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Vermont enacts various tax provisions, including 5-year consolidated return election requirement

On June 5, Vermont Gov. Peter Shumlin approved a measure including numerous tax provisions. Effective for taxable years beginning on or after Jan. 1, 2014, taxpayers choosing to file consolidated corporate income tax returns in lieu of separate returns must now make an affirmative election to do so, and such election is statutorily binding for at least five years. In addition, the research and development credit available for Vermont expenditures has been lowered for the 2014 tax year and thereafter from a maximum of 30% to a maximum of 27% of the amount of the federal credit. The legislation also updates the state’s conformity to the Internal Revenue Code for income tax purposes. Finally, sales tax will apply to sales of materials and supplies to contractors used to improve or repair real property, and use tax will be imposed on telecommunications service beginning July 1, 2014.

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