(Host) State Auditor Elizabeth Ready says major changes are needed in a program that offers tax credits for companies that create new jobs. According to Ready, the state’s given away millions of dollars in credits without any verification that the new jobs were ever created.
Since 1998, the Vermont Economic Progress Council has given its approval to more than $80 million in corporate tax credits. As of the first of this year, companies participating in the program had made formal requests to reduce their tax liability by $24 million.
Ready says the state Tax Department is supposed to verify that the companies actually did create new jobs. But Ready says an audit by her department shows this was never done:
(Ready) “We take a view that the Tax department has broad authority and always did, and that they have a responsibility to do diligence with all returns to protect all taxpayers. And so our position is that those should have been verified.”
(Host) Ready says she’s encouraged that newly appointed Tax Commissioner Richard Mallary has pledged to make verification a top priority for his department. Ready also notes that corporate tax revenues have fallen dramatically in recent years. Last year the state received just over $32 million in corporate income tax receipts.
Ready thinks lawmakers should debate whether or not Vermont should join with four other states that have eliminated their corporate income tax:
(Ready) “I think that it’s something that we can really seriously consider because it would be a tool for economic development and it would benefit all Vermont companies, not just those that are eligible for tax credits.”
(Host) Ready is also concerned that a majority of tax credits were awarded to companies in Chittenden County, while businesses in the eight smallest counties received only 9% of the benefits.