I serve on the House Ways and Means Committee, and we are responsible for calculating the expected revenue from NH based taxes and fees.
In April we heard from the Department of Revenue Administration and the legislative budget assistant that receipts from major taxes, especially the Business Profits Tax, (BPT) and Business Enterprise Tax (BET) were falling behind last year’s collections. One of the reasons for this is that the House has methodically lowered these two tax rates over the last several years.
On the surface that would sound good for businesses and their growth, and it is, but the lowering of BPT from 8.5 percent to 7.5 percent for the state’s largest businesses has not been their concern and they have expressed that to the W&M committee. They want their property taxes lowered, and that is a local decision, not a state one.
Next year the Interest and Dividends tax will be eliminated, and the state will lose another $114 million dollars.
The effect of these tax decisions will cumulatively reduce revenue by 2031 of $2.02 billion dollars.
There are a host of other tax decisions that will lighten the tax liability of business beginning in 2025 including an increase in deductions against the BPT from $500,000 to $1 and net operating loss deduction limits on taxable income under the BPT, a response to changes in the Internal Revenue Code. A third tax code change is to limit credit carry forward of overpayment of taxes.
These changes will increase “indeterminable” amounts of revenue from 2025 through 2029 and decrease by “indeterminable” amounts from 2030 through 2034.
As revenue to the state decreases without a corresponding drop in state support of public education, roads, pensions and health care, a bigger tax burden will be placed on property taxpayers.
State tax cut decisions do affect property taxpayers including both businesses and home owners. Unfortunately, these decisions will put more pressure on towns and cities to raise our property taxes to pay for services currently provided by the state. With both private property and business owners clamoring for lowering their property taxes, why does current House leadership insist on continuing to lower these important revenue streams?