Tax commissioner asks for 1‑year delay on telecom tax transition, outlines childcare payroll administration and renter‑credit changes

Tax Commissioner Craig Bolio appeared before the Senate Appropriations Committee Tuesday to discuss Budget Adjustment Act language affecting the tax department and to answer senators’ questions about several standing programs and recent reforms.

Bolio asked the committee to approve a one‑year effective‑date delay for parts of Act 145 — the telecommunications reform enacted last year — so local assessors and the department can complete a transition plan for valuing telecommunications property. “We just got the bids back, and we realized we need more time,” Bolio said, explaining that local valuation and appeals work require additional preparation before the assets are placed on grand lists and taxed under the updated definitions.

Bolio told senators that the department expects to let the affected companies continue to pay the old telephone personal property tax and related in‑lieu taxes for one additional year while the state contracts with valuation experts and coordinates with local assessors. He said the provision is in the Budget Adjustment Act because, without it, the law would take effect and require new grand‑list valuations before the department and towns are ready.

On department operations, Bolio described a set of year‑end reversions being returned to the general fund. He explained the tax department had an unusually large surplus last year because (1) a change in the payment schedule for its Fast Enterprises tax‑computer contract shifted costs across fiscal years and (2) the department added more staff to stand up the childcare contribution payroll tax and therefore had higher vacancy savings while recruiting. The commissioner said the department received 15 positions for childcare tax administration; because the positions were fully funded in the first year but not all were immediately filled, the department is reverting roughly $360,000 (vacancy savings) from those appropriations.

Bolio also said the department originally received a one‑time IT appropriation (he cited a prior $1.5–$2 million estimate) to stand up the childcare payroll tax, but because the payroll contribution could be integrated into the existing wage withholding return the department required substantially less IT work than projected. “That’s a big win for taxpayers,” he said, and the department will return unused IT funding.

On the renter‑credit program (previously called the renter rebate), Bolio described the program changes enacted in recent years and their effect on spending and filings. The program had historically been appropriated at $9.5 million; reforms simplified filing, removed some administrative obstacles (for example, applicants no longer must rent all 12 months to qualify) and indexed limits to HUD area‑median income. He said the legislature approved a 30% increase to income limits last year and the department expects the program to serve more households and — over time — reduce the annual reversion of unused appropriation dollars.

Bolio also addressed an appropriation that assists towns with complex reappraisals (originally started for hydro dams and later expanded to large commercial property). He said about $35,000 reverted this year from that line and that the appropriation fluctuates depending on litigation and reappraisal schedules.

Committee members asked about using landlord‑certificate data as a de facto rental registry; Bolio cautioned that the tax department’s landlord‑certificate process exists for tax administration and that expanding its scope into a broader registry would require new resources and could harm tax compliance if it imposed additional burdens on landlords.

On a policy question from senators, Bolio noted that some federal changes to 529/education plan rollovers (including conversions to Roth IRAs in certain circumstances) have not been mirrored in state law; as a result, some conversions remain ineligible for Vermont’s 529 tax credit treatment until the legislature acts.

Ending: Bolio offered to provide follow‑up materials (for example, details on childcare special fund accounting and program‑level projections) and said department staff will continue to answer legislators’ technical questions as the Budget Adjustment Act language moves forward.