TAXES

NH House Votes To...

This bill freezes the business profits and business enterprise tax rates at the levels paid for tax year 2018, rather than allow them to descend further. Relatively small changes in tax rates are much less important to businesses than workforce issues (training and basic education, physical and mental health and addiction, housing, workforce renewal in an aging population), transportation, energy costs, client-friendly permitting, quality of life and a functioning legal system.

Most of these areas are ones that the state plays an important role in, and that we have been progressively underfunding for years. When times were good, the legislature cut revenues rather than adequately fund the contractors and state employees that carry out the work of government. When the economy slowed, we cut employees and further underpaid contractors, reducing services to businesses and citizens alike. And we cut multiple revenues to the municipalities and counties, directly increasing the property tax. Businesses pay that tax too.

The business-funded Council on State Taxation reports yearly that in our state, almost half of
all taxes, fees, and other charges levied on businesses are property tax, while the business taxes come in a poor second. The current group of business tax rate cuts, if left unchecked, will reduce our total general and education trust fund revenues by 6% from 2016-22, assuming a constant economy. The cuts have not generated new revenues: the first set followed a normal recovery – normal for our state – in 2015, and the second coincided with the massive federal stimulus passed in December 2017. When we next have a recession (many predict 2020) we will emerge with revenues that require major cuts in state-level spending, due to the tax cuts. And more will be down-shifted to the property tax, which is already almost two-thirds of our entire tax
system.

TAXES

NH House Rejects ...

A NH House session on Wednesday July 25, 2018 killed a proposal offered by a bi-partisan task force that would require states and other taxing jurisdictions to register with the attorney general's office, pay fees and prove compliance with state laws and the Constitution before collecting taxes.

A June 21, 2018 ruling by the U.S. Supreme Court on online shopping prompted a special session by the NH legislature to look at the effect this will have on NH businesses with on-line offerings.

The bill failed and will not see action until the legislature convenes in January of 2019.

An article in the Thursday Portsmouth Hearld found below describes the session and the results of the votes.

TAXES

Creating Tax Loop...

A bill in the state Legislature that would create a tax loophole and decrease state revenues by millions recently slipped through the N.H. House.

HB 1686 broadens the Education Tax Credit (ETC) program beyond businessess to allow individual interest-and-dividends taxpayers to participate as well. Currently, businesses donate money to an education scholarship organizational and receive credits against their business-profits tax. Individuals participating would receive credits against their I&D taxes.

Stacking state ETCs with charitable tax deductions at the federal level, wealthy taxpayers would end up receiving more money back than they donated. With a return on investment exceeding 20 percent, it won’t take very long for financial planners and tax accountants to make this very, very popular.

I serve on the House Ways and Means Committee and voted against this scheme, and the April 10, 2018 edition of the Union Leader agrees that this type of “carve out” is not a good idea, writing that, “when politicians carve up the tax code with exemptions and special breaks, it means someone else ends up paying more.” They are right.

In their editorial, they also point out that a recent move by Ways and Means to lower real estate transfer taxes would help first time homebuyers, the Legislature should lower the rate for everyone. Creating a lower rate for favored class of homebuyers is social engineering, and bad policy.

I also voted against this bill in committee and will be voting against it when it comes to the floor.

TAXES

Tax Structure For...

This week the NH House voted overwhelmingly to establish a commission to study changes to state tax law. Goals include reducing the burden on property taxes under the current tax structure and evaluate the taxes and other revenue sources that provide the most revenue to the state with regard to their ability to foster or impede the goals of growth and to attract and retain the young people needed to reverse current demographic trends that threaten such growth. NH has experienced significant economic and demographic changes and this bill will help policy makers understand how to best deal with these accelerating changes.

The tax structure of NH is very complex and relies on many sources to support education, infrastructure, human services, recreation and law enforcement efforts. The Ways and Means Committee, on which I serve, acknowledges that being without a sales or income tax is what makes, and will continue to make, NH unique. The commission shall make proposals to adapt the state’s tax structure to these needs as it sees fit. The committee unanimously supported this bill as amended.

TAXES

Local Property Ta...

The mayors of three New Hampshire towns are upset that the state of New Hampshire is raising municipal property taxes and are asking that every town and city in the state to join together against recent actions by the state.

When the state decreases its support of pensions and reduces its educational assistance which supports children who qualify for free and reduced lunch in our communities, local communities are forced to pick up the tab and therefore, raise property taxes.

Nashua Mayor Jim Dochess, Rochester Mayor Caroline McCarley, and Franklin Mayor Ken Merrifield have drafted a letter that says the state “is doing a disservice by imposing additional costs on the municipalities that are responsible for providing quality public services.” It suggests that the state adopt a long term plan that provides relief to the cities and towns that bear the burden of paying these costs.”

This is a major reason why I’m running for State Representative. When the state makes cuts to these services, the towns are forced to readjust budgets and either make cuts to vital services to cover for these reductions, or raise property taxes.

Whatever the town decides to do, it puts further strain on town budgets and taxpayers.

As a State Representative, I will fight to insure that when the state reduces spending, it doesn’t have a detrimental effect on our town budgets and our property tax payers.