One Big Beautiful Bill gives scholarship donors $1700 federal tax credit – but Dem majority doesn’t want it
By Guy Page
Vermonters will not be allowed to take a federal tax credit for contributing to a private/independent school scholarship program, if a House Ways & Means Committee miscellaneous tax bill introduced yesterday becomes law.
H.933, titled “miscellaneous administrative and policy changes to the tax laws,” rules that “Vermont shall not participate in the federal tax credit program for contributions to scholarship granting organizations under 26 U.S.C. § 25F,” and “any election to the contrary made by another State official or entity is void and shall have no effect.”
The One Big Beautiful Bill legislation passed by Congress last year allows states to allow state taxpayers to receive a dollar-for-dollar credit on their federal taxes for up to $1700 of donations to a private (including religious) scholarship granting organization.
However, the OBB also lets states opt out of the program. At the behest of Ways and Means Chair Emilie Kornheiser (D-Brattleboro), the committee voted to not allow the federal tax grant.
All four Republicans on Ways & Means voted to keep the tax credit, but they were outnumbered by a unanimous vote of the Democrat majority.
The GOP members on Ways & Means are Mark Higley (Lowell), Bill Canfield (Fair Haven), Woodman Page (Newport) and Carolyn Branagan (Georgia). Democrat members, besides Kornheiser, include Charles Kimbell (Woodstock), Bridget Burkhardt (South Burlington), Rebecca Holcombe (Norwich), James Masland (Thetford), Carol Ode (Burlington), and Edward “Teddy” Waszazak (Barre City).
Page said the tax credit was a matter of interest at a recent legislative breakfast, especially by parents involved with the local Christian school.
H.933 – which has many other proposed tax changes – was referred to the Appropriations Committee. Republican Ways & Means Committee members said a floor amendment to restore the federal tax credit may be proposed. The Senate reportedly has an opt-in in the works. If it passes the Senate, it will likely be addressed in a House-Senate committee of conference.