10-007 Code Vt. R. 10-060-007-X
Introduction
The principle of the Vermont Tax Department in assessing and collecting franchise taxes is to collect all taxes which any corporation may be required to pay, but no more; to develop smooth and efficient functions within its own organization and to cultivate cordial and helpful relations with other public agencies and the taxpayers of the State. This policy is intended to guide the Vermont Tax Department in performing its essential services.
The Vermont Franchise Tax is measured by "entire net income" (based principally upon Federal Net Income) or the portion thereof allocable to Vermont. The rate of tax measured by "entire net income" is four per cent or a minimum of $ 25 whichever is greater. A corporation is entitled to allocate its business income within and without Vermont only if it has a regular place of business outside the State; otherwise 100% of its income must be allocated to Vermont. Income is allocated by the formula most generally used in other States, viz: tangible property, sales or charges for services performed and payrolls. The tax is imposed annually for each of the taxpayer's calendar or fiscal years and is measured by the "entire net income" (or other allocable basis) of the next preceding year of operations. The privilege year and the base year do not coincide with each other in that the tax paid for the privilege of doing business in any particular calendar or fiscal year is measured by the operations and "entire net income" of the preceding calendar or fiscal year.
The tax imposed by Chapter 44 is a franchise, privilege or excise tax. It is not an income tax although income is the measure of computing the amount payable; nor is it a direct tax on the corporation's assets although in peculiar situations assets may be in whole or in part a measure for computing the amount payable.
A foreign corporation doing business in this State is also subject to a Vermont Franchise Tax and the regulations herein stated.
Section 950 of the Tax Law subjects to franchise tax all corporations which are not subject to franchise tax under some other provision of the Vermont Law and are not exempt from tax.
The term "taxpayer" means any corporation which is subject to tax imposed by Section 950, Chapter 44 of the Vermont Statutes, Revision of 1947, as Amended.
The term "corporation" includes any entity created as such under the laws of the United States, any state, territory or possessions thereof, the District of Columbia, or any foreign country, or any political subdivision of any of the foregoing, which provides a medium for the conduct of business and the sharing of its gains. It also includes any joint-stock company or association; any business conducted by a trustee or trustees wherein interest or ownership is evidenced by certificate or other written instrument and a dissolved corporation which continues to conduct business in this State. The term "corporation" does not include a membership or other non-stock corporation unless it is doing business for profit.
The tax is imposed on every domestic corporation, with specified exceptions, for the privilege of exercising its corporate franchise; that is to say, for the mere possession of the privilege. Accordingly, a domestic corporation is subject to tax for every fiscal or calendar year, or part thereof, during which it is in existence, irrespective of whether it does any business, owns any property, maintains any office, or engages in any activity, within or without Vermont. For the same reason, a domestic corporation is subject to tax even though it carries on its business entirely outside of Vermont.
Example: A corporation is incorporated under the laws of Vermont on July 1, 1953. It begins to do business on February 1, 1954, setting up its books on the basis of a calendar year. Since the corporation had the privilege of exercising its corporate franchise from July 1, 1953 to December 31, 1953, it is subject to tax for that period.
A domestic corporation which has been dissolved by the filing of a certificate of dissolution or otherwise, is not subject to the franchise tax after such dissolution, unless it continues to do business in Vermont, in which case it remains subject to tax. A dissolved corporation, the activities of which are limited to the liquidation of its business and affairs, the disposition of its assets (other than in the regular course of business) and the distribution of the proceeds, is not doing business. On the other hand, a dissolved corporation which engages in activities in the pursuit of profit or gain is doing business.
The tax is also imposed on every foreign corporation, with specified exceptions, which does business in Vermont in a corporate or organized capacity, irrespective of whether it has qualified to do business in Vermont.
The term "doing business" is used in a comprehensive sense and includes all activities which occupy the time or labor of men for profit. Irrespective of the nature of its activities, every corporation organized for profit and carrying out any of the purposes of its organization is doing business. In determining whether a corporation is doing business, it is immaterial whether its activities actually result in a profit or a loss.
Whether a foreign corporation is doing business in Vermont is determined by the facts in each case. Consideration is given to such factors as:
In determining whether a foreign corporation is doing business in Vermont, no consideration is given to the following factors:
A foreign corporation, the business of which is wholly interstate commerce, may do business in Vermont without becoming subject to the tax. But a foreign corporation, the business of which is partly interstate commerce and partly local business, is subject to the franchise tax imposed for the privilege of doing business in Vermont, and such tax, when measured by "entire net income," is measured by all of its "entire net income," including that derived from interstate commerce.
The mere ownership by a foreign corporation of goods, which are held in Vermont by an independent factor on consignment for sale at his own discretion, does not constitute doing business in Vermont.
A foreign corporation, which regularly maintains a stock of goods in Vermont and makes deliveries to its customers from such stock, is doing business in Vermont so as to be subject to tax.
Example 1: A foreign corporation is engaged in the business of manufacturing. Its factory is located outside Vermont but it maintains a stock of merchandise in Vermont. Orders are filled from its Vermont stock. The corporation is subject to the Vermont Franchise Tax.
Example 2: A foreign manufacturing corporation has its factory outside Vermont. Its only activity in Vermont is the solicitation of orders for its products through a sales office. The orders are forwarded to its home office outside the State for acceptance and the merchandise is shipped by common carrier from the factory direct to the purchasers. The corporation is subject to the Vermont Franchise Tax.
Example 3: A foreign corporation is organized for the purpose of buying and selling securities. It maintains an office in Vermont from which it directs the purchase and sale of securities. The corporation is subject to the Vermont Franchise Tax.
Example 4: A foreign corporation is organized or operated for the purpose of buying and selling securities but does not maintain a physical office anywhere, other than a statutory office in the state of its incorporation. Regular and continuous purchases and sales of securities are directed by its officers or agents located in Vermont. The corporation is subject to the Vermont Franchise Tax.
Example 5: A foreign corporation, the sole assets of which consist of patents, has an office in Vermont at which it issues patent licenses to out-of-state manufacturers and at which it receives royalties. The corporation is subject to the Vermont Franchise Tax.
Example 6: A foreign corporation, formerly engaged in the business of manufacturing in another state, discontinues such business and transfers its office to Vermont where its activities consist solely of the liquidation of intangible personal property, the acquisition of United States Government bonds and the receipt of interest on such bonds, and the holding of directors' meetings. The corporation is subject to the minimum Vermont Franchise Tax.
Example 7: A foreign corporation imports grain and stores it in Vermont. The grain is purchased from time to time by another corporation which resells it to its customers. The foreign corporation is subject to the Vermont Franchise Tax.
Example 8: A foreign corporation which operates several retail stores outside Vermont, leases an office in Vermont for the convenience of its buyers when they come to Vermont. The buyers also purchase merchandise in Vermont, ie: maple syrup, sugar, etc., for other retailers who pay the corporation a commission for such services. Salesmen call at such office to solicit orders from the buyers and merchandise is shipped by the sellers directly to offices of the purchasers outside Vermont. The corporation is subject to the Vermont Franchise Tax.
