Meetings
Transcript: Select text below to play or share a clip
[Bob Smith (industry representative)]: Did you tell anyone else you're You're alive.
[Sen. Richard Westman (Chair)]: This is Senate Transportation. We're back taking testimony on the miscellaneous DMV bill. And the two of you could introduce yourself.
[Matt Fota (Meadow Hill)]: Sure. My name is Matt Fota. I'm with the firm of Meadow Hill. I represent several different clients that have interest in this legislation. The Vermont Fuel Association who buy trailers, the Vermont Fuel Association sells trailers and RVs, and the Vermont Retail and Grocers Association, some of their members which also buy trailers.
[Bob Smith (industry representative)]: I'm Bill Smith, an office in Northfield, Vermont. I represent the North Truck and Bus Association and Vermont Road Retail, London Dealers Association. And we have a lot of fair numbers overlap on our numbers between Matt and I. K.
[Sen. Richard Westman (Chair)]: There are a couple of sections in here that you're So, yeah, if it's
[Matt Fota (Meadow Hill)]: it's the chair, and I just call out section five for for clarification if we go to one way system when it comes to our tractor trailer trucks that have trailers behind them. I may be reading this right, wrong. Legislative council put I will even close it. Not have a plate on the front, but have a plate on the back of the tractor. I just need clarification so I can tell, whatever the decision is. If we're going to one plate for commercial motor vehicles and it's a tractor, in that scenario, do we put the plate on the back where you can't see it or do we put it on the front where you can't? But something to
[Damian Leonard (Legislative Counsel)]: be at least I need
[Matt Fota (Meadow Hill)]: to provide guidance to my members depending on whatever they sit you have.
[Sen. Richard Westman (Chair)]: Think we're going to have to ask DMD what they were proposing. I can't, personally can't imagine them, if you got it on the cab and it the only place to put the plate where you can see it's
[Matt Fota (Meadow Hill)]: the front. It's it's correct, Jared, except when you're when you're not hauling a trailer, we still
[Sen. Richard Westman (Chair)]: Well, hopefully, you're hauling most of the time. Hopefully. You aren't making money if you aren't
[Bob Smith (industry representative)]: You understand the situation that's happened.
[Matt Fota (Meadow Hill)]: With regards to the person you used to hacks, again, in the max hacks, just to and I understand the reasoning. You're gonna collect more money this way. If you talk to Pete's RVs or Spruce at Nicholson's or Lucky down in South Burlington, whether they're selling a FITNWheel or a tow long RV or a trailer or a or a trailer that is used for commerce, you're gonna find that 85, 90% of those are over the 41,000 and change that would essentially at 6% get you that three four eight six number. This would affect almost their entire inventory. I know the implementation date is 07/01/2026, which seems like five months out, but if this can come to law, we won't know for sure if we can come to until thirty days. You do have people that make purchases based on and get a loan from a bank. That there's gonna be a there's gonna just like we had with the max tax, it changed two weeks before January 1, where we had some people sort of caught in between, where they had sold a vehicle, paid the tax, and then realized after the fact that, in fact, it had increased because it was on tear weight, not on the delivered weight, you're experience that same thing. I don't know if there's a conversation about raising the max. I understand the reasoning for putting 6% on fifth wheels and tow trailers and trailers, but some of these trailers will go for, well, a propane trailer that carries 9,000 gallons of propane, costs about $120,000 just the trailer. Knock it back, knock it down. Most trailers are going to be over that amount and would now pay 6% rather than $2,486 That is going to be an economic cost for people that make a decision whether to buy themselves a fifth wheel or a tow long RV style trailer, or whether they're buying trailers so they can haul goods and products around the state. And I know, Sanders, you know this, even you're trying to raise money, but because there's going to be a cost.
[Bob Smith (industry representative)]: Mhmm.
[Matt Fota (Meadow Hill)]: It's very supportive of the last the one year for nondomiciled CDLs.
[Bob Smith (industry representative)]: Yes. Pandemic. Like, is it just the ED of just the trailer, or is it DE of actually, 16, or the erosion, sorry, about the addition of trailers?
[Matt Fota (Meadow Hill)]: Trailers now are not qualifying for the max tax heavy trailers. Anything over, if it's 2,486
[Bob Smith (industry representative)]: at 6%,
[Matt Fota (Meadow Hill)]: that's your purchase prices, looking at my numbers guy, Mike Smith, is about $41,000 and change. When I call around and ask Lucky's, I ask Pete's, I ask Bruce. I said, How many trailers or RVs or RVs or fifth wheels are under that amount? They're like 10%. It's good to have inventory. You walk in and buy a fifth wheel from Bruce, and he's a Montpelier, or you buy a trailer from Lucky's over in South Burlington, your tax has increased as of July 1. Right.
