State of Vermont

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Secretary of State

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     Vermont law places registration and financial disclosure obligations upon those who lobby and upon those who employ lobbyists.

     These laws underwent major revision in 1993, and a 5-percent tax on lobbying was instituted by legislation passed in 1997, effective as of the first of this year and payable on March 25.

     The basic law, 2 V.S.A. § 261-268, as extensively revised in 1993, has withstood a test before the Vermont Supreme Court, and a challenge of the tax provision is pending.

     The Secretary of State's Office recently has received inquiries about what exactly constitutes a taxable lobbying expenditure.

     The issue has been somewhat academic in the past. When in doubt about an expenditure, there was little incentive for a lobbyist or an employer not to report it.

     Now, of course, those doubts cost money.

     Nothing has changed, however, about the definition of lobbying. The essential characteristic defining an act of lobbying is still what the law calls the "purpose" of the act.

     If the purpose of an act is to influence administrative or legislative action, the act is an act of lobbying.

     Obviously, when the lobbyist is an attorney and the employer is a client, information about the purpose of the action may be protected by attorney-client privilege.

     Nevertheless, the law doesn't distinguish between lawyers and non-lawyers in this regard, and it is possible during a single day to represent a law office client in one instance without lobbying and in another as a lobbyist.

     The Secretary of State's Office has the responsibility to receive the filings, but the Attorney General's Office is charged with enforcement of the filing requirement.

     The law directs the Secretary of State to collect the tax and forward it to the State Treasurer, where it will be placed in the interest-bearing Vermont Campaign Fund, to finance Vermont's new campaign finance law. Delinquencies are to be turned over to the Tax Department.

     This is a law that requires self-reporting, involves subjective decisions, and relies largely on the good faith of the reporting party.

     We understand that there will be some frustrations in dealing with a filing requirement in which so much is left to the judgment of the filer. Our office will attempt to offer what guidance we can.