Example 9: A foreign corporation, which operates several retail stores outside Vermont, leases an office in Vermont for the convenience of its buyers when they come to Vermont. It has several employees permanently assigned to such office. Salesmen call at the office to solicit orders from the buyers, and the merchandise is shipped to such office by the sellers. Upon receipt, the merchandise is examined, separated and ticketed, by the corporation's employees and then shipped by them to the various stores of the corporation outside Vermont. The corporation is subject to the Vermont Franchise Tax.
The following corporations shall not be deemed to be mercantile, manufacturing, or business corporations within the meaning of Chapter 44, and shall be exempt from the taxes imposed:
A corporation subject to tax under § 950 may, by reason of a change in the nature of its activities or holdings, cease to be subject to such tax and become taxable under some other section of the Vermont Law. Conversely, a corporation subject to tax under some other section of the Vermont Law may, for the same reason, cease to be taxable thereunder and become subject to tax under § 950. The date on which any such change of classification becomes effective will be determined by the facts of each case.
A corporation which becomes subject to tax under § 950 during one of its fiscal or calendar years by reason of a change of classification is treated in the same manner as a corporation which acquired its franchise or began to do business during such year. Similarly, a corporation which ceases to be subject to the franchise tax imposed by § 950 during one of its fiscal or calendar years by reason of a change of classification is treated, in so far as § 950 is concerned, in the same manner as a corporation which is dissolved or ceases to do business in Vermont during such year.
Example 1: A corporation, subject to tax under § 950, which owns and operates a hotel (the personal property in which is owned by another person or corporation) and has no other assets or business, ceases to do business on April 15, 1953 and files necessary documents, see Articles 1000, 1001. The corporation ceases to be subject to tax under § 950 on April 15, 1953.
Example 2: The corporation referred to in Example 1 resumes possession of the hotel and commences to operate it again on June 1, 1954. The corporation again becomes subject to tax under § 950 on June 1, 1954.
§ 950, Chapter 44, imposes a franchise tax on every domestic corporation for the privilege of existing as a corporation, and on every foreign corporation which does business in Vermont.
All corporations incorporated in Vermont or all foreign corporations beginning to do business in Vermont immediately become subject to tax. The first privilege and base year of every such corporation is its first calendar or fiscal year.
The term "calendar year" means a period of twelve calendar months ending on December thirty-first (or a period of less than twelve calendar months beginning on the date a taxpayer becomes subject to tax and ending on December thirty-first), in cases where the taxpayer
and also includes, in the case of a taxpayer which changes the period on which it keeps books from a fiscal year to a calendar year, the period from the close of its last old fiscal year to and including the following December thirty-first.
The term "fiscal year" means
In general, the calendar or fiscal year on the basis of which the taxpayer is required to report for Federal income tax purposes is the calendar or fiscal year on the basis of which it is required to report for purposes of the Vermont Franchise Tax.
The franchise tax is imposed on every domestic corporation, with specified exceptions, for the privilege of exercising the corporate franchise granted it by the State of Vermont and on every foreign corporation, with specified exceptions, for the privilege of doing business in Vermont in a corporate or organized capacity.
The tax is imposed for each calendar or fiscal year of the taxpayer, or any part thereof, during which the taxpayer has a corporate franchise granted by Vermont or does business in Vermont.
The tax for each such year or part thereof is measured by the taxpayer's "entire net income" at the rate of four per cent or a minimum of $ 25.00, whichever is greater.
A report must be filed by the taxpayer on or before May fifteenth next succeeding the close of each calendar year or, if the report is made on the basis of a fiscal year, within four and one-half months after the close of each fiscal year.
A domestic corporation which ceases to exercise its franchise is required to file a report on the date of such cessation, or at such other time as the Commissioner of Taxes may require, covering each year or period for which no report was theretofore filed. The report is required in any such case, whether the corporation continues in existence and thus remains subject to tax, or is dissolved and thus ceases to be subject to tax. However, in case the corporation continues in existence, the report is tentative and the tax will be adjusted on the next report due, either the next annual report or the final report.
A foreign corporation which ceases to do business in Vermont and thus ceases to be subject to tax, is required to file a report on the date of such cessation, or at such other time as the Commissioner of Taxes may require, covering each year or period for which no report was theretofore filed.
Example 1: A foreign corporation, reporting on the basis of a calendar year, begins to do business in Vermont on March 1, 1953 and continues to do business here throughout the balance of the year. The corporation is subject to an initial minimum franchise tax, prorated, for the privilege of doing business during the year 1953. On or before May 15, 1954 the corporation is required to file a report covering the 1953 operations. The tax on such report is measured as set forth in §§ 950, 951 of the law and represents payment for the privilege of doing business in 1954.
Example 2: A foreign corporation, reporting on the basis of a fiscal year ending November thirtieth begins to do business in Vermont on March 1, 1953 and continues to do business here throughout the balance of its fiscal year. The corporation is subject to a prorated minimum tax for the initial period of operations--March through November 1953. On or before April 15, 1954 the corporation is required to file a report based on the fiscal year ending November 30, 1953. The tax on such report is measured as set forth in §§ 950, 951 of the law and represents payment for the privilege of doing business during the fiscal year ending November 30, 1954.
The franchise tax is for all or any part of each calendar or fiscal year during which the taxpayer possesses a franchise or does business in Vermont. Accordingly, every taxpayer is required to pay a tax measured by its "entire net income" (or other applicable basis) covering operations up to the date on which it ceases to possess a franchise, if a domestic corporation, or ceases to do business in Vermont, if a foreign corporation.
A domestic corporation may cease to possess a franchise as a result of
A taxpayer may cease to be subject to tax under § 950 because of a change of classification resulting from a change in the nature of its activities or holdings and, in such event, is required to pay a tax measured by its "entire net income" (or other applicable basis) up to the date of such cessation. As to change of classification, see Article 107.
The taxpayer's "entire net income", or the portion thereof allocated to Vermont, is the primary measure for the computation of the franchise tax under § 950. The rate of the tax measured by "entire net income" is four per cent or a minimum of $ 25.00, whichever is greater. The portion of the "entire net income" allocated to Vermont is determined by the percentage of the total sales or charges for services performed, salaries and property in Vermont as against the total of these factors everywhere expressed as a percentage, equal weight given to each.
A--TAX MEASURED BY ENTIRE NET INCOME
"Entire net income" means total net income from all sources, and is presumed to be the same as the net income which the taxpayer is required to report to the United States Treasury Department for purposes of the Federal income tax imposed by the Internal Revenue Code of the United States in effect June 1, 1947, without deductions for losses sustained by the corporation in other years although such losses may be deductible under such code, plus any amount allowed as a deduction under such code as compensation for personal services rendered, or as interest, in excess of what the Commissioner of Taxes may determine to be reasonable. Ordinarily, the determination of the Director of Internal Revenue is followed with respect to net income but it is not binding on the Vermont Tax Department.
