Vermont Senate GOP disapproves of House's vote on military retirement taxation

Vermont Business Magazine The Vermont Senate Republican Caucus released a statement Monday night objecting to a House action that did not fully eliminate the tax on military retirement income. Governor Scott and Lieutenant Governor Gray also penned a co-bylined piece Monday urging the Legislature fully eliminate the tax. They said that fully eliminating this tax is not only about honoring our veterans for their service and sacrifice, but also about growing our workforce and increasing diversity in our state.

The GOP Senate Caucus issued the following statement concerning the House's action on S.53 as amended:

"Vermont Senate Republicans are extremely disappointed that the House of Representatives has failed to fully repeal the tax on military retirement income," said Senate Minority Leader Randy Brock (R-Franklin).

"Instead, House lawmakers chose to add a provision that would exempt just $10,000 in military retirement pay from state income taxes. This is an astonishingly low amount, especially after Senate and House Republicans--as well as Governor Scott--have worked for years to push for a full repeal. While we are glad our House Republican colleagues supported a larger exemption, it is disheartening to hear that the overwhelming majority of House Democrats disagreed."

"Currently, Vermont is only one of three states that fully tax military retirement income1," added Senate Assistant Minority Leader Brian Collamore (R-Rutland). "The House's amendment to exempt just $10,000 from state taxation would still leave Vermont with the broadest tax on military retirement income in New England, and one of the weakest exemptions in the nation. As we continue to work on economic relief measures and other efforts to make our state more affordable, this decision on the part of House Democrats sends a poor signal to existing military retirees in Vermont, as well as to those who might have otherwise considered Vermont for their retirement."

“Vermont faces a crisis in finding and retaining workers,” said Brock. “Military retirees frequently have the critical skills that our workforce desperately needs. They and their spouses pay income, consumption and property taxes that far outweigh this modest benefit. Moreover, honoring their service is the right thing to do,” he added.

"Notably, the underlying bill actually raises significant taxes and fees on Vermonters, including through the imposition of a new 'cloud tax' as well as a $6 million increase in mutual fund fees," noted Brock. "In light of these proposed tax and fee increases in S.53, it is even more discouraging to see such a weak posture towards greater relief for military retirees. It is our hope that our colleagues in the Senate will work with us to remove the harmful aspects of this legislation, while adding in the full repeal of the tax on military retirement pay."

1The three states that fully tax military retirement income are Vermont, California and Virginia, in addition to the District of Columbia. Effective January 1, 2021, Utah fully exempted military retirement income from taxation.

Source: Montpelier, VT--The Vermont Senate Republican Caucus 4.19.2021