S.45, which would create an elective pass-through entity tax that would help Vermont business owners save on their federal taxes, passed the Senate the week of March 3, 2023, by voice vote. NFIB has consistently supported this pass-through and thanks Senator Thomas Chittenden, D-Chittenden Southeast District, for sponsoring the bill and ushering it through his committee with unanimous support.
SALT was capped as a punitive measure to hurt blue states, such as Vermont, in the 2017 Tax Cuts and Jobs Act. Since then, a continually growing list of other states has enacted an IRS blessed SALT cap workaround to rebuff this partisan, politically charged policy. Vermont would send millions in tax dollars to Washington that these other states wouldn’t, putting Vermont at a competitive disadvantage. The strategy is to draw down as much federal money as possible and not send money to the federal government, keeping it here in Vermont and being put to work to help Vermonters.
The bill now goes to the Vermont House of Representatives, where it may be met with less support than it has had in the Senate.