Gov. Chris Sununu vetoed the 2019-21 state budget because of financial reasons, but there’s an estimated $177 million per year available that the “corner office,” under Gov. Sununu, refuses to take leadership on in resolving this revenue issue.

The issue: Tax avoidance by multinational corporations operating in New Hampshire, tax avoidance achieved by shifting profits to subsidiaries in offshore tax havens.

Local, domestic New Hampshire businesses do not and cannot avoid the taxes on the profits that they earn in New Hampshire. After all, if multinational corporations can reduce their N.H. tax base to zero or next to nothing, the Business Profits Tax rate is meaningless.

Six percent or 7% or 8% of nothing is nothing, so their N.H. Business Profits Tax is zero.

In 1986, with guidance by Gov. John Sununu’s testimony and scare tactics, the N.H. Legislature was persuaded to adopt the “water’s edge” accounting method that forces the state to ignore the true identity and profitability of the whole enterprise. The method of accounting that was replaced by the N.H. Legislature is the “unitary method of taxation on a worldwide basis.” This method identified the income of the whole and then apportions that income according to the proportionate contribution of the taxing state as measured by sales, payroll and property.

The estimated revenue loss to New Hampshire was $177 million in 2018, according to a Jan. 17 review by the Institute on Taxation and Economic Policy. The name of the review is “A Simple Fix for a $17 Billion Loophole.”

In particular, the tax code favors foreign-based multinational corporations operating in New Hampshire. This favoritism is why so many foreign corporations are operating in New Hampshire – 453 subsidiaries owned by 186 corporations based in 24 different countries, according to a report by two Plymouth State professors published in N.H. Business Review on April 13, 2018.

Is this a level playing field for local businesses in my area, like Grounds in New London, the Vernondale Store in Sutton or the Park-N-Go Market in Wilmot? No! When local businesses can’t hide profits offshore like the multinationals operating here in New Hampshire, it is clear that the playing field is tilted against our local businesses.

Shouldn’t the state of New Hampshire “even” the playing field and close this corporate tax avoidance loophole by moving back to a worldwide combined reporting system? Shouldn’t Gov. Sununu, who vetoed a good budget for dubious reasons, become proactive and brave by stopping multinational corporations from dodging N.H. taxes?

When multinational companies benefit from N.H. public tax dollars by using N.H.’s public infrastructure, emergency services and an educated work force paid through property taxes, shouldn’t Gov. Sununu be doing more to force these large multinational corporations to pay their fair share?

These large U.S.- and foreign-based multinational corporations enjoy our New Hampshire marketplace, which was paid for by all who live, work and visit here.

Gov. Chris Sununu, don’t these large multinational corporations have a responsibility to help solidify our state’s financial foundation?

(Tom Schamberg of Wilmot represents Merrimack District 4 in the N.H. House of Representatives.)