The New Hampshire Senate on Thursday voted to lower the rate of the business profits tax and to send money to municipalities to lower property taxes, over objections from Democrats that opposed the former and wanted to do more of the latter.
House Bill 1221 would lower the BPT rate from 7.6% to 7.5%, but the bill won’t go to the governor just yet because the Senate added an amendment of a one-time infusion of surplus funds to municipalities to help them make retirement payments.
The Legislature has been lowering the BPT incrementally ever since 2016, when it was 8.5%, as it has with the business enterprise tax. When introduced, the bill contained a BET tax reduction as well, but the House Ways and Means Committee deleted it to save money.
The BPT tax would eventually cost the state about $8.5 million a year. The BET revenue loss would be more than three times that amount.
But the state now has a lot more money. According to the latest report, business revenues in April were up $82.8 million over projections, and more than $380 million so far this fiscal year.
Smaller business tend to pay the BET, while most of the BPT is paid by larger companies, many which are based out of state. And that is what Democrats tended to focus on in the debate, along with raising concerns about a possible future recession.
“I know we know revenues are higher than expected, but let’s not kid ourselves. This will not continue forever,” said Sen. Cindy Rosenwald, D-Nashua, who attributed the surplus to a booming economy on top of federal aid. “If we keep cutting taxes that benefit only larger profitable corporations” it would downshift costs to the towns, which could raise property taxes, she said.
But Sen Jeb Bradley, R-Wolfeboro, argued that the previous tax cut caused the surplus. “If you kill the golden goose, you don’t get property tax relief. Lowering the business tax has been wildly successful,” he said.
Also on Thursday, the Sente sent House Bill 1165, a bill to repeal the Granite State Paid Family Leave Plan to interim study on a voice vote without any debate.
Gov. Chris Sununu’s voluntary plan that was slipped into last year’s budget would allow companies and individuals to piggyback on a taxpayer-funded benefit to state employees, encouraged by tax breaks and subsidies. Under the plan, participants who need to leave work to care for a loved one or themselves would be paid 60% of their salary for six weeks. The state has already put the plan out for bids that are due back Monday.
“Now is not the time to pull the rug under the Granite State Family Leave Plan, said Bradley.
These articles are shared by partners in The Granite State News Collaborative.