Megan Smith

Dear Residents of Rutland-Windsor 1,

This report summarizes a few of the many important issues we’ve been working on this session.  For the complete list of issues you can go to megansmithforvermont.com.  Below are some

of the highlights.

From the day we arrived in Montpelier there has been a charge to design legislation that will allow our state government to DO BUSINESS DIFFERENTLY. Last session was spent in the defensive mode as we all tried to come to grips with the devastating effects of the recession and awaiting the details of the stimulus funds. By the end of the year we had all realized that in these times of financial uncertainty comes opportunity and challenge. It is important that we find new and innovative ways for our government to do more with less.  As legislators, we must “look outside the box.” A joint legislative committee was formed at the end of the last session and charged with a dual mission of improving government efficiency while identifying direct General Fund savings for fiscal year 2011. With long-term success in mind, government needs to be efficient, effective and sustainable in good and in challenging times.

The change needed is straightforward: to ask a different question.  Instead of asking “What resources are needed to continue or improve the existing effort,” we now ask “What does the outcome look like and how is it measured?”  We change from purchasing an effort to purchasing an outcome, one that citizens value at a price they are willing to pay.

These are the overall goals of the recently enacted Challenges for Change legislation that puts in place a beginning process for Vermont state government to adopt budgeting and administrative practices which several other states have adopted and which have been in place in the private sector for a long time.

Through the difficult work of the joint committee, legislation was passed with the intent of saving $38 million and giving taxpayers better value for their money. The bill sets up eight challenges. They include rewriting state contracts with a focus on performance measures, redesigning human service programs to focus on client services, making changes to shrink the prison population, reducing administrative expenses in education, achieving better results in special education, cutting the bureaucracy from environmental and energy regulation, getting more for your dollar in economic development, and giving governmental units greater freedom to generate entrepreneurial revenue.  Everything is “on the table.”

Commerce Committee Report

Jobs.  That’s where we’re focused.  What are we doing about it?  We’ve targeted three areas:

Broadband. Everyone needs to be connected to the information superhighway.  We know that it’s not just about strengthening businesses’ access to the internet. The ordinary Vermonter is using broadband for some of the most innovative projects. The legislature is investing millions of dollars in new and faster connections for homes and business districts.

Workforce Training. By investing money in targeted skills-building programs, we help Vermonters get good jobs and we provide businesses with access to qualified and productive future employees.

Access to Capital. We are addressing one of the root causes of our current recession – tightening of the credit markets and lack of access to cash.  For cities and towns, as well as large, medium, and small companies, Vermont provides bonds with especially low interest rates and tax deductions, as well as loans with below-market rates.  For entrepreneurial low-income Vermonters, we offer help with critical business skills; we offer help with critical business skills; we also provide small grants to help them found their own businesses that also keep them off public assistance.

We also set policy that makes business and commerce operate more efficiently and equitably. For example, we’re addressing issues like unemployment insurance and workers compensation, rights for condo-owners and others in home associations, mortgage hurdles for homeowners living on private roads, fair labor laws that ensure proper classification of employees for workers’ compensation, ticket scalping, nurturing the buy local movement, and supporting Vermont’s prudent banks and their Vermont regulators, to name just a few issues.

LEGISLATION PASSED IN THE HOUSE.

The date that all bills have to be out of committees and passed on the floor of the house to be sent to the Senate each session is known as “crossover”.  That date this year is March 12^th.  Because of this deadline we have spent most of our time this session in our committees taking testimony and crafting legislation.  A few “time sensitive” bills have come up for vote as well as bills that were almost finished at the end of last session.  Below are a few bill that have passed the house.

Supporting Our National Guard

We, as legislators, commend the 1,500 Vermonters from across the Green Mountain State deploying to Afghanistan.  On the first day of the legislative session, the House passed a resolution honoring the Vermont Guard and continues to make every attempt to ensure our servicemen and women do not have to worry about their families back home while they serve our nation overseas.

The House and Senate have passed the Military Parents’ Rights Act, which protects the parental rights of military members when they are absent from their children’s lives due to orders.  Swift mobilization can be disruptive to custody.

