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Senate Finance reviews S.282 to adapt federal investment surtax into Vermont 'wealth proceeds' levy
Summary
Senate Finance members on Feb. 5 walked through S.282, a proposal to adapt the federal Net Investment Income Tax into a 4% Vermont surtax on certain realized investment income. Staff cautioned about apportionment, interactions with Vermont’s 40% capital‑gains exclusion, and uncertainty in behavioral responses and revenue estimates.
The Senate Finance Committee on Feb. 5 conducted a detailed walkthrough of S.282, a bill that would impose a state surtax on certain investment income modeled on the federal Net Investment Income Tax (NIIT).
The bill’s initial presentation described a "wealth proceeds" tax as a 4% surtax applied to the lesser of a NIIT-style investment-income base or the amount by which modified adjusted gross income exceeds statutory thresholds. "This is a tax on certain types of income that is in addition to income tax," said Kirby Keehan of the presenting office, explaining the proposal adapts the federal NIIT rather than taxing asset values or unrealized gains.
Why it matters: committee staff and members highlighted several practical and policy issues—how Vermont would apportion out‑of‑state income,…
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