Stop Pet Tax

As a member of this community, we have been working for the past 2 years behind the scenes with the Vermont Veterinary Association (VVMA) to stop numerous efforts by the Vermont Tax Department from trying to add a "Pet Tax" to our animal specific equipment and ALL YOUR invoices.

Since the State was animate about moving forward May 1 this year, despite all our concerns, the VVMA was able to get a bill introduced to try to protect us all from the Tax Department thanks to Senators Sears and Campion (Bennington) and House Rep. Conquest (Orange-Caledonia).

As of March 20th, our State House Means and Ways Committee denied the bill passage to protect the public from this tax. It is now moving on to the Senate Finance Committee. We need you to reach out to your local legislators to let them know that they need to support *Senate Bill S.130 (or House Bill 536)*. Remember that lawmakers won’t act unless they hear from constituents! If enough voices chime in, this legislation can and will move forward. Please connect with *ONLY* *YOUR *Senators or Representatives -- we need all the assistance you can provide us. While our focus is on the Senate Finance committee this week, you can start letting your other members know you want them to *co-sponsor/support this bill* and not the Tax Department.

 

*Talking Points – Veterinary Sales and Use Tax Exemption*

 

*The goal of Bill S.130, which proposes new statutory language, is to achieve clarity for veterinarians concerning our Sales and Use Tax obligations and AVOID a PET TAX on the PUBLIC!*


*Brief History of Sales and Use Tax Policy for Veterinarians in Vermont*

In 1969, when the current statutes were written, “veterinary supplies” was put in the agricultural exemption section. The stated purpose was to lessen the cost of veterinary services in order to support the health and welfare of Vermont animals. The informal guidance from the Tax Department was that medications, medical supplies and medical equipment were all exempt from sales and use tax.

In 2010, the tax department issues TB-53 to clarify the term “veterinary supplies”. This bulletin states: - “…supplies are items consumed or disposed of after a limited number of uses...these supplies are exempt as long as they have direct medical use. Equipment such as blood testing apparatus, x-ray machines and surgical instruments similar to those used for the treatment of humans are exempt from sales tax when used by veterinarians. Items sold to pet owners that are exempt from sales tax include medications and prosthetics”.

The Tax Department’s wish is to follow a new, and stricter interpretation of the existing statute:

This interpretation continues the tax-exempt status for medical supplies only for *agricultural animals (including horses)*. According to a table provided by the Tax Department above, they will tax prescription drugs for* all species*, medical equipment for *all species,* and medications and medical supplies used on pets. The only exception would be if the medications or supplies for animals could fit under the human medical exemption.

 

*Specific issues addressed by S.130*

  • Allowing the sales and use tax exemption for veterinarians is a continuation of the state’s tax policy for the last 50 years which did not distinguish between agricultural and companion animals.

  • This is a revenue neutral proposal in that the state is not now collecting this tax.

  • It eliminates the confusion and headaches for veterinarians who use their medical supplies and equipment on both agricultural and companion animals. This equipment will be subject to Use tax which is paid at the time purchased, not when used.

  • It would eliminate the quagmire of regulating veterinary medicine using human health exemptions. The veterinary industry has too many complex and confounding product and service crossovers to make this approach viable.

  • It would clarify the tax code so that if a veterinary business is audited by the department, the deciding factor in whether or not something is taxable would not be subject to interpretation by the auditor. This would decrease the time spent by both auditor and veterinarian.


*Contact Senate Finance Committee (and their contact links)*
  • Sen. Ann Cummings , Chair – Washington Cty https://legislature.vermont.gov/people/single/2020/14604

  • Sen. Mark MacDonald – Orange Cty https://legislature.vermont.gov/people/single/2020/14608

  • Sen. Michael Sirotkin – Chittenden Cty https://legislature.vermont.gov/people/single/2020/23179

  • Sen. Chris Pearson – Chittenden Cty. (Note – He’s also on the Sen. Agriculture Cmte. which should be concerned about this bill) https://legislature.vermont.gov/people/single/2020/27150

  • Sen. Brian Campion – Bennington Cty – He’s the bill sponsor but you should reach out to him anyway to thank him and share your concerns. https://legislature.vermont.gov/people/single/2020/24030

  • Sen. Becca Ballint – Windham Cty. https://legislature.vermont.gov/people/single/2020/24029

  • Sen. Randy Brock – Franklin Cty. https://legislature.vermont.gov/people/single/2020/29338