07/21/2026
Greetings Cambridge Community Members,
This post is being shared on behalf of the Cambridge Select Board and the Cambridge Local Option Tax Advisory Committee.
Since October 2025, the Cambridge Select Board has had the Advisory Committee researching the Local Option Tax and what it could mean for Cambridge.
Many of you have completed the community survey, and we thank you for your time and comments.
If you still have questions, or concerns you can email us at [email protected].
We'd also like to share some information that may be helpful.
We will be providing additional information and FAQs in the weeks ahead.
Why Consider a Local Option Tax (LOT)?
Right now, Cambridge relies on property taxes to pay for most town services, which puts a lot of pressure on homeowners. A Local Option Tax would help ease that burden.
The LOT would also be paid by the thousands of tourists and visitors who come to our town, so some of the tax burden would be shared with non-residents.
At present, 59 towns in Vermont have implemented one or more versions of the LOT.
For LOT details, including which communities have adopted a LOT and what kind, visit the State of Vermont's page:
https://tax.vermont.gov/business/local-option-tax
What Would the LOT Apply To?
A Local Option Tax can only be applied to categories already defined by the State of Vermont: rooms, prepared meals, served alcoholic beverages, and retail purchases already subject to sales tax.
Please note, the LOT would not apply to groceries.
What Can We Reasonably Expect to Generate in LOT Revenue?
The estimates below use 2025 VT Department of Taxes data on taxable sales in Cambridge. They show the what the town's share of a 1% LOT could be:
Rooms/short-term rentals: $77,162
Meals & Alcohol: $100,462
Retail Sales: $279,503
All eligible categories: $457,127
Note:
The state collects the local options tax and sends 75% back to the town.
25% of LOT collected is deposited into the Payment in Lieu of Taxes (PILOT) Fund at the state level.
Money in the PILOT Fund is used to compensate municipalities for state property located in the municipality that is exempt from property taxes.
Will a LOT Lower My Municipal Property Taxes?
Probably not directly. By generating revenue from visitors and tourists, it can help offset the cost of town services, reducing the pressure on the property tax rate and helping to stabilize future increases.
Please save the date — August 18 — when the Advisory Committee will deliver the final Local Option Tax Report to the Select Board. After the Board reviews it, there will be time for Q&A.
To review additional information the Advisory Committee has put together please click on this link - this includes a Quick Reference Guide, FAQs, and what is taxable and what is exempt.
https://www.cambridge.vermont.gov/.../local_option_tax...
Thank you for your time,
Local Option Tax Advisory
[email protected]
Cody Marsh – Select Board Liaison
Sam Lotto – Chair
Jamie Gruol – Secretary
Jack Nee – Committee Member
Matt McCabe – Committee
