House Ways and Means hears testimony on H.43 to exempt military retirement and survivor pay from Vermont income tax

Representative Morgan told the House Ways and Means Committee on Jan. 31 that he had introduced H.43 “an act relating to exempting military retirement and survivor benefit income from Vermont income tax.”

The bill would exempt military retirement pensions and survivor benefits from state income tax. Proponents told the committee they view the measure as a tool to retain and attract military retirees and their families to Vermont; the Joint Fiscal Office estimated the exemption would reduce state revenue by about $3,900,000 annually.

Why it matters: The committee heard that the group directly affected is small relative to all veterans but concentrated in age bands employers need. Pat Tidderton of the Joint Fiscal Office told lawmakers that about 3,900 military retirees live in Vermont (and that Department of Defense data for 2022 showed roughly 2,921 retirees and about 3,600 receiving benefits), and that those retirees received roughly $91 million in benefits in 2022 — about $25,000 per retiree on average, below the national average.…