WILMINGTON -- With Governor Peter Shumlin asking for $500,000 more in downtown development tax credits in the state budget, it seems it is a good time to be part of the Vermont Downtown Program.
"That would be good news," said Wilmington Town Manager Scott Murphy.
Last month, the Department of Housing and Community Development hosted a hearing on a proposed downtown redevelopment rule. Murphy testified on behalf of Wilmington.
If enacted, it would allow business owners or developers the opportunity to be exempt from paying sales tax on anything that goes beyond $250,000.
Applicants would be required to fill out a single-page form and send it to the Downtown Program for review. A committee would make sure the efforts were under way in the designated downtown. The applicant would be required to pay $15,000 to the Department of Taxes and then receive a tax exempt ticket.
"Everything you pay from there on would be sales tax free," said Murphy. "If you had a $350,000 project, you'd only have to pay sales tax on the first $250,000. The rest would be tax free."
Dot's Restaurant, which returned to Main Street last month, is a business that could have benefited from this law. Having spent about $1 million in redeveloping their building, its owners would have been eligible for tax exemption on $750,000 of its building purchases.
According to a document from the Department of Housing and Community Development, the rule "exempts from sales and use taxes certain building materials that are ‘incorporated into a downtown redevelopment project as defined by rule of the Commissioner of the Department of Housing and Community Affairs.'"
The law was established in 1997 but had not been adopted due to the lack of a clear definition for downtown redevelopment projects. Now, towns receive downtown designations through the Downtown Program.
The public hearing had been part of an effort to allow projects to make use of this proposed statutory benefit.
"By reducing the cost of construction materials, this rule will encourage downtown redevelopment projects. Increased construction activity in designated downtown designations will improve property values and encourage additional compact development," stated the document issued before the hearing.
Wilmington received approval for its downtown designation last year. The downtown group Wilmington Works was established shortly thereafter.
Murphy was hopeful that the statute would be adopted by the middle of March.
"I think it would be a great program to have," he said. "They're hoping to fast track it through."
Chris Mays can be reached at 802-254-2311, ext. 273, or email@example.com. Follow Chris on Twitter @CMaysReformer.