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Bill

S 312

An act relating to a refundable machinery and equipment investment tax credit

2025-2026 Regular Session Introduced by Scott Beck and 1 co-sponsor

Creates a fully refundable Vermont tax credit for purchases of qualifying machinery and equipment to spur business investment and modernization.

Read 1st time & referred to Committee on Finance
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WeVote Research Nonpartisan
Bill Summary · S 312

Summary: S.312 (2025-2026) — An act relating to a refundable machinery and equipment investment tax credit (Vermont)

Purpose and intent

  • Establishes a refundable state tax credit intended to encourage investment in machinery and equipment (M&E) by businesses operating in Vermont.
  • Aims to stimulate economic growth, modernization of equipment, and potential job creation by reducing the after-tax cost of acquiring qualifying M&E.

Key provisions and changes

  • Refundable M&E investment credit: Creates a credit against Vermont taxes that is fully refundable to the taxpayer. This means a business can receive a cash refund from the state if the credit exceeds its tax liability.
  • Eligible investments: Applies to the purchase or specified acquisition of machinery and equipment used in a trade or business within Vermont. The bill defines what constitutes qualifying M&E and may set exclusions (e.g., equipment used for personal use, certain vehicles, or non-qualifying items).
  • Credit amount: Specifies the percentage of the eligible M&E expenditure that can be claimed as a credit. The exact percentage (e.g., a fixed rate or tiered rate based on investment size) would be defined in the bill text.
  • Timing and claiming rules: Outlines when the credit can be claimed (e.g., in the year of purchase or in a carry-forward window if applicable) and any required filing mechanics with the Vermont Department of Taxes.
  • Interaction with other incentives: Addresses coordination with other state or local incentives (e.g., whether the credit can be stacked with other credits or if there are limits to prevent duplication).
  • Caps and limitations: May include maximum annual credit amounts, per-business caps, or limitations for certain sectors or types of equipment.
  • Compliance and reporting: Requires recipients to maintain records of purchases, provide documentation of eligibility, and comply with reporting requirements to the Department of Taxes.
  • Administrative provisions: Delegates administration, enforcement, and rulemaking to the relevant state department or agency (likely the Vermont Department of Taxes) and may authorize rulemaking to define eligible property and calculations.

Who/what would be affected

  • Businesses investing in qualifying machinery and equipment in Vermont would be directly eligible for the refundable credit.
  • Taxpayers (corporations, LLCs, sole proprietors, partnerships, or other entities as defined) with tax liability against Vermont taxes that acquire qualifying M&E.
  • Equipment suppliers and contractors may see increased demand due to the incentive, indirectly affecting the construction, manufacturing, and equipment markets.
  • State tax administration and policymakers, who would implement, monitor, and adjust the program through regulations and annual fiscal notes.

Procedural and timeline aspects

  • Status: Read 1st time and referred to the Senate Committee on Finance (January 27, 2026).
  • Next steps: The Finance Committee would review, amend, and potentially move the bill to a floor vote. If enacted, the program would become effective on a date specified in the bill (often a future effective date or immediate upon enactment) and would include transitional rules if prior purchases occur before or after effective dates.
  • Sunset or durability: The bill may include sunset provisions or require periodic reenactment/reassessment, depending on the fiscal impact and legislative priorities.

Potential impacts and considerations

  • Economic impact: By making the M&E investment credit refundable, the state could see increased capital investment, modernization of equipment, productivity gains, and potential job creation.
  • Fiscal impact: Refundable credits can reduce tax revenue more than nonrefundable credits, depending on uptake. The bill would likely include an estimated cost or cap in its fiscal note.
  • Equity and targeting: The effectiveness may depend on whether the credit is accessible to small businesses as well as larger firms, and whether there are caps or eligibility criteria that ensure broad but targeted use.

Note: The summary reflects typical features of a refundable M&E investment tax credit as described in the bill’s title and available action history. For precise definitions, eligibility criteria, credit rates, limits, and effective dates, the full text of S.312 as introduced and any amendments from committee would be required.

Compiled from official sources — confirm details with the bill’s official record.

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