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Federal HR1 corporate provisions to reshape Vermont revenue estimates, fiscal office says
Summary
State fiscal staff told a joint Ways & Means and Senate Finance hearing that corporate provisions in HR1 (R&D timing, interest limitation changes, bonus depreciation, and international tax rules) will shift revenue in the near term—some reducing and some increasing Vermont receipts—while overall estimates remain uncertain and will be revisited after the next revenue forecast.
Patrick Thirkin of the state fiscal office told a joint Ways & Means and Senate Finance hearing that multiple corporate tax changes in the federal HR1 package will alter Vermont’s revenue picture, with some provisions lowering state receipts and others increasing them.
Thirkin said HR1’s return to year‑of‑incurrence treatment for research and development expenses will “front‑load” deductions for corporations and is expected to reduce Vermont revenues by about $2,300,000 in fiscal years 2026 and 2027. “This change in how the timing of when you can deduct these expenses is expected to reduce state revenues,” he said, while noting some of the effect is a timing shift rather than a permanent loss.
At the same time, Thirkin…
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