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Could push state budget to $10 billion, without cuts in other spending and revenue
by Guy Page
A six percent sales tax on services provided by Vermont businesses would raise $497 million, according to the Fiscal Facts 2026 report released February 26 by the Joint Fiscal Office of the Vermont Legislature.
The actual figure would be higher, because projected tax figures for several professions were unavailable. The JFO study compiled revenue totals for the state’s service sector, applied a six percent tax, and arrived at the almost half-billion dollar figure. The existing sales and use tax creates $651 million in revenue.
The Fiscal Facts report does not offer a recommendation, in either direction, on the sales tax on service. It says that the State of Vermont can add revenue in three ways: raise the rate on an existing tax (or fee), expand the base of an existing tax, or create a new tax. It then uses two pages to describe how much cash would be raised, per service profession, from a sales tax on services.
Currently in the Vermont Legislature, there is no active discussion of creating, raising or expanding a sales tax on services. The state’s proposed 2027 budget at present is projected at $9.4 billion. If the Legislature seized on the JFO report to enact a broadbased sales tax on services, and other revenue remained more or less constant, the state’s next budget could hit $10,000,000,000 – its first-ever 11 figure budget. The 2013 state budget was $1.4 billion.
Vermont sales tax applies to retail sales of tangible personal property and any enumerated charges, unless an exemption applies, according to a 2023 report prepared for the Legislature. However, Some services are already taxed. Examples include:
- Public utility services, including gas and electricity, but excluding water and transportation
- Phone / telecommunications services, but excluding coin-operated telephone service, paging service, private communications service, or value-added non-voice data service
- Cable TV, online streaming
- Rentals, including ski equipment, car rentals
- Admissions to entertainment events, including: athletic events, exhibitions, dramatic and musical performances, motion pictures, golf courses, and ski areas; access to any game or gaming or amusement machine, apparatus, or device; but excluding video game, pinball, musical, vocal, or visual entertainment machines that are operated by coin, token, or bills
- Photo or textile printing and finishing
| Sales Tax on Services would raise $497.4 million: 2/26/26 Joint Fiscal Office “Fiscal Facts” report | |||||
| Professional, scientific, and technical services | $$ Millions | ||||
| Legal services | 19.7 | ||||
| Accounting, tax preparation, and payroll services | 12.9 | ||||
| Architectural, engineering, and related services | 28.5 | ||||
| Computer systems design and related services | 43.6 | ||||
| Management, scientific, and consulting services | 26.9 | ||||
| Advertising and related services | 4.5 | ||||
| Photographic services | 0.4 | ||||
| Veterinary services | 11.7 | ||||
| Administrative and support services | |||||
| Office administrative services | 78.8 | ||||
| Employment services | 11.5 | ||||
| Business support services | 1.7 | ||||
| Travel Arrangement and Reservation Services | 7.3 | ||||
| Security Guards and Patrol Services | 2 | ||||
| Services to buildings and dwellings | 30.7 | ||||
| Waste collection | 10.7 | ||||
| Finance, Insurance and Real Estate, Health Care | |||||
| Office of real estate agents and brokers | 16.2 | ||||
| Real estate property managers | 9.3 | ||||
| Office of real estate appraisers | 0.6 | ||||
| Offices of physicians | 61.9 | ||||
| Offices of dentists | 22.1 | ||||
| Offices of other health practitioners | 15.2 | ||||
| Offices of chiropractors | 1.7 | ||||
| Offices of optometrists | 3.4 | ||||
| Offices of mental health specialists | 2 | ||||
| Offices of specialty therapists | 5.7 | ||||
| Offices of podiatrists N/A | |||||
| Outpatient Care Centers | 35.9 | ||||
| Other Services | |||||
| Motor vehicle repair and maintenance | 24.1 | ||||
| Personal/household goods repair an maintenance | 1.1 | ||||
| Personal care services | 4.2 | ||||
| Death care services | 1.8 | ||||
| Dry cleaning and laundry services | 1.3 | ||||
| Total | $497.40 |
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Categories: Taxes
That would certainly push more Vermonters and tourists into tax free New Hampshire. 🤪
Excuse me. Does the legislature really want me in financial trouble?
Maybe it is time I took a look at the Vermont state budget with a red pen of my own. But that would mean I would have to pay to print it so I could see it. Is it online somewhere? I would bet you a dollar there is graft, fraud, and God knows what all else is in that budget that we should not be paying for.
From 1.4 billion to 9.4 billion in 13 years? I should be so lucky for my income to increase like that. For a state of about 650,000 which has only grown by approximately 25,000 in 10 years and a falling student count to boot with roads that beat my car to pieces. It appears that education spending is not the only thing that is out of control but also neglect of basic services by the state.
I have a budget and I do not spend beyond it. Trouble is I cannot just raise my income when I want to buy things but Vermont Legislators have NO guardrails placed on them to control their spending of other people’s money. They have taken advantage of Vermonters and with a services tax the poor will get hit the hardest.
There’s guardrails it’s called voters, problem is on the day it comes to vote none of the people that just complain never vote!
These disingenuine numb nuts just don’t get it ! NO NEW TAXES ! Period, end of story !
No. No, no. A much easier and more palatable solution would be to reduce spending by 10%. It has been over twenty years this concept has escaped the democrat controlled legislature. A very simple and attainable solution would be to elect conservative republicans to the legislature. Representatives that know how our households budget money: eliminate the dream team that recklessly spends our money. Our elected representatives have a duty to spend wisely and to manage our limited state resources. Every effort to increase social rescue programs and reckless education programs needs to be thwarted. Positive workforce development and economic growth programs deserve your attention.
Stop electing spendthrifts!!
Great state, noted “Death Care Services, 1.8” Not listed, tax to get buried. The dead are not immune. What would the state do with the remains if these taxes couldn’t be paid. Suggestion—put them on the town or state property government building lawns. CA is looking better.
Tom, I probably should not put any ideas in their demented little peabrains, but, give them time, and they will probably propose that the plot that is your eternal resting place should be rented by the month, not owned .
In the last three years, I’ve seen absolutely nothing from Vermont lawmakers that specifically lowered the financial burden on taxpayers. Wake up! Poor people are sick of it.