On the 2026 Town Meeting Ballot for the Town of Milton
What Is The Proposed Local Option Tax?
Local Option Tax (LOT) is a 1% tax that municipalities may assess on sales, meals, alcoholic beverages and rooms.
1% is added to what is already collected by the State of Vermont.
Milton would receive 75% of the tax collected, and the State receives 25%.
LOT is one way for the Town to diversify revenue sources to rely less heavily on property taxes for Capital and Infrastructure projects. It is important to note that the LOT is not intended to reduce current property tax payments, but rather to reduce the pressure to increase property taxes in future years.
Public Information Meeting
On Thursday, February 12, 2026, the Milton Selectboard held a Special Meeting with a public forum to discuss the proposed 1% Local Option Tax, which is on Milton's 2026 Town Meeting Ballot. View the full recording of that discussion.
What Are The Benefits to Milton?
Reduces Pressure on Property Taxes – Helps offset the cost of maintaining infrastructure without shifting the full burden onto homeowners.
Keeps Dollars in Milton – Funds raised stay in Milton and can only be used for Town purposes.
Captures Revenue from Non-Residents – Visitors from surrounding towns regularly shop, dine, and purchase goods in Milton. Those visitors use Milton’s roads, parking, and public infrastructure, and a Local Option Tax ensures they help contribute to those costs.
Supports Long-Term Planning & Stability – Provides a more predictable revenue stream for capital planning. Helps the Town plan ahead for growth, infrastructure replacement, and regulatory requirements.
The following items of note are subject to sales tax and are therefore subject to the Local Option Tax:
Cellphone service
Cable TV service
Commercial heating fuels, and on relevant equipment sales, leases and parts
How Would This Impact Property Taxes?
Introducing another source of revenue reduces the burden on property owners by reducing the amount of funds that must be raised by property taxes.
Who Pays This Tax?
A local option tax is shared by visitors, shoppers, commuters and residents.
Residents of nearby towns, such as Fairfax, Georgia, and Westford, frequently shop and dine in Milton, and many are employed by Milton businesses. These visitors use our infrastructure daily but do not currently contribute to the cost of development or maintenance. The LOT provides an opportunity for Milton to earn revenue from these visitors and offset the burden placed solely on property owners.
Milton residents contribute only when making taxable purchases within town limits (dining out, alcohol, taxable retail items) or when taxable online purchases are delivered to their addresses.
How Much Revenue Will Come from Visitors Vs. Residents?
This number has proven difficult to calculate with any accuracy or reliability because specific data is not available to the Town. However, data is available to indicate the potential traffic to the Town from neighboring communities, which can be an indicator of potential distribution of revenue from both sales and meals.
Milton serves as a regional retail hub. According to Department of Labor statistics, Milton has 30 retail trade establishments, which is more than double the number in Fairfax (13) and significantly higher than Georgia (4) or Westford (5). This retail footprint makes it highly likely that residents from these surrounding communities already utilize Milton for their shopping needs.
In addition, Milton benefits from US Route 7, one of the busiest roads in Vermont, which carries approximately 10,000 to 14,000 vehicles per day depending on the segment. This steady flow of regional traffic increases the likelihood that non-residents contribute to the local economy when they stop to shop or dine, thereby helping to fund Milton's infrastructure through the LOT.
How Much Revenue Could Be Generated for Milton?
Based on Vermont Department of Taxes data (FY23 & FY24 average) and comparable communities, a local tax on sales, meals, and alcohol in Milton could generate approximately $581,594 or more per year. This revenue grows as the local economy grows, and it reduces the burden on property owners by reducing the amount of funds that must be raised by property taxes.
State Tax
Local Option Tax
Total Tax
Sales Tax
6%
1%
7%
Meals Tax
9%
1%
10%
Alcoholic Beverages
10%
1%
11%
Rooms Tax
9%
1%
10%
Sales: 1% of $63,985,226 = $639,852
Alcohol and Meals: 1% of $13,560,715 = $135,607
Total Revenue Generated: $775,459
Milton’s Portion (75%): $581,594
How Will This Revenue Be Used?
Revenue generated by the LOT is a potential funding source for capital improvements that residents rely on every day, including:
Town facilities, including recreation and public buildings
Vehicles and equipment for the police, fire, rescue, and public works
Road paving and transportation infrastructure
Stormwater infrastructure required to meet state regulations and protect local waterways
The LOT can also help reduce the burden of future large one-time costs. For example, the Town of Milton has been working toward the development of a Multi-Generational Recreation Facility for many years. A portion of the expense to build and/or maintain such a facility could be funded by LOT revenue. Additionally, our Rescue department has been growing over the last few years to meet our growing community needs. The Rescue building is in need of major renovations, or possibly a new facility, in the near future. LOT revenue could be used in place of a bond to fund such projects.
How Would The LOT Change How Major Projects Are Funded?
Under the current financial model, major projects, such as much-needed upgrades or a new facility for the Rescue department, can only be funded through bonding. Bonding requires raising property taxes to repay the debt along with added interest costs. The LOT offers an alternative funding source that could be used in place of a bond for these types of large, one-time capital expenses.
The same is true for a multi-generational recreation facility. That idea has been discussed in Milton for years. The local option tax could be the most feasible way to make it a reality. If the community ultimately decides it wants to move forward without a local option tax, the current funding structure would place the full cost on property taxpayers. That could delay the project further or potentially eliminate it altogether due to bonding capacity limits or the overall inability to raise property taxes to the level needed to cover the cost.
What Other Vermont Cities And Towns Have A Local Option Tax?
Milton residents already pay a Local Option Tax when shopping or dining in neighboring municipalities - but those towns receive the benefit of the revenue, not Milton. Adopting a Local Option Tax allows Milton to benefit in the same way as surrounding communities.
Over 30 other municipalities in Vermont have adopted the Local Option Tax, including:
St. Albans Town used LOT revenue to fund a new $2.4M Public Works Facility.
Colchester used the revenue on a $15.907M Recreation Center, which included a $9.0M cash payment funded by LOT revenue and up to roughly $6.907M financed and repaid by LOT revenue.
Essex Junction used the revenue for several projects, including rebranding ($40K), strategic planning ($30K), signage ($14.4K), stormwater match ($28K), and planned transfers.
How Was This Proposal Developed And Shared With The Public?
The concept of adopting the Local Option Tax has been considered for several years and was part of the charter change recommendation back in 2021. The current proposal was brought forward openly and has been discussed at multiple public Selectboard meetings, one of which included a dedicated public forum. The Selectboard and Town staff are committed to a transparent process, allowing for public debate and weighing of information before voters make the final decision. The inclusion of this item on the Town Meeting Ballot ensures that residents have the ultimate authority to decide if this tool makes sense for the community.
When Would This Take Effect, If It Passes?
Voting will take place on Town Meeting Day: Tuesday, March 3, 2026. For more information on the 2026 Town Meeting election, visit miltonvt.gov/vote.
If approved by voters, the earliest date that the LOT would go into effect is July 1, 2026.
The first revenue payment to the Town of Milton would be received in October of 2026.