§ 312. Tax expenditure report

(a) As used in this section, “tax expenditure” shall mean the actual or estimated loss in tax revenue resulting from any exemption, exclusion, deduction, credit, preferential rate, or deferral of liability applicable to the tax. Tax expenditures shall not include the following:

(1) revenue outside the taxing power of the State;

(2) provisions outside the normal structure of a particular tax;

(3) revenue forgone as unduly burdensome to administer; and

(4) revenue forgone for the purpose of avoiding government taxing itself.

(b) Biennially, as part of the budget process, beginning on January 15, 2009, the Department of Taxes and the Joint Fiscal Office shall file with the House Committees on Ways and Means and on Appropriations and the Senate Committees on Finance and on Appropriations a report on tax expenditures in the personal and corporate income taxes, sales and use tax, meals and rooms tax, insurance premium tax, bank franchise tax, education property tax, diesel fuel tax, gasoline tax, and motor vehicle purchase and use tax. The Office of Legislative Counsel shall also be available to assist with this tax expenditure report. The provisions of 2 V.S.A. § 20(d) (expiration of required reports) shall not apply to the report to be made under this subsection. The report shall include, for each tax expenditure, the following information:

(1) a description of the tax expenditure;

(2) the most recent fiscal information available on the direct cost of the tax expenditure in the past two years;

(3) the date of enactment of the expenditure;

(4) a description of and estimate of the number of taxpayers directly benefiting from the expenditure provision;

(5) a description of the statutory purpose explaining the policy goal behind the expenditure as required by subsection (d) of this section and 2013 Acts and Resolves No. 73, Sec. 5; and

(6) a compilation of the items excluded under subsection (a) of this section.

(c) [Repealed.]

(d) Every tax expenditure, as defined in subsection (a) of this section, in the tax expenditure report required by this section shall be accompanied in statute by a statutory purpose explaining the policy goal behind the exemption, exclusion, deduction, or credit applicable to the tax. The statutory purpose shall appear as a separate subsection or subdivision in statute and shall bear the title “Statutory Purpose.” Notwithstanding any other provision of law, a tax expenditure listed in the tax expenditure report that lacks a statutory purpose in statute shall not be implemented or enforced until a statutory purpose is provided. The Department of Taxes shall notify the General Assembly when it has determined that a tax expenditure listed in the tax expenditure report lacks a statutory purpose, and the Department shall specify a date, not later than one year after its determination, that it will cease implementation or enforcement of the tax expenditure. (Added 2005, No. 75, § 26; amended 2005, No. 207 (Adj. Sess.), § 23, eff. May 31, 2006; 2007, No. 190 (Adj. Sess.), § 24, eff. June 6, 2008; 2009, No. 160 (Adj. Sess.), § 1, eff. June 4, 2010; 2011, No. 45, § 36k, eff. May 24, 2011; 2013, No. 73, § 4, eff. July 1, 2014; 2013, No. 142 (Adj. Sess.), § 59; 2013, No. 200 (Adj. Sess.), § 21; 2017, No. 74, § 132; 2019, No. 14, § 73, eff. April 30, 2019; 2019, No. 131 (Adj. Sess.), § 292; 2021, No. 105 (Adj. Sess.), § 446, eff. July 1, 2022.)