The Vermont House has advanced legislation to raise $35 million in new taxes by limiting deductions from the state income tax.
The revenue bill is seen as a key piece of the budget puzzle — including cuts and the use of one-time money — in which lawmakers are trying to close a projected gap of $113 million between 2016 revenues and spending demands.
Under the bill, income tax deductions will be capped at 2.5 times the standard deduction.
The revenue bill won preliminary approval on a 76-67 vote Thursday and will be up for final approval Friday before heading to the Senate.
The House is expected to work into the evening on its budget plan.
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