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Committee explores decoupling from federal business breaks (QSBS, bonus expensing) to protect state revenues
Summary
Witnesses warned that several federal business tax changes — notably the qualified small business stock exclusion and expanded bonus depreciation — could produce large state revenue losses and little in-state benefit; Davis urged Vermont to evaluate selective decoupling and cited other states' responses.
Carl Davis told lawmakers that certain federal business tax provisions merit serious consideration for state decoupling because the fiscal costs are large while in-state economic benefits are uncertain.
Davis described the qualified small business stock (QSBS) exclusion as "a thing that has snuck up" and said Treasury research shows it may be consuming about 2% of federal capital gains revenue. He noted…
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