"Federal net income" is the starting point in the computation of "entire net income." After determining Federal net income, it must be adjusted as follows:
Recoveries with respect to war losses are required to be included in "entire net income", to the extent included in Federal net income, irrespective of whether the war losses were theretofore deducted in computing "entire net income."
In general, the method of accounting used in computing net income for Federal income tax purposes is used in computing "entire net income" for Vermont Franchise Tax purposes. However, whenever the Vermont Tax Department deems it necessary in order properly to reflect "entire net income" of the taxpayer, it may determine the year or period in which any item of income or deduction shall be included, without regard to the method of accounting used by the taxpayer.
Example: A taxpayer has a building, installation or construction contract covering a period in excess of one year. The taxpayer keeps its books so as to reflect the total income derived from the contract in the taxable year in which the contract is finally completed, and reports its Federal net income accordingly. The Vermont Tax Department may require that income from the contract be apportioned over the entire contract period, on the basis of percentage of completion in each year, or some other appropriate basis.
If the "entire net income" required to be reported under §§ 950, 951 of the Vermont Law is for a period other than the period covered by the taxpayer's Federal income tax return, its Federal net income is first adjusted in the manner net forth in Article 301, then divided by the number of calendar months or major parts thereof covered by the Federal income tax return, and the result multiplied by the number of calendar months or major parts thereof covered by the report under § 954 of the Vermont Law.
Example: A corporation was organized under the laws of another state in 1950 and carried on its business in such state. It began to do business in Vermont on March 1, 1953. It filed its return for Federal income tax purposes for the calendar year 1953 wherein its net income required to be reported was $ 70,000.00. In computing its "entire net income" for the period from March 1, 1953 to December 31, 1953, its Federal net income for the calendar year 1953 ($ 70,000.00) is first adjusted to conform to "entire net income" as defined in § 949 of the Vermont Law and is then divided by twelve and the result multiplied by ten. The method of computing "entire net income" set forth in the above example is, under similar circumstances, also applicable to corporations reporting on a fiscal year basis for Vermont Franchise Tax purposes.
In case it shall appear to the Vermont Tax Department that any agreement, understanding or arrangement exists between the taxpayer and any other corporation or any person or firm, whereby the activity, business or income of the taxpayer within the State is improperly or inaccurately reflected, the Vermont Tax Department is authorized to adjust items of income and or deductions and to eliminate assets in computing any allocation percentage, so as equitably to determine the tax.
Where (a) any taxpayer conducts its activity or business under any agreement, arrangement or understanding in such manner as either directly or indirectly to benefit its members or stockholders, or any of them, or any person or persons directly or indirectly interested in such activity or business, by entering into any transaction at more or less than a fair price which, but for such agreement, arrangement or understanding, might have been paid or received therefor, or (b) any taxpayer, a substantial portion of whose capital stock is owned either directly or indirectly by another corporation, enters into any transaction with such other corporation on such terms as to create an improper loss or improper net income, the Vermont Tax Department may include in the "entire net income" of the taxpayer the fair profits which, but for such agreement, arrangement or understanding, the taxpayer might have derived from such transaction.
B--MINIMUM TAX OF $ 25
In no event is the tax for any period less than $ 25, with the exception of the tax assessed for the initial period of operations which may be on a prorated basis.
If the taxpayer did not have a regular place of business outside Vermont during the period covered by the report, its allocation percentage is 100%; in other words, the taxpayer may not allocate any of its income outside Vermont.
A regular place of business is any bona fide office (other than a statutory office), factory, warehouse or other space which is regularly used by the taxpayer in carrying on its business. Where as a regular course of business, property of the taxpayer is stored by it in a public warehouse, until it is shipped to customers, such warehouse is considered a regular place of business of the taxpayer. Where as a regular course of business, raw material or partially finished goods of a taxpayer are delivered to an independent contractor to be converted, processed, finished or improved, and the finished goods remain in the possession of the independent contractor until shipped to customers, the plant of such independent contractor is considered a regular place of business of the taxpayer, see Article 403-B.
A taxpayer does not have a regular place of business outside the State solely by consigning goods to an independent factor outside the State for sale at the consignee's discretion.
If the taxpayer had a regular place of business outside Vermont during the period covered by the report, its allocation percentage is generally computed on the basis of its
The allocation percentage is computed by adding together the percentages of the taxpayer's real and tangible personal property, sales or receipts and payrolls within Vermont during the period covered by the report, and dividing the total of such percentages by three. However, if any one of the factors (property, receipts or payrolls) is missing, the other two percentages are added and the sum is divided by two, and if two of the factors are missing, the remaining percentage is the allocation percentage. (A factor is not missing merely because its numerator is zero, but it is missing if both its numerator and its denominator are zero).
Example: A taxpayer owns no real or tangible personal property and rents no real property either within or without the State. The property factor being missing, the allocation percentage may be computed by adding the percentages derived from the allocation of its sales or receipts and payrolls, and dividing the total by two.
If it appears that the allocation percentage computed on the basis of all or any of the property-sales-payroll factors does not properly reflect the activity, business or income of the taxpayer in Vermont, the Vermont Tax Department may adjust the allocation percentage, as set forth in Article 407.
The percentage of the taxpayer's real and tangible personal property within Vermont is determined by the average value of the property.
Tangible' personal property is within Vermont if, and so long as, it is physically situated or located here.
Property of the taxpayer held in Vermont by an agent, consignee or factor is (and property held outside Vermont by an agent, consignee or factor is not) situated or located within Vermont.
Property, while in transit from a point outside Vermont to a point in Vermont, or vice versa, does not have a fixed situs either within or without the State and, therefore, will not be deemed to be "situated" or "located" either within or without Vermont. Accordingly, such property while so in transit should be omitted from both the numerator and the denominator of the property factor. Property in transit from a point outside Vermont to another point outside Vermont is situated or located without Vermont. Property in transit from a point in Vermont to another point in Vermont is situated or located in Vermont. Property ceases to be in transit when it is delivered to or becomes subject to actual possession by the owner at the point of destination.
Example (1): A taxpayer, pursuant to the terms of a lease, pays the lessor $ 1,000.00 per month and at the end of the year pays the lessor one percent of its gross sales of $ 400,000.00. Its gross rent is $ 16,000.00.
Example (2): A taxpayer, pursuant to the terms of a lease, pays the lessor $ 24,000.00 per annum and also pays real estate taxes in the amount of $ 4,000.00 and interest on a mortgage in the amount of $ 2,000.00. Its gross rent is $ 30,000.00.
