Vermont Direct Financial Incentives 2012
Vermont's economic development, finance and tax organizations provide a range of incentive programs to initiate new business and commercial investment. Specific programs include the Vermont Training Program, Vermont Employment Growth Incentive (VEGI), and the Redevelopment of Contaminated Properties/Brownfields Program.
The Vermont Training Program promotes industrial expansion and encourages the creation and retention of jobs in manufacturing by providing training for new and existing businesses. Individually designed programs may include on-the-job, classroom, skills-upgrade, or other specialized training mutually agreed upon by the state and the employer. The state may pay up to 50 percent of the related training expenses.
Industrial development bonds:
The Vermont Economic Development Authority (VEDA) promotes economic prosperity and increases employment for Vermont businesses by providing low-cost capital for eligible facilities. Programs include direct loans, mortgage insurance, the Financing Access Program (which utilizes a "pooled reserve" concept to enhance opportunities for small businesses to access commercial credit with premiums based on a percentage of the loan amount paid to VEDA by a participating bank and deposited into a reserve account on behalf of that bank), export finance, the Vermont Small Business Development Corporation, industrial revenue bonds, rural economic activity loans, agricultural facility and debt stabilization loans, and Vermont Job Start.
Vermont Employment Growth Incentive (VEGI):
VEGI economic incentives are cash payments authorized to companies in exchange for meeting job creation and capital investment targets that must occur before the company is paid the incentives over a period of years. Applications must meet nine guidelines and a cost-benefit analysis to determine whether the economic activity that will be generated by these projects will result in a net increase in revenues, even after payment of the incentives.
Redevelopment of Contaminated Properties/The Brownfields Program:
In an attempt to reduce the fear of liability and to encourage the reuse and redevelopment of contaminated properties over development of greenfields, the Vermont Legislature in 1995 passed H. 190 (codified at 10 V.S.A. §6615a). The legislation establishes a defined process by which developers can conduct cleanup of contaminated properties and obtain protection from liability.
Research and Development Tax Credit
Vermont companies that make eligible research and development expenditures in Vermont can claim a tax credit equal to 30 percent of the federal tax credit allowed in the taxable year. Eligible research and development investments are the same as those defined by the federal R&D tax credit under Section 41(a) of the IRS Code, which are made in Vermont. If the tax credit cannot be applied in the year earned, the taxpayer can carry forward the credit for up to 10 years.
Affordable Housing Tax Credit
Purpose: Creation or retention of affordable housing for lower income Vermonters.
Credit Amount: 25% of qualified basis of the housing project.
Credit Limit: Straight-line depreciation method over recovery period of at least 27.5 years.
Vermont Seed Capital Fund
Purpose: Increase amount of investment capital available to new Vermont firms or to existing Vermont firms for the purpose of expansion.
Credit Amount: The first $5 million of capitalization contributed by taxpayers on or before January 1, 2014.
Credit Limitation: Lesser of 4% of contribution or 50% of tax liability prior to allowance of this credit. There is a four year carry forward. Maximum aggregate credit 20% of contribution. Credit is nontransferable except from an involuntary transfer of interest in the credit.
STEM (Science, Technology, Engineering and Math) Award
The STEM (Science, Technology, Engineering and Math) Award Incentive was passed in the 2011 legislative session as a two-year pilot program to award $1500 annually for each year up to five years of employment to new graduates with outstanding student loans.hired by Vermont companies in eligible occupations.
Vermont State Contact:
Vermont Department of Economic, Housing and Community Development
1 National Life Drive
Montpelier, VT 05620-5001
Incentive and tax information is provided to Area Development by each state's economic development or commerce agency for information purposes only and is subject to revision at any time by the state government. Please contact the state agency directly for full requirements and offerings.