Vermont H 766: An act relating to a local option tax on gasoline and diesel sales

Bill Text

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H.766 1
Introduced by Representatives Burke of Brattleboro, Lalley of Shelburne, and 2
Tomlinson of Winooski 3
Referred to Committee on 4
Date: 5
Subject: Taxation; local option tax; municipal revenue; gasoline; diesel fuel 6
Statement of purpose of bill as introduced: This bill proposes to create a new 7
local option tax for municipalities to receive revenue from sales of gasoline 8
and diesel fuel. 9
An act relating to a local option tax on gasoline and diesel sales 10
It is hereby enacted by the General Assembly of the State of Vermont: 11
Sec. 1. 24 V.S.A. § 138 is amended to read: 12
§ 138. LOCAL OPTION TAXES 13
(a) Local option taxes are authorized under this section for the purpose of 14
affording municipalities an alternative method of raising municipal revenues. 15
Except as provided in subsection (h) of this section, and subject to certification 16
by the Commissioner of Taxes, a local option tax shall be effective beginning 17
on the next tax quarter following 90 days’ notice to the Department of Taxes of 18
the imposition. 19

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(b) If the legislative body of a municipality by a majority vote 1
recommends, the voters of a municipality may, at an annual or special meeting 2
warned for that purpose, by a majority vote of those present and voting, assess 3
any or all of the following: 4
(1) a one percent sales tax; 5
(2) a one percent meals and alcoholic beverages tax; 6
(3) a one percent rooms tax; 7
(4) a $0.01 tax upon each gallon of gasoline motor fuel sold or delivered 8
by a distributor; 9
(5) a $0.01 tax upon each gallon of diesel fuel sold or delivered by a 10
distributor. 11
(c)(1) Any tax Taxes imposed under the authority subdivisions (b)(1)–(3) 12
of this section shall be collected and administered by the Department of Taxes, 13
in accordance with State law governing such State tax or taxes and subdivision 14
(2) of this subsection; provided, however, that a sales tax imposed under this 15
section shall be collected on each sale that is subject to the Vermont sales tax 16
using a destination basis for taxation. Taxes imposed under subdivisions (b)(4) 17
and (5) of this section shall be collected and administered by the Department of 18
Motor Vehicles in accordance with State law governing such tax. Except with 19
respect to taxes collected on the sale of aviation jet fuel, a per-return fee of 20
$5.96 shall be assessed, 75 percent of which shall be borne by the 21

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municipality, and 25 percent of which shall be borne by the State to be paid 1
from the PILOT Special Fund. Notwithstanding 32 V.S.A. § 603 or any other 2
provision of law or municipal charter to the contrary, revenue from the fee 3
shall be used to compensate the Department Departments for the costs of 4
administering and collecting the local option tax and of administering the State 5
appraisal and litigation program established in 32 V.S.A. § 5413. The fee shall 6
be subject to the provisions of 32 V.S.A. § 605. 7
(2) Notwithstanding any other law or municipal charter to the contrary, 8
if the applicable Commissioner determines that local option tax was collected 9
on a transaction in a municipality not authorized to impose local option tax 10
under this section, the Commissioner shall either refund the erroneously 11
collected tax pursuant to 27 V.S.A. chapter 27 or 28, or 32 V.S.A. chapter 233 12
or 225 or, if the purchaser cannot reasonably be determined, deposit the 13
erroneously collected tax as required for State diesel fuel and gasoline taxes 14
pursuant to 19 V.S.A. § 11(2); State sales and use tax pursuant to 16 V.S.A. 15
§ 4025(a)(6); or State meals and rooms tax pursuant to 10 V.S.A. § 1388(a)(4), 16
16 V.S.A. § 4025(a)(4), and 32 V.S.A. § 435(b)(7). 17
(d)(1) Except as provided in subsection (c) of this section and subdivision 18
(2) of this subsection with respect to taxes collected on the sale of aviation jet 19
fuel, of the taxes collected under this section, 75 percent of the taxes shall be 20
paid on a quarterly basis to the municipality in which they were collected, after 21

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reduction for the costs of administration and collection under subsection (c) of 1
this section. Revenues received by a municipality may be expended for 2
municipal services only, and not for education expenditures. Any remaining 3
revenue shall be deposited into the PILOT Special Fund established by 32 4
V.S.A. § 3709. 5
(2)(A) Of the taxes collected under this section on the sale of aviation jet 6
fuel, on a quarterly basis, 70 percent of the taxes shall be paid to the 7
municipality in which they were collected, and 30 percent shall be deposited in 8
the Transportation Fund. 9
(B) All revenues referenced in subdivision (A) of this subdivision (2) 10
shall be used exclusively for aviation p