Example (3): A taxpayer enters into a 21-year lease of certain premises at a rental of $ 20,000.00 per annum and after the expiration of one year installs a new store front at a cost of $ 10,000.00 which reverts to the owner upon expiration of the lease. Its gross rent for the first year is $ 20,000.00. However, for subsequent years its gross rent is $ 20,500.00 ($ 20,000.00 annual rent plus 1/20th of $ 10,000.00, the cost of the improvement apportioned on the basis of the unexpired term of the lease).
Example (4): A taxpayer leases a parcel of vacant land for 40 years at an annual rental of $ 5,000.00 and erects thereon a building which costs $ 600,000.00. The value of the land is determined by multiplying the annual rent of $ 5,000.00 by eight, and the value of the building is determined in the same manner as if owned by the taxpayer.
"Gross Rent" does not include:
In exceptional cases use of the general method outlined above may result in inaccurate valuations. Accordingly, in such cases any other method which will properly reflect the value may be adopted by the Vermont Tax Department, either on its own motion or on request of a taxpayer. Such other method of valuation may not be used by a taxpayer until approved by the Vermont Tax Department. Any such request shall set forth full information with respect to the property, together with the basis for the valuation proposed by the taxpayer. Such other method once approved by the Vermont Tax Department may be used by the taxpayer in its reports for subsequent years until the facts upon which such other method is based are materially changed.
The percentage of the taxpayer's business receipts within Vermont is determined by
Receipts from the following are allocable to Vermont:
All such receipts of the period covered by the report (computed on the cash or accrual basis, in accordance with the method of accounting used in the computation of the taxpayer's "entire net income") must be taken into account.
An order for the purchase of tangible personal property is received when it reaches any officer, employee or other agent of the taxpayer authorized to solicit or receive the order on behalf of the taxpayer, irrespective of whether such agent has authority to make a binding acceptance of the order. Thus, an order mailed to the taxpayer's factory or office is received by the taxpayer when it is delivered; an order given to a salesman or other agent of the taxpayer is immediately received by the taxpayer.
If goods are sold by an independent factor outside Vermont, the taxpayer's receipts from the factor are allocable to Vermont if the goods were located in Vermont
Tangible personal property is appropriated to an order when it is set aside or earmarked for or associated with the order by the taxpayer, irrespective of whether title passes at the time of such appropriation.
When the property sold was located in Vermont, either at the time of the receipt of the order or at the time of the appropriation to the order, the receipt from the sale is allocated to Vermont; it is immaterial whether the order was received or accepted within or without Vermont or whether the appropriation of goods to the order took place within or without Vermont.
If a taxpayer received a lump sum in payment for services and also for materials or other property, the sum received must be apportioned on a reasonable basis. That part apportioned to services performed is includible in receipts from services performed, and that part apportioned to materials or other property is includible in receipts from sales. Full details must be submitted with the report.
Example 1: An order for a typewriter is given to the taxpayer's salesman in Pennsylvania and forwarded to the home office of the taxpayer in Illinois where it is accepted. The filling of the order from a stock of goods maintained in Vermont constitutes the appropriation to the order. The receipt from the sale is allocable to Vermont.
Example 2: An order for a custom-built machine is given to the taxpayer's salesman in Pennsylvania and forwarded to the home office of the taxpayer in Illinois where it is accepted. The machine is manufactured at the taxpayer's factory in Illinois and forwarded to the taxpayer's warehouse in Vermont for shipment to the customer in Pennsylvania. The manufacture of the machine in Illinois is an appropriation of the machine to the order, at a time when the machine is not located in Vermont. The receipt from the sale is not allocable to Vermont.
Example 3: An order for a machine is given the taxpayer's salesman in Pennsylvania and forwarded to the home office of the taxpayer in Illinois where it is accepted. The machine is later either purchased in Vermont by the taxpayer, or manufactured in Vermont by the taxpayer, and forwarded to the customer. The purchase or manufacture in Vermont constitutes the appropriation to the order. The receipt from the sale is allocable to Vermont.
An order is deemed received or accepted in Vermont if received or accepted by an employee, agent, agency or independent contractor chiefly situated at, connected with, by contract or otherwise, or sent out from a permanent or continuous place of business of the taxpayer within Vermont.
A permanent or continuous place of business maintained by the taxpayer outside Vermont is any bona fide office (other than a statutory office). factory, warehouse, or other space outside Vermont, at which the taxpayer is doing business in its own name in a regular and systematic manner, and which is continuously maintained, occupied and used by the taxpayer in carrying on its business through its regular employees regularly in attendance.
Tangible personal property purchased by the taxpayer and held by the seller for delivery as directed by the taxpayer, property in transit, property stored in a public warehouse, property in the possession of an independent contractor, and property in the possession of an independent factor for sale at his own discretion are not located at a permanent or continuous place of business maintained by the taxpayer.
If goods are sold by an independent factor outside Vermont, the taxpayer's receipts from the factor are allocable to Vermont, unless it can be shown
An order is accepted in Vermont if it becomes a contract binding on the taxpayer by reason of an act performed in Vermont.
Example 1: A taxpayer receives or accepts in Vermont an order for oranges which it previously had purchased from a grower and which are being held in the grower's warehouse in Florida, from where they are shipped to the customer. The receipt from the sale is allocable to Vermont.
Example 2: A taxpayer receives or accepts in Vermont an order for perfume which it owns and which is being held in the custom house in Boston, from where it is shipped to the customer. The receipt from the sale is allocable to Vermont.
Example 3: A taxpayer receives or accepts in Vermont an order which it fills from a stock of goods in a warehouse regularly maintained by it through its own employees in Michigan. The receipt from the sale is not allocable to Vermont.
Example 4: A taxpayer receives or accepts in Vermont an order for a tractor. If, after receipt of the order, the taxpayer purchases the tractor and has it shipped direct to its customer by the seller, the receipt from the sale is allocable to Vermont; but if the taxpayer manufactures the tractor in its factory outside Vermont, from which it is shipped to the customer, the receipt from the sale is not allocable to Vermont.
Example 5: A taxpayer receives or accepts in Vermont an order of a customer under which goods can be withdrawn from time to time, from a stock of goods kept by the taxpayer in a public warehouse outside Vermont. When goods are withdrawn to fill the order, the taxpayer is notified and it bills the customer. The receipt from the sale is allocable to Vermont.
Example 6: A taxpayer accepts an order through a salesman or officer working out of its Vermont office in another state, and fills such order from a stock of goods kept in a public warehouse outside Vermont. The receipt from the sale is allocable to Vermont.
Example 7: A taxpayer receives or accepts in Vermont an order for shirts which it fills from stock stored at the Pennsylvania plant of the independent contractor who manufactured the shirts for it and who ships the shirts to the customer. The receipt from the sale is allocable to Vermont.
