A sales tax skirmish between Vermonters First and the Vermont Democratic Party continued Tuesday. A flurry of press releases followed a new ad from super PAC Vermonters First, which warns voters that Democrats support a sales tax on services. The question at hand is not whether this tax measure makes sense for Vermont — it’s whether or not the Democrats support.
Jake Perkinson, chair of the Vermont Democratic Party, in a statement called the ad “deliberately misleading,” asserting, “Vermont Democratic Leadership never put forward a bill to expand taxes this way.”
Vermonters First Treasurer Tayt Brooks rebutted with a “fact-check” on Perkinson’s remark. Brooks pointed to H.243, a bill introduced by the House Ways and Means Committee in 2011, as evidence of Democratic support for the initiative. The bill proposes to “implement the commission’s recommendation to extend the sales tax to services provided at the retail level,” and, argued Brooks, since the committee was “Democratic-controlled,” Democrats are de facto in favor.
Perkinson protested this logic in another press release that accused Brooks of “playing cat and mouse with the truth.”
“H.243 was introduced by the bipartisan committee purely to discuss the Commission’s findings. Our Democratic leaders recognize that it’s important to review our tax system in Vermont. By no means did they commit to expanding taxes to include services. In fact, the bill was held in Committee for that very reason,” countered Perkinson.
Speaker of the House Shap Smith, whose comment about introducing a tax on services sparked Vermonters First’s concern, said he doesn’t anticipate any law to reach fruition in the near future.
“I don’t expect it’s going to be at the forefront of the legislative agenda, but I don’t think it’s something we should be afraid to talk about it”
The Blue Ribbon Tax Study Commission, whose proposal is cited in H.243, did recently resume a study of the state’s sales tax options. The impetus for the study is that Vermont’s goods-based economy is in steady decline, which reduces the sales tax base, whereas the service economy is undergoing an expansion. The commission’s original proposal recommended cutting the sales tax from 6 cents to 4.5 cents and applying this lower rate to consumer-purchased services with limited exceptions for health and education services and transactions between businesses.
