Vermont tax division outlines how 'current use' program reduces property taxes and manages land-change penalties

Jill Remick, director of the Property Valuation and Review division at the Vermont Department of Taxes, told a legislative committee that the statewide "current use" program is a property-tax benefit intended to preserve working agricultural and forest land while changing how those parcels are taxed.

Remick said the division "do[es] basically everything working directly with municipalities related to the statewide education property tax," including processing enrollments, transfers and mapping, administering the contingent lien placed on enrolled parcels, and calculating the land use change tax when land is removed from the program.

The program, Remick said, covers roughly 19,600 enrolled parcels (about 16,000 unique owners) and accounts for about one-third of Vermont’s land cover. Enrollment is weighted toward forest land; agricultural parcels are often smaller. Remick told the committee that the department processed nearly 1,800 current-use applications in the past year, of which 277 were new enrollments and the rest were transfers or other changes. "A lot of it is about maintaining maps and making sure we have accurate mapping," she said.

Why it matters: the program lowers property-tax bills for enrolled owners but creates a contingent lien and a potential penalty if land is removed. Remick said the state calculates foregone education tax revenue at about $55 million and total foregone revenue at about $76 million; the municipal share funded from the general fund is roughly $20 million. Remick described the land use change tax as a penalty equal to 10% of the fair-market value set by the local lister when a parcel is fully removed for development or when a portion is carved off and valued as a standalone parcel.

How enrollment and eligibility work

Remick said Forests, Parks and Recreation (FPR) performs the detailed review for forest enrollments — including forest management plans and activity reports — and that consulting foresters and county foresters are key intermediaries. For agriculture-only parcels, owners must submit an annual agriculture certification. The Current Use Advisory Board, she said, sets annual use values (one for agriculture, two for forest categories) and issues administrative rules to clarify statutory requirements.

Owners who enroll receive a reduced tax assessment based on per-acre or per-parcel "use values" set annually; those values are calculated from data supplied by FPR for forest land and by the Agency of Agriculture for agricultural land. Remick said use values are smoothed over time to avoid large year-to-year swings.

Lien, penalty and distributions

When a parcel is approved for current use, the department places a contingent lien on the enrolled acreage and eligible buildings. Remick explained that the lien “doesn't become an active lien until it's developed or the land use change tax is not paid,” a change made years ago to address mortgage-lender concerns. If land is developed or removed, the land use change tax is 10% of fair-market value (if a portion, that portion is valued as a standalone parcel). Municipalities receive 50% of the land use change tax up to $2,000 per event; the remainder is remitted to state funds and split between the education fund and the general fund (Remick described the split as approximately 75/25).

Remick added that the calculated land use change tax amount does not reset to current market levels if the property later appreciates: "If the land was worth $10,000 an acre for development when they bought it ... the penalty is still on the 10." If the tax goes unpaid after development, penalty and interest accrue.

Practical hurdles and common questions

Remick told lawmakers the department still relies heavily on paper maps and manual review; FPR is building a digital mapping system that the tax division expects to use. The department uses property-transfer tax returns to prompt new owners to reaffirm whether they intend to remain in current use, and staff send letters and certified mail when owners do not respond.

Common questions from lawmakers included whether town forests are eligible (Remick: town-owned property within a town is tax-exempt so typically not enrolled), how conservation easements affect eligibility (Remick: parcels sold to land trusts or placed under easement frequently remain eligible), and whether emerging categories such as carbon markets or cannabis cultivation are captured (Remick: conservation easements are tracked but carbon-market transactions are not specifically tracked; cannabis cultivation can qualify as agriculture under statute, with indoor cultivation treated differently than outdoor operations).

Remick also described who is responsible for program administration and enforcement: the tax division handles lien and tax calculations and enrollment processing; FPR handles forest-plan review and inspections for compliance with forest-management plans; listers and assessors value enrolled land and any portions removed for land use change tax calculations.

Committee members asked how the land use change tax affects municipal budgets and whether the department provides counseling to owners considering enrollment. Remick said the department can explain eligibility, administrative rules and the tax consequences and provides a web-based calculator to estimate potential savings; the division does not provide tax advice or recommend practitioners. She also noted the department has limited compliance-audit capability and relies in part on FPR inspections and imagery tools to identify potential noncompliance.

Nut graf: the committee session laid out how Vermont’s current use program balances incentives to preserve working lands with mechanisms that discourage subdivision and development through a lien and a 10% land use change tax. Lawmakers pressed the division on enrollment limits, how penalties are calculated and how program administration intersects with forest and agricultural oversight.

Ending: Remick said she would return with additional materials and invited follow-up questions and suggested the committee also hear from the Agency of Agriculture and FPR for technical details on forest management and agricultural eligibility.