19 May 2015

Vermont Preserves Charitable Deduction in Final Tax Deal

Vermont Governor Peter Shumlin came to an agreement with state lawmakers on May 16 on a nearly $30 million tax package that preserves the state’s charitable deduction. A proposal to cap the charitable deduction was on the table during negotiations because it was included in legislation passed by the Vermont House in March. While the Senate version of the tax legislation preserved the charitable deduction, it only allowed a deduction for donations to state-based charities. In a press conference last week, Shumlin reiterated his support for fully preserving tax incentives for charitable giving.

“Limiting the ability of Vermonters to give to charities is not just a bad idea, it would be terrible economic policy. Charities and non-profits in this state not only provide services to our neighbors in need, they employ our neighbors, drive economic activity, and contribute greatly to our state’s economic success,” Shumlin said.

The deal crafted on Saturday places no limits or additional restrictions on charitable deductions or catastrophic medical expense deductions. There will be a cap on all other deductions at 2.5 times the standard deduction.

“So everyone has given a little to get to this plan,” Shumlin said. “Most importantly, we’re meeting our commitment … of closing the budget gap by making smart choices for Vermonters.”