Example 8: A taxpayer receives or accepts in Vermont an order for shirts which it fills from stock stored at the Pennsylvania plant of the independent contractor who manufactured the shirts for it. The taxpayer has an arrangement with the contractor under which space at the contractor's plant is leased to the taxpayer for the storage of the shirts manufactured for it and facilities are made available for the shipment of the shirts to the customer from the plant of such contractor by a shipping clerk employed by the taxpayer. The receipt from the sale is allocable to Vermont.
Receipts from services performed within Vermont are allocable to Vermont. All amounts received by the taxpayer in payment for such services are so allocable, irrespective of whether such services were performed by employees or agents of the taxpayer, by subcontractors, or by any other persons. It is immaterial where such amounts were payable or where they actually were received.
Commissions received by the taxpayer are allocated to Vermont if the services for which the commissions were paid were performed in Vermont. If the taxpayer's services for which commissions were paid were performed for the taxpayer by salesmen attached to or working out of a Vermont office of the taxpayer, the taxpayer's services will be deemed to have been performed in Vermont.
Example: The taxpayer is a Vermont sales agent of a Pennsylvania manufacturer and receives in Vermont an order from a New Jersey customer. The order is forwarded to the manufacturer which accepts it and fills it by shipment direct to the customer. The taxpayer's commission is allocable to Vermont.
Where a lump sum is received by the taxpayer in payment for services within and without Vermont, the amount attributable to services within Vermont is to be determined on the basis of the relative values of, or amounts of time spent in the performance of, such services within and without Vermont, or by some other reasonable method. Full details must be submitted with the taxpayer's report.
If a taxpayer receives a lump sum in payment for services and also for materials, or other property, the sum received must be apportioned on a reasonable basis. That part apportioned to services performed is includible in receipts from services, and that part apportioned to materials or other property is includible in receipts from sales. Full details must be submitted with the taxpayer's report.
Receipts from rentals of real and personal property situated in Vermont, and royalties from the use in Vermont of patents or copyrights, are allocable to Vermont.
Receipts from rentals include all amounts received directly or indirectly by the taxpayer for the use or occupation of property whether or not such property is owned by the taxpayer.
Receipts from royalties include all amounts received by the taxpayer for the use of patents or copyrights, whether or not such patents or copyrights were originally issued to or are owned by the taxpayer.
A patent or copyright is used in Vermont to the extent that activities thereunder are carried on in Vermont.
All business receipts earned by the taxpayer within Vermont are allocable to Vermont. Business receipts are not considered to have been earned by the taxpayer in Vermont solely by reason of the fact that they were payable in Vermont or actually were received in Vermont.
Receipts from sales of capital assets (property not held by the taxpayer for sale to customers in the regular course of business) are not business receipts. Receipts from the sale of real property held by the taxpayer as a dealer for sale to customers in the regular course of business are business receipts and are allocable to Vermont, if the real property was situated in Vermont. Receipts from sales of intangible personal property included in business capital, held by the taxpayer as a dealer for sale to customers in the regular course of business, are business receipts and are allocable to Vermont, if the sales were made in Vermont or through a regular place of business of the taxpayer in Vermont.
The percentage of the taxpayer's payroll allocable to Vermont is determined by dividing the wages, salaries and other personal service compensation of the taxpayer's employees (except general executive officers) within Vermont during the period covered by the report, by the total amount of compensation of all the taxpayer's employees (except general executive officers) during such period.
Wages, salaries and other compensation include all amounts paid in good faith for services to the taxpayer, but do not include amounts paid by the taxpayer which do not have in them the element of compensation for personal services actually rendered or to be rendered.
Wages, salaries and other compensation are computed on the cash or accrual basis, in accordance with the method of accounting used in the computation of the "entire net income" of the taxpayer.
Employees within Vermont include all employees regularly connected with or working out of an office or place of business of the taxpayer within Vermont, irrespective of where the services of such employees were performed. However, if the taxpayer establishes to the satisfaction of the Vermont Tax Department that, because a substantial part of its payroll was paid to employees attached to a Vermont office who performed a substantial part of their services outside Vermont, the computation of the payroll factor according to the general rule stated above would not produce an equitable result, the Vermont Tax Department may permit the payroll factor to be computed on the basis of the amount of compensation paid for services actually rendered within and without the State. On the other hand, wherever it appears that, because a substantial part of the taxpayer's payroll was paid to employees, attached to offices outside the State, who performed a substantial part of their services within the State, the computation of the payroll factor according to the general rule would not properly reflect the amount of the taxpayer's business done within Vermont by its employees, the Vermont Tax Department may require the payroll factor to be computed on the basis of the amount of compensation paid for services performed within and without the State. In any such case, where an employee performed services both within and without the State, the amount treated as compensation for services performed within the State will be deemed to be
Employees, whose wages, salaries and other personal service compensation are included in the computation of the payroll factor of the income allocation percentage, include every individual (except a general executive officer) where the relationship existing between the taxpayer and such individual is that of employer and employee.
Generally, the relationship of employer and employee exists when the taxpayer has the right to control and direct the individual not only as to the result to be accomplished by him but also as to the means by which such result is to be accomplished. If the relationship of employer and employee exists, the designation or description of the relationship, and the measure, method or designation of the compensation, are immaterial.
A director of a corporation is not an employee, and therefore, compensation paid to directors for acting as such should not be included in computing the payroll factor.
Personal service compensation paid to general executive officers of the taxpayer for acting as such should not be included in the computation of the payroll factor.
General executive officers include the chairman, president, vice-president, secretary, assistant secretary, treasurer, assistant treasurer, comptroller, and any other office, charged with and performing general executive duties of the corporation. An executive officer whose duties or services are restricted to territory either within or without the state is not a general executive officer.
Generally, the allocation formula hereinbefore described will result in a fair apportionment of the taxpayers' income within and without Vermont. However, experience in this and other states which impose similar franchise taxes has shown that due to the nature of certain businesses the formula may work hardships in some cases, and not do justice either to the taxpayer or to the State. Accordingly, provision is made whereby, in such cases, the Vermont Tax Department may authorize some other formula which will more accurately reflect the business activity within Vermont.
The statute provides that where it appears to the Vermont Tax Department that the allocation percentage, computed on the basis of the statutory formula does not properly reflect the activity, business or income of the taxpayer within Vermont, the Vermont Tax Department may adjust such allocation percentage. This may be done by:
A taxpayer may not vary the regular statutory formula without the prior consent of the Vermont Tax Department.
A taxpayer making application for an adjustment of its income allocation formula must file its report and compute its tax in accordance with the regular statutory formula. It should also attach a rider to the report setting forth full information on which its application is based, together with a computation of the tax which would be due under the proposed method.
Reports are required to be filed annually by the following:
Every foreign corporation which has an officer, agent or representative in Vermont is required to file reports, irrespective of whether it is doing business in Vermont so as to be subject to tax. As to a foreign corporation not doing business in the State so as to be subject to tax, this requirement applies only if it maintains in Vermont, with a fair degree of regularity and continuity, one or more officers, agents or representatives, between whom and the corporation there exists the relationship of employer and employee. (As to when the relationship of employer and employee exists between a corporation and its agents or representatives, see Art. 405.) A foreign corporation not doing business in the State is not required to file reports merely because one or more of its offices, agents or representatives reside or have an office in some other capacity in Vermont or come into the State at infrequent intervals in connection with isolated transactions of the corporation.
