Stowe merchants tell committee 2% local-option tax would hurt small businesses and deter visitors

Three Stowe merchants told the Government Operations & Military Affairs committee that a proposed 2% local-option tax in H.954 would harm small retail businesses and deter the tourists that local commerce depends on.

Megan Ocolita, owner of Northwood Gallery, said the gallery relies on tourists and on sales to Vermont artists and that raising the town tax to 2% would make Stowe feel less accessible to locals and reduce off-season sales. "Implementing an 8% tax on people who are funding our tourist-dependent economy seems counterintuitive to us," she said, arguing the town should "find another avenue to pull the money they need" such as taxing second homes or Airbnbs.

Nancy Teague, co-owner of Once Upon a Time Toys, opposed the increase on economic and equity grounds. Drawing on tables she said she distributed, Teague noted Vermont and Rhode Island are tied at 7% sales tax among New England states and warned that increasing a local option would be regressive and would push price-sensitive shoppers to neighboring towns or online retailers. "Sales tax is one of the most regressive [taxes]," she said, and said many of her long-standing customers notice higher register prices and respond by spending less.

Kimberly, owner of Tangerine and Olive, told the committee turnout at town meeting on the retail and rooms/meals questions was limited (she cited figures of 777 and 778 votes) compared with Stowe’s 2020 population of 5,223, and she cited occupancy data from the Stowe Area Association that showed week-over-week declines (she said the week of June 7 was down about 31% and the week of June 14 down about 28% from the prior year). Kimberly argued those trends make a near-term tax increase risky for a tourism-dependent local economy and suggested the town consider taxing short-term rentals instead.

Committee members asked a few clarifying questions; witnesses reiterated concerns about narrow retail margins, credit-card fees increasing when taxes are higher, and competition from online sellers and nearby towns. The committee did not take a vote on H.954 at the hearing; the chair thanked the witnesses and recessed for lunch to prepare for the floor.

The testimonies combined economic data points (local turnout numbers, occupancy trends, comparative state tax tables) with personal business experience to argue the proposed local-option tax would disproportionately burden local shoppers and small merchants, particularly in shoulder seasons when tourist spending is lower.