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Bill

H 844

An act relating to sales tax and a new surcharge paid on fuel by owners of short-term rental and second home properties

2025-2026 Regular Session

Imposes a 3% surcharge on residential fuel sales for short-term rental or owner-occupied <183 days properties, removing exemptions and funding weatherization.

Read first time and referred to the Committee on Ways and Means
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WeVote Research Nonpartisan
Bill Summary · H 844

Overview

H.844 (2025-2026) from Vermont would change how sales tax exemptions on residential fuels are applied and create a new 3% surcharge on certain residential fuel sales. The surcharge funds the Home Weatherization Assistance Fund. The bill targets fuels used in residences and imposes stricter rules for properties that function as short-term rentals or are owned but sparsely occupied.

Main purpose and intent

  • Disallow the current sales and use tax exemption for certain fuels when a residential property has been used as a short-term rental or has been owner-occupied for fewer than 183 days in the past 12 months.
  • Create a 3% surcharge on retail sales of electricity, oil, gas, and other fuels used in a residence that has had occupancy subject to a short-term rental surcharge in the past 12 months or has been occupied by the owner for fewer than 183 days in the past year.
  • Use the resulting revenue to fund the Home Weatherization Assistance Fund.

Key provisions and changes

  • Section 1 (amendment to 32 V.S.A. § 9741(26)):
    • Restates the exemption for residential fuels but adds a condition:
    • A residence is excluded from the exemption if it has been subject to the short-term rental surcharge in the past 12 months or if the owner occupied it for fewer than 183 days in the past year.
    • Clarifies definitions related to “residence” to align with occupancy and short-term rental status.
  • Section 2 (new Subchapter 5, 32 V.S.A. § 9821):
    • Establishes a 3% surcharge on the sales price of electricity, oil, gas, and other fuels sold for residential use, applicable to properties meeting the occupancy/short-term rental criteria described above.
    • Exemption rule: fuels that are exempt from the sales tax remain exempt from the surcharge.
    • The surcharge is to be collected, remitted, and enforced in the same manner as the sales tax.
    • Revenue from the surcharge must be deposited into the Home Weatherization Assistance Fund (per 33 V.S.A. § 2501).
  • Section 3 (amendment to 33 V.S.A. § 2501):
    • Updates the composition of the Home Weatherization Assistance Fund to include:
    • Receipts from the gross receipts tax on retail fuel (existing)
    • Receipts from the new surcharge (Section 9821)
    • Funds from other sources (Oil Overcharge Fund, federal LIHEAP, Vermont Low Income Trust for Electricity, and other appropriations)
  • Section 4:
    • Effective date: August 1, 2026.

Who/what is affected

  • Residential property owners who own and operate homes as short-term rentals or who do not occupy a home for at least 183 days in the past year.
  • Vendors selling electricity, oil, gas, and other fuels for residential use, who would collect the 3% surcharge from qualifying properties.
  • The Vermont Home Weatherization Assistance Fund, which would receive additional funding from the surcharge.
  • Consumers paying for residential fuels and utilities at affected properties (potentially higher one-time or ongoing fuel costs due to the surcharge or denial of exemptions).

Procedural and timeline aspects

  • Introduction and first reading: January 30, 2026; referred to the House Committee on Ways and Means.
  • The bill is scheduled for committee consideration, with noted activity on May 1, 2026.
  • Effective date set for August 1, 2026, if enacted.

Practical impact to watch

  • The change could raise the price of residential fuels for properties that meet the occupancy/short-term rental criteria, by 3% through the new surcharge.
  • The existing sales tax exemption for residential fuels would no longer apply to these properties, potentially increasing after-tax fuel costs.
  • Additional funding for weatherization could expand weatherization programs for eligible households, subject to appropriations and fund administration.

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

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