Every foreign corporation maintaining one or more officers, agents or representatives in Vermont, which claims that it is not doing business in Vermont so as to be subject to tax, is required to file Form 104-A setting forth full information as to its activities in Vermont, so that the Vermont Tax Department may ascertain whether it is subject to tax. If the Vermont Tax Department determines that the corporation is subject to tax, it will notify the corporation.
Example 1: A foreign corporation which claims that it is not doing business in Vemont is represented in Vermont by a sales agent who maintains an office and sales staff and who is paid by the corporation on a commission basis. The corporation is required to file a report on Form 104-A.
Example 2: A foreign corporation which claims that it is engaged wholly in interstate and foreign commerce has an export representative in Vermont. The corporation is required to file a report on Form 104-A.
Example 3: A foreign corporation sends goods to Vermont to be disposed of by an independent factor, but it does no business in Vermont and has no officer, agent or representative in Vermont. The corporation is not required to file a report.
If the amount of the net income of any taxpayer, as returned for Federal income tax purposes, is changed or corrected by a final determination of the Internal Revenue Department or other officer of the United States, or other competent authority, the taxpayer is required to report such changed or corrected net income and to concede the accuracy thereof or state wherein it is erroneous.
The ninety day deficiency notice provided by section 272(a) of the Internal Revenue Code is a final determination, unless a timely petition to redetermine the deficiency is filed in the Tax Court of the United States, in which event the judgment of the court of last resort affirming the deficiency, or the redetermination of the deficiency pursuant to the judgment of the court of last resort, is the final determination. The allowance by the Internal Revenue Department of a refund of any part of the tax shown on the taxpayer's return or of any deficiency thereafter assessed, whether such refund is made on the Department's own motion or pursuant to judgment of a court, is also a final determination.
Any taxpayer filing an amended return with the United States Treasury Department shall also file an amended report with the Vermont Tax Department.
Reports are required to be made on forms prescribed by the Vermont Tax Department. In the case of all taxpayers, annual reports are required to be filed on Form 104. In the case of all taxpayers entitled to an allocation, the allocation schedule is required to be completed. As to the form of combined reports, see Part VI. In the case of a foreign corporation which is not a taxpayer, but which has an officer, agent or representative within Vermont, an annual report is required to be filed on Form 104-A. Forms for reporting changes in Federal net income will be made available upon request.
The Vermont Tax Department may require any taxpayer to file such other reports and submit such further information as it may desire in the course of the administration of the provisions of Chapters 44 and 46.
Every report must be signed either by the president, vice-president, comptroller, secretary, treasurer or accounting officer of the taxpayer to the effect that the statements contained in the report are true. The person signing such a return shall be deemed to be the person subject to any pains and penalties of perjury prescribed by § 955 of the Vermont Law.
Annual report forms are supplied by the Vermont Tax Department, but failure to secure a form does not release any corporation from the obligation of making any report required by § 954.
The appropriate annual tax report must be filed on or before May fifteenth next succeeding the close of each calendar year of the corporation, or if the report is made on the basis of a fiscal year within four and one-half months after the close of each fiscal year.
The report of a change in Federal net income which results in a change in Vermont net income must be made on the taxpayer's next annual tax report, or, at the election of the taxpayer, within ninety days after the final determination of such change, or as otherwise required by the Vermont Tax Department.
When the due date of a report falls on Sunday or a legal holiday, the report may be filed on the following day.
A domestic corporation which ceases to exercise its franchise is required to file a report on the date of such cessation, or at such other time as the Vermont Tax Department may require, covering each year of period for which no report was theretofore filed. The report is required in any such case, whether the corporation continues in existence and thus remains subject to tax under § 950, or is dissolved and thus ceases to be subject to tax. However, in case the corporation continues in existence, the report is tentative and the tax will be adjusted on the next report due.
A foreign corporation which ceases to do business in Vermont and thus ceases to be subject to tax under § 950, is required to file a report on the date of such cessation, or at such other time as the Vermont Tax Department may require, covering each year or period for which no report was theretofore filed.
Any corporation which ceases to be subject to tax under § 950 because of a change of classification is required to file a report on the date of such change of classification, or at such other time as the Vermont Tax Department may require, covering each year or period for which no report was theretofore filed.
If a corporation taxed on the basis of a combined report, which ceases to be subject to tax under § 950 or which ceases to exercise its franchise but remains subject to tax, secures the permission of the Vermont Tax Department to be included in the next combined report, it need not file a separate report at the time of such cessation.
The Vermont Tax Department may grant a reasonable extension of time for filing reports whenever good cause exists. An application for an extension of time should be made prior to the due date of the report, and should be mailed or delivered to the Vermont Tax Department, Montpelier, Vermont. Interest will be charged at the rate of 6% per annum.
An extension of time for filing the annual tax report (Form 104) will be granted only on condition that a tentative report is filed and the estimated tax thereon is paid. A tentative report is required to be made in the form prescribed for the annual report.
Reports should be mailed or delivered to the Vemont Tax Department, Montpelier, Vermont.
An action may be brought at any time by the Attorney General in the name of the State of Vermont, at the instance of the Vermont Tax Department, to compel the filing of reports due under § 954 of the Vermont Law. Such action shall be returnable in the county where the taxpayer is domiciled, if a domestic corporation; and if a foreign corporation, the action shall be returnable to the Washington County Court in Montpelier.
Except in accordance with proper judicial order or as otherwise provided by law, it is unlawful for the Commissioner of Taxes, any officer or employee of the Vermont Tax Department, or any person who is permitted to inspect any report, or to whom any information contained in any report is furnished, to divulge or make known in any manner the amount of income or any particulars set forth or disclosed in any report under § 954 of the Vermont Law.
The provisions relating to secrecy of reports and information contained therein do not prohibit the delivery to a corporation, or its duly authorized representative, of a copy of any report filed by it, or inspection by the Attorney General, or other legal representative of the State of Vermont of the report of any corporation which shall bring an action to set aside or review the tax based thereon, or concerning which an action or proceeding has been recommended by the Commissioner of Taxes, or the Attorney General, or other legal representative of the State of Vermont, or instituted, in accordance with the provisions of the Vermont Law; or the exchange by the Vermont Tax Department with the taxing officials of any other state or of the Federal Government of such information contained in the reports filed under § 954 as it may consider proper, provided such state or the Federal Government grants like privileges to the State of Vermont and such information is to be used for tax purposes only.
