Update on the 1% tax repeal analysis

In response to my analysis in the prior post regarding the impact of the potential repeal of the 1% sales and use tax, Seth Webb, Killington town manager responded with the following commentary and analysis to put a finer point on it. Thanks Seth!

Vito –

Working to create a model to understand the possible impact to residents.  It looks like Propane/Oil & Electric are exempt (wanted you to know before too much info gets out there).   See DRAFT chart below and other notes on this (below the chart).  Trying to get some reasonable estimates assembled to help the model.  Let me know your thoughts on these:

Est. Impacts of the Repeal of the Sales and Use portion of the Options Tax to Residents
(based local residents and citizen testimony)
Expenses	Total Annual Cost	Annual 1% Cost	Notes
Cable	1,200.00	12.00
Land Line Phone	700.00	7.00
Cell Phones	720.00	7.20
Other retail (est)	2,200.00	22.00	supplies, hardware, outdoor equip, ski txts, etc.
Propane / Heating Oil	2,000.00	EXEMPT	Consumers don't pay 1% on fuel oil or propane for heating or on electricity, but Commercial entities do *
Electric	1,800.00	EXEMPT
Total	8,620.00	48.20
* Electric/Heating info: "There are 46 exemptions from the tax (sales and use) which include medical items, food, manufacturing machinery, equipment and fuel, residential fuel and electricity, clothing and shoes." (http://www.state.vt.us/tax/majorvttaxessalesanduse.shtml

Other Notes

Consumers don't pay 1% on fuel oil or propane for heating or on electricity.  Only Commercial.  It also doesn't appear that we pay sales tax on Internet Data from Cable/Telephone or Cell phone.  We pay 1% on the rest of the phone or cable service but not on the Internet access portion.

The info on Electric and Heating is here:

http://www.state.vt.us/tax/majorvttaxessalesanduse.shtml

"There are 46 exemptions from the tax (sales and use) which include medical items, food, manufacturing machinery, equipment and fuel, residential fuel and electricity, clothing and shoes."

and in this bulletin:

http://www.state.vt.us/tax/pdf.word.excel/legal/tb/TB37.rev03062009.pdf

Under General Rules, second paragraph has "Utility sales subject to state sales tax (electricity used commercially, cable TV and telecommunications, for example) are subject to Local Options Sales Tax...."

Seth Webb

Town Manager

Town of Killington

2706 River Road

Killington, VT 05751

sethwebb@town.killington.vt.us

802.422.3241 (office)