Changing the Date of the Primary Election

Vermont received notice this fall that we are not in compliance with the Military and Overseas Voter Empowerment Act.  Beginning with the November 2, 2010 general election states must send absentee ballots to overseas voters at least 45 days before any federal election. Last month, the legislature approved moving the date for the primary election to the fourth Tuesday in August.  The secretary of state’s office has requested moving the primary date forward since 2000 but the legislature never acted on it.  Presently our laws are set up to send ballots out 30 days before an election.

If there was a year to change the primary election date to ensure deployed Vermonters get their ballots, this is it! We have over 1500 Vermont soldiers deployed to Afghanistan.  We need to show our support for our troops so they can exercise their right to vote, too.  They are fighting for democracy; let’s make sure they can participate in it.

We also passed legislation allowing towns to protect their river corridors, restricting felt boots in our fishing waters and putting a moratorium on the “current use” program.

HOT TOPICS THIS SESSION

Vermont Yankee

It is safe to say that the biggest issue of the session has been the re-licensing of Vermont Yankee.  Until approximately a month ago it appeared that Yankee had the support to remain.  Unfortunately, recent occurrences have caused even Vermont Business magazine has loose faith in Entergy calling their behavior “inexcusable and indefensible” and doesn’t see it as a long-term solution to Vermont’s power needs. This will be playing out for the rest of the session.

Texting and Highway Safety

The House is committed to a comprehensive approach to keeping our highways safe. While we are pleased the Senate passed a ban on texting, it is only part of the larger problem of distracted driving and public safety.

Data shows that cell phone use quadruples a driver’s risk of a crash.  Youth are already more likely to be in crashes, yet are a much smaller portion of the driving population. The National Center for Disease Control considers youth highway fatalities a public health risk.  Each year highway crashes cost Vermont $234 million in Medicaid, emergency services, law enforcement, and other programs and services.  Therefore, a bill that restricts cell phones to hands-free only by adults, bans cell phones and hand-held electronic devices for junior operators (16-17 year olds), imposes a nighttime curfew for junior operators, bans texting and mandates seatbelt use would be a comprehensive, responsible approach to saving lives and keeping our communities safe.

Supervisory Union Consolidation or Merger

The House is considering a bill that proposes to reduce the number of supervisory unions from the current 60 to no more than 16, similar to the current technical center districts. If the bill passes, by July 1, 2012 the commissioner of education would have finalized the new districts, and they would go into effect.

The centralized authority would include one board based on at-large representation and one superintendent. All purchasing, special education, transportation, negotiations, determination of common level of appraisal, school choice, technical center and preschool affiliation, and other transitional issues would be fully implemented by

July 2012.

Reporting and Paying the Meals and Rooms Taxes

To report meals and rooms sales, use the accrual basis. The accrual basis recognizes income as earned at the time of the sale, even if the cash associated with the sale has not yet been received. Thus, all sales made in a month are reported even though not all the receipts from the sales may have been received.

Example:

Quality Hotel rented out 26 rooms in February at $95 each. Sales for the month of February are $2,470. Two of the guests paid by credit card at the end of the month and the payment not yet been received from the credit card company. Quality Hotel reports $2,470 in sales and $222 rooms tax ($2,470 X 9%).

The Department sends you returns once a year preprinted with your name, address, Business Tax Account Number, the reporting period, and the due date. The meals and rooms return booklets have returns to report from July to the following June.

Filing Frequency

The Department determines your filing frequency (how often you report and pay the taxes) based on the amount of your tax obligation. The Department reviews its records annually and may change your filing frequency based either on a change in the amount of your tax obligation or based on your tax compliance history. You will receive at least 30 days notification of any change. You can request, in writing, a different filing frequency, but any change will not take effect until the beginning of a quarter (January, April, July, or October). Do not change your filing frequency until you receive written notification from the Department.

The due dates for filing returns are:

Monthly $501 in annual tax:

Due the 25th of the following month (except Jan: due Feb 23)

Quarterly $500 or less in annual tax:

Due the 25th of the month following the end of the quarter.

