Bill > H0766

This bill allows municipalities in Vermont to impose a new local option tax, which is a tax that local governments can choose to implement to generate additional revenue. Specifically, this bill adds provisions to existing law that would permit municipalities to levy a tax of $0.01 on each gallon of gasoline motor fuel and diesel fuel sold or delivered by a distributor. A "distributor" is defined as someone who sells or delivers fuel, and "diesel fuel" and "gasoline motor fuel" have specific definitions provided within the bill, with gasoline motor fuel excluding aviation gasoline. These new fuel taxes would be collected and administered by the Department of Motor Vehicles, unlike other local option taxes which are handled by the Department of Taxes. The bill also specifies that 75 percent of the revenue collected from these fuel taxes would be paid to the municipality where it was collected, after administrative costs are deducted, and this revenue can only be used for municipal services, not education. The bill also includes a provision that the Commissioner of Taxes, who oversees tax administration, must consult with the Commissioner of Motor Vehicles before limiting the number of municipalities that can enact these new fuel taxes, and sets an effective date of January 1, 2027.

Transportation and Infrastructure

https://legislature.vermont.gov/bill/status/2026/H.766