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Bill

H 76

An act relating to an income tax exemption for National Guard active duty subsistence and quarters allowance

2025-2026 Regular Session Introduced by Ashley Bartley and 23 co-sponsors

Vermont would exempt from state income tax the portion of National Guard active-duty subsistence and quarters allowances.

Read first time and referred to the Committee on Ways and Means
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WeVote Research Nonpartisan
Bill Summary · H 76

Summary of Bill H.76 (2025-2026) – Vermont

Purpose and Intent

  • The bill seeks to provide an income tax exemption for National Guard members on active duty who receive subsistence and quarters allowances.
  • The core aim is to reduce the tax burden on service members while they are deployed or on active-duty status, aligning Vermont tax policy with the financial needs and incentives for National Guard personnel.

Key Provisions and Changes

  • Income Tax Exemption: Establishes an exemption from Vermont state income tax for the portion of a National Guard member’s active-duty subsistence and quarters allowances.
    • Subsistence allowance: A daily or periodic payment intended to cover meals and living expenses while on active duty.
    • Quarters allowance: A housing stipend provided to cover lodging and related living costs during active duty.
  • Scope: Applies specifically to National Guard active-duty recipients of these allowances. It does not introduce a general exemption for all military pay or for other forms of compensation.
  • Tax Credit/Exemption Language (implied): The bill would likely define the eligible amount and ensure it is excluded from gross income for Vermont personal income tax purposes, in line with federal treatment or in a manner consistent with existing exemptions for military pay, subject to Vermont’s statutory framework.
  • Administration and Conformity: The provision would be administered by the Vermont Department of Taxes, with conformity to applicable federal definitions of subsistence and quarters allowances as needed, and consistent with Vermont tax filing requirements.

Affected Parties and Impacts

  • Primary Beneficiaries: Vermont National Guard members who are on active duty and receive subsistence and quarters allowances.
  • Broader Fiscal Impact:
    • Reduced state income tax revenue for individuals who qualify.
    • Potentially lower administrative burden for affected service members (simplified filing if the exemption is straightforward to apply).
  • Budgetary Considerations: The exemption has potential cost implications for the state General Fund, depending on the number of qualifying service members and the size of allowances. The legislative action would likely be accompanied by fiscal notes estimating revenue impact.

Procedural and Timeline Aspects

  • Action History: Read first time and referred to the Committee on Ways and Means on January 23, 2025.
  • Next Steps in Process:
    • The Ways and Means Committee would review, possibly amend, and vote on the bill.
    • If approved, the bill would move to the full House for debate and a vote, followed by potential consideration by the Senate and a conference if needed.
    • If enacted, the effective date would be specified in the bill (e.g., a future tax year) and would require administrative guidance from the Department of Taxes for implementation.

Sponsor and Support

  • Co-sponsors: A broad slate of legislators including Woody Page, Wayne Laroche, Mike Southworth, James Gregoire, Gina Galfetti, Chris Keyser, Leland Morgan, Ashley Bartley, Mark Higley, Mike Tagliavia, Kenneth Goslant, V.L. Coffin, Penny Demar, Rob North, Sandy Pinsonault, Dan Noyes, Lisa Hango, Topper McFaun, Carolyn Branagan, John Kascenska, Bob Hooper, Kevin Christie, Matt Birong, and Mike Morgan.
  • The wide sponsorship suggests broad legislative interest or consensus on supporting National Guard members’ tax treatment.

What to Watch

  • The specific exemption amount or percentage (if any) and the exact definition of eligibility (e.g., active-duty status, residency requirements) will be detailed in the bill’s text.
  • Fiscal notes will clarify anticipated revenue impact and any potential mitigation if the exemption is expected to be costly.
  • Any interaction with other Vermont exemptions or credits for military pay and how the exemption interacts with federal military benefits.

If you’d like, I can tailor this summary to focus on readers with or without a policy background, or add hypothetical examples illustrating how the exemption would affect a service member’s tax filing.

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

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