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Bill would slash business taxes in N.H. once again



Monitor staff
Monday, April 17, 2017

The state still doesn’t know the full impact of a recent cut in business tax rates, but the Legislature is already considering another reduction.

A Republican-backed Senate bill would further lower the business profits and enterprise taxes in 2020, resulting in an estimated loss of $81 million in revenue the next year, according to projections from the Department of Revenue Administration.

Republicans in control of the Legislature and GOP Gov. Chris Sununu say tax cuts are a way to attract businesses and grow the economy, but Democrats have pointed to workforce development and lowering electricity costs as higher priorities.

“We don’t need to cut business taxes,” said Democratic Sen. Lou D’Allesandro, on the Senate Ways and Means Committee. “We are competitive.”

After a tense budget standoff in 2015, then-Gov. Maggie Hassan agreed to sign a spending plan into law that reduced business taxes in 2016 and again in 2018. The 2018 cut takes effect only if the state meets certain revenue targets. Though some raised questions about whether another reduction is premature, others argue it sends a much-needed strong signal.

“It’s important to show the continuing trend in New Hampshire to bring business taxes down to reasonable levels,” said Republican Rep. Bill Ohm, after a hearing on the bill in the House Ways and Means Committee.

Business taxes are big moneymakers for the state. Together, the business profits and enterprise taxes are expected to generate $565 million this fiscal year, roughly one-quarter of state-raised dollars.

While the first round of tax cuts are now in effect, the full financial impact won’t be clear until the end of the year, once most of the returns are filed, according to DRA officials. The business profits tax, levied on organizations with more than $50,000 in gross receipts, currently stands at 8.2 percent. The business enterprise tax, assessed on wages, interest and dividends, is 0.72 percent.

The bill proposed by Bedford Sen. Andy Sanborn would lower the rates to 7.5 and 0.5 percent, respectively, beginning in 2020. The legislation has already cleared the GOP-led state Senate on a party line vote, and it’s now under consideration in the House.

(Allie Morris can be reached at 369-3307 or amorris@cmonitor.com.)