HB 1514-FN-A – AS INTRODUCED

2006 SESSION

06-2448

09/10

HOUSE BILL 1514-FN-A

AN ACT relative to the business enterprise tax credit allowed against the business profits tax.

SPONSORS: Rep. Lasky, Hills 26; Rep. C. Hamm, Merr 4

COMMITTEE: Ways and Means

ANALYSIS

This bill extends the carry-forward provision for the business enterprise tax credit from 5 years to 10 years.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

06-2448

09/10

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Six

AN ACT relative to the business enterprise tax credit allowed against the business profits tax.

Be it Enacted by the Senate and House of Representatives in General Court convened:

1 Business Profits Tax; Credit for Business Enterprise Tax. Amend RSA 77-A:5, X to read as follows:

X. Taxes paid pursuant to RSA 77-E. Such credit shall be applied in accordance with RSA 77-E:13. No amount of tax paid pursuant to RSA 77-E and used as a credit against the taxes due under RSA 83-C or RSA 400-A shall be allowed as a credit under this paragraph except as provided in RSA 83-C:2-a or RSA 400-A:34-a. Any unused portion of the credit allowed under this paragraph may be carried forward and allowed against the tax due under this chapter for [5] 10 taxable periods from the taxable period in which the tax was paid.

2 Effective Date. This act shall take effect July 1, 2006.

LBAO

06-2448

Revised 1/30/06

HB 1514 FISCAL NOTE

AN ACT relative to the business enterprise tax credit allowed against the business profits tax.

FISCAL IMPACT:

The Department of Revenue Administration indicates this bill will decrease state unrestricted general fund revenue and state restricted education trust fund revenue by an indeterminable amount in FY 2007 and each year thereafter. There is no fiscal impact on state, county and local expenditures or county and local revenue.

METHODOLOGY:

The Department states that this bill extends the carry-forward provision for the business enterprise tax (BET) credit from 5 to 10 years. The Department indicates that the fiscal impact of this bill is indeterminable, however, the Department analyzed the amount of BET credit utilized in tax years 1994 through 1999, calculated the percentage of change between years and applied it to the FY 2004 figures. The revenue projections were then extrapolated out two years to estimate the range of revenue loss by increasing the BET carry-forward provision from 5 to 10 years immediately. The loss range for fiscal years FY 2008 and after would be static assuming all variables remain the same. The table below lists projected ranges of state revenue decreases by fiscal year. The state revenue decrease from this bill will impact both state unrestricted general fund revenue and state restricted education trust fund, however, the amount each revenue type will decrease is indeterminable. The Department states that this tax change can be administered within their existing budget.