Personal Liability for the Tax

Liability for meals and rooms tax falls not only on the business required to collect the tax, but also on any officer or agent of the business who is responsible for collecting and remitting the tax for the business. The Department of Taxes can hold such individual personally liable for any tax that is not timely reported and remitted by the business

ROOMS TAX

is a tax on the receipts received for the right to occupy any room in a hotel.

What Is a Hotel?

Vermont law provides a broad definition of what constitutes a hotel for purposes of the rooms tax. A hotel is an establishment that holds itself out to the public by offering sleeping accommodations for a charge. The definition includes not only what are commonly thought of as hotels, but also inns, motels, tourist homes and cabins, ski dormitories, ski lodges, lodging homes, rooming houses, furnished-room houses, boarding houses, private clubs, bed and breakfasts, and rentals of condominiums, rooms or houses. If you rent accommodations for 15 days or more in a calendar year – even if the property is your own home, and even if the occupant uses the accommodations for something other than sleeping (for example, as a temporary office space) – your property qualifies as a hotel

Taxable Room Charges

Any charge by a hotel that gives a person the right to use rooms, furnishings or services of the hotel is subject to the rooms tax, as long as the establishment meets the definition of “hotel” under Vermont law. The tax applies whether or not the room contains sleeping accommodations, and even if the person did not exercise the right to use or occupy the property.

Examples:

• Best Conference rents a room to a salesperson to display sales samples. The salesperson uses the room only during the day and does not stay overnight. The charge for the room is subject to the rooms tax. The rental entitled the salesperson to the use of the room even though the room was not used for sleeping accommodation.
• Best Conference rents out a conference room for a training seminar. The charge for the room is subject to the rooms tax. The rental provided use of a room in the hotel even though the room was not used for sleeping accommodation.
• Tammy Beech owns a cottage on the lake. She rents the cottage out during the months of June and August to help pay for the expenses of the cottage. Renting more than 15 days in a calendar year means the cottage meets the definition of a hotel. Tammy must collect the rooms tax on the rentals.

Separately Stating the Rooms Tax

You need not separately state the rooms tax, however, you must prominently place a notice in the hotel whether the room charge is “plus tax,” “exclusive of tax,” or “tax included.” If requested, you must provide your customer with a written invoice separately showing the charges for the room and the charge for the tax. You may not, directly or indirectly, indicate that you will pay the rooms tax for the customer, refund the rooms tax to the customer, or that rooms tax is not a part of the entire rental cost.

been without the coupon.

Non-Taxable Rooms Charge

1. Rentals for less than a total of 15 days a calendar year.

Example:

Sue Skier owns a condo at Downhill Ski Resort. She rents it once a year to a neighbor for two weeks and at no other time during the year. Because the total amount of time rented in the calendar year is less than 15 days, the rent is not subject to the rooms tax. Note: If Sue uses a real estate broker or rental agency to rent the condo for her, the rental charge is subject to the rooms tax even if the condo is rented less than 15 days a year.

2. Rentals by a “permanent resident”. The renter of a hotel room for more than 30 consecutive days becomes a “permanent resident” of the hotel after the 30th day, and charges for his or her continual and uninterrupted occupancy from the 31st day forward are not subject to the tax. The occupancy does not have to be for the same room, but must be in the same hotel.

Example:

Martha Seaward is having her house redecorated. During the redecoration, she rents a room at Fine Rooms. The redecoration takes two months. For the first ten days Martha stays in a suite on the third floor but moves to the fifth floor where it is quieter for her remaining stay. The first 30 days of the rental are subject to the rooms tax. The remaining rental is not subject to the tax.

3. Lease of room for more than 30 days. A lease is a type of contract that establishes a landlord/tenant relationship between the parties. If a renter has the right to occupy a room for more than 30 days pursuant to a pre-existing lease, the entire rental is exempt.