The Vermont Tax Department may require or permit corporations to be taxed on a combined basis where a taxpayer owns or controls, directly or indirectly, substantially all the capital stock of one or more other taxpayers; or where substantially all the capital stock of a taxpayer is owned or controlled, directly or indirectly, by one or more other taxpayers or by interests which own or control, directly or indirectly, substantially all the capital stock of one or more other taxpayers. However, the Department cannot require (although it may permit) a foreign corporation not doing business in the State (which is not a taxpayer) to be included in a combined report, unless it deems such a report necessary, because of intercompany transactions or some agreement, understanding or arrangement in order properly to reflect the tax liability under § 950.
A corporation which is a member of a group taxed on the basis of a combined report, and which ceases to be subject to tax under Sec. 950, may be permitted to be included in the next combined report of the group, instead of paying a separate tax covering the period up to the date of such cessation. Application for permission to report in such manner should be mailed or delivered to the Vermont Tax Department, Montpelier, Vermont.
Where corporations are taxed on a combined basis, the tax will be determined as though the combined "entire net income" and capital of all the corporations covered by the report were those of one corporation.
In no event is the tax of any corporation included in a combined report less than $ 25.000. Thus, where a tax measured by "entire net income" (Art. 301), is computed on the basis of a combined report, each corporation included therein (other than the corporation paying the combined tax) is required to pay a minimum tax of $ 25.00.
Allocation is made on the basis of combined accounts from which intercompany items (including intercorporate receipts) are eliminated, see Part IV.
Intercompany business receipts (receipts by any corporation included in the combined report from any other corporation included in such report) are eliminated in computing the percentage of business receipts within Vermont.
In all cases where a combined report is required or permitted to be filed such report must be filed on Form 104, setting forth the information requested. In addition, a separate report on Form 104 is required to be filed each corporation included in the combined report, but such separate reports need not repeat any information which is contained in the combined report.
In any case where the test of stock ownership or control set forth above is met, a combined report may be permitted by the Vermont Tax Deparment, in determining whether, in a case where the test of stock ownership or control is met, the tax will be computed on the basis of a combined report, the Vermont Tax Department will consider various factors, including the following:
What constitutes "substantially all" the capital stock of a corporation, within the meaning of the foregoing provisions, will be determined on the basis of the facts in each case, but ordinarily the actual beneficial ownership or control of 95% or more of the issued and outstanding capital stock entitling the holders to vote for the election of directors or trustees will be considered as meeting the test laid down in the statute.
Where the tax is computed on the basis of a combined report, the Vermont Tax Department may assalss [assess] the entire amount of the tax, and all additional taxes computed on the basis of such report, against any one or more of the taxpayers covered by the report, in such proportions as the Department may determine, but every such taxpayer is liable for the entire tax.
If an application is filed for the revision of a tax computed on the basis of a combined report, the Vermont Tax Department may for cause reassess the tax ("resettle" or "adjust" the account) of every taxpayer covered by the combined report, and if a reassessment is made of the tax of any taxpayer which was not, but might have been, included in the combined report when the tax was originally assessed, the Vermont Tax Department may allow such taxpayer to be included in the combined report and reassess the tax accordingly.
On its report, the taxpayer computes the amount of tax which it believes payable under the law. The Vermont Tax Department thereupon "audits and states an account" for the tax; that is to say, the Department examines the report, computes the amount of tax payable under the law, and sends the taxpayer notice thereof, which constitutes the original assessment of the tax. If the Department fails to make an assessment within three years after the report was filed, it will be deemed to have assessed a tax in the amount shown on the report.
In case a taxpayer fails to file a report required by law, the Department is authorized to make an estimate of the tax.
The Department may "reaudit and restate the account"; that is to say, reexamine the report, recompute and reassess the tax, by sending notice thereof to the taxpayer
At any time before the expiration of the period within which the Department is authorized to recompute the tax and notify the taxpayer thereof, such period may be extended by written consent of the Department; and at any time before the expiration of any such extended period, the period may be further extended by written consent of the Department.
If the taxpayer's Federal net income for any period covered by a report under § 950 is changed or corrected by the Director of Internal Revenue or other competent Federal authority, the taxpayer is required to notify the Vermont Tax Department of such change or correction forthwith with pertinent figures after the final determination of such change or correction. At any time within three years after the time the return was due, or within one year of the date when notification to the Vermont Tax Department by the taxpayer takes place (provided such notification is received within five years of the due date of the return), the Department may "reaudit and restate the account" or recompute and reassess the tax, giving notice to the taxpayer thereof.
If the Vermont Tax Department reaudits and restates the account of any taxpayer (reporting on a cash basis), thereby altering the amount of tax due for such year under § 950, the deductions taken for taxes in reports filed for subsequent years will be adjusted to the extent necessary to reflect any increase or decrease resulting from such reaudit or restatement.
Example: A taxpayer's report based on the calendar year 1952 is reaudited and an additional tax under § 950 assessed for such year. The deduction taken for such taxes in computing the taxpayer's "entire net income" for the base year 1953 will be adjusted to reflect the increase in taxes for the base year 1952. This adjustment decreases the taxpayer's "entire net income" for the base year 1953 and, consequently, the tax for such year in the event that such tax was measured by net income. This will result in a decrease of the deduction claimed for taxes in taxpayer's report for the base year 1954 and an increase in taxpayer's "entire net income" for such base year. Similar adjustments will be made in reports for subsequent years alternately increasing and decreasing the deduction claimed for taxes where the taxes based on such subsequent reports are measured by net income.
If the account of any taxpayer reporting on an accrual basis restated, the deduction for taxes for the year in question will be adjusted accordingly.
When the Commissioner of Taxes discovers from the examination of the return or otherwise that the income of any taxpayer, or any portion thereof, has not been assessed, he may, at any time within three years after the time when the return was due, assess the same and give notice to the taxpayer of such assessment. The taxpayer shall thereupon have an opportunity, within thirty days, to confer with the Commissioner of Taxes as to the proposed assessment. The limitation of three years to the assessment of such tax or additional tax shall not apply to the assessment of additional taxes upon fraudulent returns. After the expiration of thirty days from such notification, the Commissioner of Taxes shall assess the income of such taxpayer, or any portion thereof, which he finds has not theretofore been assessed and shall give notice to the taxpayer so assessed, of the amount of the tax and interest and penalties if any. The amount thereof shall be due and payable within ten days from the date of such notice. The provisions of the law with respect to appeal shall apply to a tax so assessed. No additional tax amounting to less than $ 1.00 shall be assessed, nor shall any refund under $ 1.00 be authorized, unless requested.
When a taxpayer, who has failed to file a return or has filed an incorrect or insufficient return and has been notified by the Commissioner of Taxes of his delinquency, refuses or neglects within twenty days after such notice to file a proper return, or files a fraudulent return, the Commissioner of Taxes shall determine the income of such taxpayer according to his best information and belief and may increase the amount so determined by a penalty not to exceed fifty per cent of such amount.