[Bob Smith (industry representative)]: But you're okay with the, I don't know if you have it in front of you, but the D part of that, accent codes, which is clarifying some of the shipping weight. They're not concerned about that part. It's really just the addition of the gray lamps.
[Matt Fota (Meadow Hill)]: The concern that we had, and I heard it from both sides, which is those selling it and those purchasing it. So there are certainly dealers on the dealer side of my my life, who did not hear about that or did not learn. We were told two weeks prior to when it was the the interpretation was changed. It was gonna be on a tearaway, passing the cab, the fluid inside, and not on the delivery weight. So you think about it, an F three fifty, a large working truck in which the cabin chassis is great, but you need to build you need to put a safe bed, you need to put a crane, you're moving propane tanks, you need to put dumb body, you know, all of a sudden, you're over that weight. But but because it's on delivered weight, there were some orders that took effect that didn't anticipate that would happen. And so either the dealer got caught crossways where they had charged the max tax, the lower amount, and then found out later, mhmm. Actually, you didn't read the the change on January 1. Now you pay now you're pulling us a little bit more. Or they're informing their customer, hey. This I know you had this on orders for six months, and you thought this was what you're gonna pay, but we just got this notice from the DMV. You no longer qualify for the max tax. You're now gonna pay 6 percent of the purchase price. These things happen when have changes, and we love long. If they're too long, we forget we even that we're implementing them. They're too short, it happens abruptly for some people. I don't know what the magic number was, but Sure. Maybe we have some lead time because these trucks, you know, you don't just walk up to a lot and buy them with these companies.
[Bob Smith (industry representative)]: They're okay with the change, but it's just timing. Timing was unfortunate. Okay. I guess
[Sen. Richard Westman (Chair)]: And you've got duration?
[Matt Fota (Meadow Hill)]: Yep. K. I guess I probably I have
[Bob Smith (industry representative)]: a question, a clarification, And I I think that's under Perchlik has proposed this. So is the intent of this to remove the cap on tax on trailers, kind of whatever they may be. I mean, if it's a tractor trailer, trailer body that's purchased at Lucky's Trailer Sales that would no longer have a cap on it. Would that be how I should read this? I
[Sen. Richard Westman (Chair)]: think this is miscellaneous DMV and is being presented to us by
[Bob Smith (industry representative)]: I was informed by what
[Sen. Richard Westman (Chair)]: by DMV itself. So I think at this point, we'll ask the commissioner for
[Bob Smith (industry representative)]: a comment. Thank you for the clarification. Sure. Can you repeat that? Well, our is the under is Is this sale, let's call them heavy trailers just so we can say, let's focus on the trucking part of that, the way trucking bus numbers. Is the sale of the trailer going to no longer be subject to the cap at roughly 41,000 sale price. So if a trailer costs $80,000 it's today, it would pay $222,300 dollars, but now it's gonna be more or not?
[Damian Leonard (Legislative Counsel)]: So that may be the the side conversation seems further discussed because we're trying to clarify the it wasn't so much trailers we're having trouble with. It was the vehicle side.
[Sen. Richard Westman (Chair)]: Now, I want that
[Damian Leonard (Legislative Counsel)]: to be the unintended consequence calling the crosshairs.
[Bob Smith (industry representative)]: Because I hear what
[Damian Leonard (Legislative Counsel)]: you're saying on the where you're talking, you know, toward a thousand dollar propane trailer or or equipment trailer. That would be the the side conversation. We're trying to follow what was already written in statute previously. Just clarifying verbiage that's the the unloaded weight. How we I guess this conversation around trailers develops.
[Bob Smith (industry representative)]: Pretty much sure, but Oh, I understand. Okay. So if okay. So mister Terry, I guess I would like to know your timeline with this bill and if we could not close out section 16 in the short term to the commissioner and and perhaps Matt and I can
[Sen. Richard Westman (Chair)]: We're What what's your We're we're still in the time frame of working this. We do have deadlines to get this moving by but it isn't this week. So the quicker you can, figure it out with Yep. The department, we're We will work on
[Bob Smith (industry representative)]: that right right away, sir. So But having said that, I guess that's kind of the what's my main focus of the K. Review of the bill, and thank you for your time.
[Matt Fota (Meadow Hill)]: Perfect. Thank you.
[Sen. Richard Westman (Chair)]: Thank you, Bob.
[Bob Smith (industry representative)]: We're quiet in here today. Yeah. I might have heard more comments on this plate covered one, but you're what now, Stella? For me, I thought a map dealt with the one plate on the front of
[Sen. Richard Westman (Chair)]: the tractor trailer. Yeah. Which put that trailer on the back of that cab. You can't see very much.
