(a) The assets of the Vermont Higher Education Investment Plan held by the Corporation and the assets of any similar plan qualified under Section 529 of the Internal Revenue Code and any income therefrom shall be exempt from all taxation by the State or any of its political subdivisions. Income earned or received from the Fund by any participant or beneficiary shall not be subject to State income tax and shall be eligible for any benefits provided in accordance with the Investment Plan provisions of the Internal Revenue Code. The exemption from taxation under this section shall apply only to assets and income maintained, accrued, or expended pursuant to the requirements of the Vermont Higher Education Investment Plan, the provisions of this subchapter, and the applicable provisions of the Internal Revenue Code. No exemption shall apply to assets and income expended for any other purposes.

(b) Contributions to an account held under the Vermont Higher Education Investment Plan shall be eligible for a credit against Vermont income tax as provided under 32 V.S.A. § 5825a. (Added 1997, No. 79 (Adj. Sess.), § 1, eff. Jan. 1, 1999; amended 2001, No. 58, § 4, eff. June 16, 2001; 2003, No. 65, § 1.)