions, tobacco‑product taxation, and a program that would reimburse municipalities that acquire or preserve flood‑prone properties. Several provisions could affect municipal budgets, state revenue calculations and tax administration if enacted.

Major provisions

Income-tax link and filing status: The bill would update Vermont’s annual statutory link to the federal tax code and add a requirement that taxpayers who file jointly at the federal level also file jointly at the Vermont level, while allowing the Department of Taxes to grant exceptions.

Child Tax Credit and earned-income credit: H.135 would raise the eligibility age for the Vermont Child Tax Credit from 5 to 6. The bill also relocates existing text about claiming credits without a tax identification number and proposes an expanded Vermont earned income tax credit (EITC) structure: the credit’s rate for filers with children would remain at 38 percent, while the proposal includes an unspecified new maximum rate for filers without children (text in the committee presentation did not state the exact percentage).

Retirement exemptions: The bill contains multiple changes to…