Examples:

• Wings R Us Airlines has a one-year lease with Stop Over Inns to provide rooms for its pilots and staff. The inn is to provide a room to the staff but the lease does not rent specific rooms. The price is the same whether the staff stays in the room or not. Wings R Us has a lease with the inn for more than 30 days. The entire lease charge is exempt from rooms tax.
• Jim is in Vermont for business for eight weeks and checks into Homelike Suites, an extended stay hotel. Jim indicates at check-in that he will occupy a suite for the full eight weeks because Homelike offers a discounted price for customers who agree to, and actually stay, 45 days or more. Should customers shorten their lengths of stay to less than 45 days, they agree that they will be charged a higher daily rate, plus a $5 per day penalty. Whether or not Jim agrees to stay, and actually stays, the full eight weeks, the charge for the first 30 days is subject to the rooms tax. Jim becomes a permanent resident on day 31. See # 2, above. In this example, Jim is not subject to a pre-existing lease and is considered a lodger, rather than a tenant; accordingly, the first 30 days of his stay is not exempt from rooms tax.

Collecting the Rooms Tax

Rooms tax charts showing the amount of tax to collect are available on the Department’s website or you can order a supply by fax at (802) 828-5787 or by calling (802) 828-2551.

If you receive payment in a foreign currency, you must convert the foreign currency into U.S. dollars at the current exchange rate and collect the tax based on that amount.

The rooms tax is on the full amount of the charge for the right to occupy the room. If another charge is included in the room price but is not separately stated, the entire cost is subject to the rooms tax.

Personal Liability for the Tax

Liability for rooms tax falls not only on the business required to collect the tax, but also on any officer or agent of the business who is responsible for collecting and remitting the tax for the business. The Department of Taxes can hold such individual personally liable for any tax that is not timely reported and remitted by the business.

Arriving at the State House as a freshman is one of the most intimidating experiences of my life (second only to my first day at a brand new school my Senior year of High School).  Fortunately we had a 3 day orientation so we freshman had formed a pretty tight bond.  Even though a snow storm raged outside Greg managed to show up to support me and share my big day. 

After a ceremony assigning our seats and the amazing Pom and Circomstance of our swearing in by the Governor, we received our Committee assignments and got to work.  

Here are my initial perceptions:

Most impressive 

Even though we have no offices or personal staff the support afforded us by the Sargent of Arms and Clerks’s offices is second to nothing I have ever experienced.

They anticipate our needs and help us along every new step of the way. 

Most surprising 

I have to give this to the lobbyists.  These men and women have knowledge that we would never have the time to learn and they are  there to help us research issues answer questions.  Not that they don’t have their own agendas but for the most part they were very helpful.  

Most intimidating 

Speaking on the floor of the house still scares me to death.  On the first day my predecessor, Harry Chen, was present and Representative Peg Flory told me that it was up to me to introduce him.  I had to rise, be called upon, and then use the microphone at my desk to announce that “Former Representative Harry Chen is present today and he is seated in the windows”.  At this applause erupted and Harry was given a standing ovation.  I wanted to faint!  I don’t know what was worse – speaking on the floor or realizing how much he was admired and that I was taking his place. 

Most Fun

Getting to know the 11 people on my committee, 140+ people in the house, Senators, staff, State Commissioners, and everyone else in the State Capital.  We did this over meals, yes….at Cocktail Parties, Legislative Ski night, Dance Parties, and  even a Caberet  (a night set aside to do skits poking fun at each other). These events were planned by leadership to keep us working as a “team” even though we had different party affiliations and many different ideas on how things should be done. Harry told me that the friends I made would be the best part of the whole experience and he was so right!

Least Fun

Contentious bills in committee and on the floor of the house.  I am sure I will get used to this but it is hard – everyone has strong arguments on the subject at hand and it is often difficult to make up your mind.  Many long term lawmakers have mastered the skills of persuasive argument!  

Hardest Adjustment

The sitting…the waiting…the listening…!!!!  Anyone who knows me understands that these are not my strong suits.  I must say that I got better at all three and hope to continue to improve.

I hope to use this blog to connect with my constituents with pertinent, current issues.

I get many emails that call to my attention items of interest that develop and I will also follow these here.

Thanks for your interest and please keep in touch!