The Commissioner of Taxes shall have power, upon making a record of his reasons therefore, to waive or reduce any of the additional taxes or interest which may have been imposed.
The taxpayer may file with the Vermont Tax Department, Montpelier, Vermont, an application for revision of his tax, at any time within three years after the original assessment of the tax, or if a reassessment has been made, within one year after such reassessment.
On filing an application for revision, the taxpayer may request an informal hearing before an authorized representative of the Department, at which it may submit such further information as it deems advisable. If such an informal hearing is requested, the Department will, as soon as practicable after such hearing, notify the taxpayer informally, by letter, of the action taken as a result thereof. If such action is satisfactory to the taxpayer, it may then withdraw its application for revision. If, however, the action of the Department following such an informal hearing is not satisfactory to the taxpayer, the application for revision will be set down for formal hearing, at which the taxpayer may submit legal evidence in support of its contentions. After the formal hearing, the Department will "resettle" or "readjust" the account; that is to say, will make a final determination of the tax and will notify the taxpayer thereof.
An application for revision may be made by a written document containing all the pertinent information and must be signed on behalf of the taxpayer by a duly authorized representative.
At any time within ninety days after service of notice of the Vermont Tax Department's final determination on an application for revision, and upon paying or securing payment of the tax, the taxpayer may institute a proceeding in the county court within and for the County of Washington or the county court in and for the county in which such taxpayer is domiciled, if a domestic corporation, to review such determination. Notice shall be served on the Commissioner of Taxes at least twelve days before the date of hearing. Thereupon, appropriate proceedings shall be had and the relief, if any, to which the taxpayer may be found entitled may be granted and any taxes, interest or penalties paid, found by the court to be illegally assessed, shall be ordered refunded to the taxpayer with interest at six per cent per annum for the time of payment, with costs, and judgment entered accordingly.
Notice of any assessment of tax ("audit and statement of account"), or reassessment of tax ("reaudit and restatement of account:), or any final determination on an application for revision ("resettlement" or "adjustment" of account), may be served on the taxpayer personally, or by registered mail addressed to the taxpayer at the post office address given in its last report under § 954, unless subsequent to the filing of its last report the Vermont Tax Department has received written notice of a change of address, in which event the notice will be sent to the new address shown on such notice.
The Vermont Tax Department is authorized to enter into a written agreement with any corporation, relating to the liability of such corporation in respect of any tax imposed by § 950 of the Vermont Law which agreement is final and conclusive.
The annual franchise tax may be paid to the Vermont Tax Department in full on or before the due date of the report. In cases of corporations operating on a calendar year basis the report is due on May 15th following the close of such calendar year; in cases of corporations operating on a fiscal year basis the report is due four and one-half months after the close of such fiscal year.
A taxpayer which ceases to exercise its franchise or to be subject to tax under § 950 must pay the entire tax for each year or period for which no report was theretofore filed on the date of such cessation or such other time as the Department may require.
If the taxpayer is notified by the Department that an additional tax is payable, such additional tax must be paid by the taxpayer within sixty days after service of such notice.
On application of any taxpayer before the due date of its report, the Department may grant a reasonable extension of time for payment of any tax, on such conditions as it deems just and proper. Ordinarily, an extension of time for the payment of any tax will be granted only on condition that interest be paid thereon, but in a proper case the Department may, upon application, waive, cancel or reduce the amount of such interest. In any event, a tentative report should be filed, on or before the ate when the regular report is due, and the tax estimated thereon paid.
The Department is authorized to compromise any taxes imposed by § 950 of the Vermont Law, if the taxpayer has been discharged in bankruptcy, or submits proof of insolvency, but the amount payable in compromise shall in no event be less than the amount, if any, deemed by the Commissioner of Taxes to be recoverable through legal proceedings.
An action may be brought at any time by the Attorney General, in the name of the State of Vermont, at the instance of the Commissioner of Taxes, to recover the amount of any taxes, penalties and interest due under Chapters 44 and 46 of the Vermont Law.
Every foreign corporation subject to the provisions of § 950 of the Vermont Law, is required to file with the Vermont Secretary of State a certificate of designation in its corporate name, signed and acknowledged by its president, or a vice-president, or its secretary, or treasurer, under its corporation seal, designating the Secretary of State as its agent upon whom process in any action provided by §§ 970 and 971 may be served within the State, and setting forth an address to which the Secretary of State shall mail a copy of any such process which may be served upon him. When a certificate of designation has been filed by such process, thereafter served upon him, to the address set forth in such certificate. Any such corporation, from time to time, may change the address to which the Secretary of State is directed to mail copies of process, by filing the office of the Secretary of State a certificate to that effect executed, signed and acknowledged in like manner as a certificate of designation as herein provided. Service of process upon any such corporation, or upon any corporation having a certificate of authority under Chapter 265 of the Vermont Law, in any action commenced at any time pursuant to the provisions of §§ 970 and 971, may be made either by personally delivering to and leaving with the Secretary of State, or Deputy Secretary of State, duplicate copies thereof at this office in the City of Montpelier, in which event the Secretary of State will forthwith send by registered mail one of such copies to the corporation at the address designated by it or at its last known office address within or without the State, or to any person designated by the corporation to receive such notification.
The amount of the liability of a transferee of property of a taxpayer, in respect of the tax, penalty and interest imposed upon the taxpayer by § 950, is required to be audited, reaudited, determined, paid and collected in the same manner and subject to the same provisions of law as in the case of the taxpayer concerned. Notice of such liability is sufficient if mailed to the transferee at his last known address. The term "transferee" includes an heir, legatee, devisee and distributee.
If the amount of tax found due as computed by the Vermont Tax Department shall be less than the amount theretofore paid, the excess shall be refunded and interest shall be added at the rate of one-half of one per cent per month, or fraction thereof, from the due date of the return or from the date of payment, whichever is later. The Department will so certify to the Auditor of Accounts who will issue his warrant in favor of the taxpayer entitled to receive the same.
A domestic corporation may dissolve its charter or articles of association by filing with the Secretary of State and the Commissioner of Taxes a sworn statement, setting forth that the obligations of such corporation to its creditors have been discharged by operation of law or otherwise; that all of the assets of such corporation remaining after the discharge of its obligations to creditors, have been apportioned among its stockholders or members according to their respective rights; that claims or demands do not exist against such corporation, and that such corporation is not the owner of real or personal estate located within this State or elsewhere. Such statement shall be subscribed and sworn to by the president and secretary, or any two directors or trustees of such corporation elected at the last regular election of officers by such corporation, and shall definitely set forth the official position of each person subscribing the same.
When a foreign corporation ceases to do business in this State, it shall execute a certificate under its corporate seal stating the exact date whereon it so ceased to do business. Such certificate, when filed with the Secretary of State; shall thereupon revoke the certificate issued to such corporation pursuant to the provisions hereof.
10-007 Code Vt. R. 10-060-007-X