[Bob Smith (industry representative)]: Yeah. I guess I was already saying trailer has a plate. Yeah. I know. Yeah. Yes.
[Sen. Richard Westman (Chair)]: Yeah. Yeah. It's It's different. Yeah. It's different. It's different. It's it is
[Bob Smith (industry representative)]: on
[Sen. Richard Westman (Chair)]: the
[Bob Smith (industry representative)]: cab. The
[Sen. Richard Westman (Chair)]: trailer might be owned by someone other than point of driving the truck.
[Bob Smith (industry representative)]: Do they put a, that's a good question. Can I ask you? Sure. Does a trucker, when he picks up a trailer, is that trailer on his trip permit associated with his cab somehow?
[Damian Leonard (Legislative Counsel)]: In other words
[Bob Smith (industry representative)]: I think internally within the business it is, but as far as, like, you know, people have a, like, a state permit You know
[Matt Fota (Meadow Hill)]: what I'm saying? The overweight permit?
[Bob Smith (industry representative)]: No. Just, if someone's if law enforcement or just a citizen will drive down the road, say you got an accident, you had you had the trailer number plate. Yeah. And then you call that in. Will they tell you who was towing that thing? You know what I mean? I know your question. They're gonna tell you who the owner of it is. And then if that's wrong the trailer. Who owns the trailer? That's what we're find out about. And they think they to do some homework and figure out who's picked it up. Right. Yep.
[Sen. Richard Westman (Chair)]: We've got another question. I mean, that's
[Bob Smith (industry representative)]: Were you here listening we were talking about stockages, the notch? Danielle, don't know if you've looked at that or the bill, but we had one was a question about I love the notch questions. Yeah. So the so I remember testimony where some drivers are told by the trucking company, like, you have to go this route. So they're saying, that's that's the route I went. Or they're calling their GPS or they're we're programmed by the company saying, you shall go this way because we know it's the quickest way and we wanna I I don't think it's that organized. I think it's the and the driver, and that's why they end up there. And it's not our folks here. It's from I can tell you that. So yeah. So you're not remote there. You don't your members don't care about that. They're not the ones. We're not you know, if someone's still gonna be on that end of the knucklehead spectrum, god help them. Right.
[Matt Fota (Meadow Hill)]: Okay. That's Oh,
[Sen. Richard Westman (Chair)]: that was really knucklehead spectrum. Mean, that's Well, I've always I've always had somebody say that and testimony in a while.
[Bob Smith (industry representative)]: Not you. You know, chair, we lost Logan, but I would I wondered if I if when
[Sen. Richard Westman (Chair)]: you looked at the physical stuff that he thought about that trailer part. I I well, we noticed that he didn't look like Logan when I turned to Brandon. Yeah.
[Damian Leonard (Legislative Counsel)]: Sorry about that. I can tell you, Damian Leonard, legislative council, I can tell you Logan and I were discussing the trailer section this morning, but I'm not sure how far he's gotten into it. We were just discussing some of the implications with the max tax going away, potentially on certain vehicles. There are a couple other things, that I should highlight. Right now, there seems to be a conflict between the purchase and use tax language proposed and the sales and use tax language, which is tied to gross, gross vehicle weight rating for apportioned vehicles. And I'm worried that we may we may potentially have some crossover where it's not clear what tax applies to a vehicle, which could create issues. And this is something that came up, we were looking into this over the weekend trying to put together some numbers on this and as we look deeper into the regulations, we realize that there may be some clarification that needs to happen about, for example, elsewhere in sales or purchase and use tax, says trailers for rental of trailers up to 3,000 pounds If we're doing purchase and use of trailers that are not being rented, they're being actually purchased, are we going up to a certain weight limit or are we capturing all of them? Are we excluding abortion trailers Are we capturing them? So they're just it's the nitty gritty details we'll wanna clarify. The other question I have is the sales and uses buried in the Department of Taxes Regulation, and I don't know the extent to which it's reflective of current practices. In the statute itself, it's silent. And so some of this I know is to try to bring it in line with current practice. So we we may wanna get a little more testimony on some of the details just so we can make sure we don't leave someone in a sort of catch 22 where you can read the tax law so that they're subject to both. And then you have to figure out, you know, which one is appropriate so they don't get double taxed. But I can't speak to the actual fiscal impact.
[Bob Smith (industry representative)]: All
[Sen. Richard Westman (Chair)]: right. I think, Megan, if you could take us offline, I think we're done for the day. I rescheduled Logan to come back
[Bob Smith (industry representative)]: and