Reasons to Manufacture in Vermont

Throughout the 2022 Legislative Session, the Vermont Chamber successfully lobbied to modernize Vermont’s tax law by expanding the manufacturing tax exemption to include machinery and equipment used as an integral or essential part of an integrated production operation.

Moving away from the direct use standard to an integrated plan makes all the ancillary processes between raw materials and finished goods, as well as all manufacturing for packaging, testing, and quality assurance, tax-exempt.

What this means for manufacturers:

  • Clarifies and reduces the complexity of tax law to enable greater compliance with the Vermont Department of Taxes, reducing the cost and likelihood of audits.
  • Provides savings to reinvest in workforce recruitment and retention, new equipment and machinery, and technology. 
  • Ensures Vermont’s manufacturers remain competitive with the 33 other states that have similar tax exemptions in place.

Securing this win for the manufacturing industry was possible due to the support of several Vermont Chamber members. Along with Darn Tough, Maple Landmark, Vermont Precision Tools, and Twincraft Skincare, Julia Birnn Fields, Owner of Birnn Chocolates of Vermont was one of the business leaders who shared her story with legislators. Julia and Chris discussed this win, and what it will ultimately mean for businesses like hers, on the State to Main podcast.

Through direct testimony and the lobbying efforts of the Vermont Chamber, the 6% aviation sales tax exemption was made permanent in 2018 for the maintenance of parts, equipment, and machinery of both commercial and private aircraft.

This economic development tool is growing an emerging maintenance, repair, and overhaul cluster in Vermont, which is part of the state’s combined $2 billion aerospace manufacturing and civil aviation industry, and attracting large, out-of-state and out-of-country aerospace OEMs and Primes seeking to lower their costs and gain a competitive advantage as the aviation industry recovers from the pandemic.

In 2022, the Vermont Chamber secured a $10 million earmark from U.S. Senator Leahy for a new Vermont Aviation Technical Training Center, designating the Burlington Technical Center as the recipient. This fiunding will train the next generation of maintenance, repair, and overhaul technicians.

Through direct testimony and lobbying efforts, the Vermont Chamber ensured $300 thousand in FY2022 State funding for a Montreal Office for Vermont to recruit foreign direct investments. The 10% U.S. tariff on Canadian aluminum was also repealed in partnership with Canadian and Connecticut partners and the governors of VT, NH, and ME (2020).