HB 1599-FN-A-LOCAL – AS INTRODUCED
2006 SESSION
09/03
HOUSE BILL 1599-FN-A-LOCAL
AN ACT reducing the rate of the business profits tax and repealing the business enterprise tax.
SPONSORS: Rep. Hagan, Hills 17
This bill reduces the rate of the business profits tax and repeals the business enterprise tax and credits against the business enterprise tax.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
06-2608
09/03
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Six
AN ACT reducing the rate of the business profits tax and repealing the business enterprise tax.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Business Profits Tax; Rate Reduced. Amend RSA 77-A:2 to read as follows:
77-A:2 Imposition of Tax. A tax is imposed at the rate of [8.5] 6.5 percent upon the taxable business profits of every business organization.
2 Reference Deleted; Special Fund. Amend RSA 6:12, I(b)(65) to read as follows:
(65) Money received under RSA 77-A, [RSA 77-E,] RSA 78, RSA 78-A, RSA 78-B, RSA 83-F, RSA 198:46, and from the sweepstakes fund, which shall be credited to the education trust fund under RSA 198:39.
3 Reference Deleted; Exemption From Rulemaking Requirement. Amend RSA 21-J:13-a to read as follows:
21-J:13-a Exemption From Rulemaking Requirement. The commissioner shall be exempt from adopting, as rules pursuant to RSA 541-A, the requirements on the department’s tax filing forms for the business profits tax[, business enterprise tax,] and interest and dividends tax.
4 Reference Deleted; Penalty for Failure to File. Amend RSA 21-J:31 to read as follows:
21-J:31 Penalty for Failure to File. Any taxpayer who fails to file a return when due, unless an extension has been granted by the department, shall pay a penalty equal to 5 percent of the amount of the tax due or $10, whichever is greater, for each month or part of a month during which the return remains unfiled. The total amount of any penalty shall not, however, exceed 25 percent of the amount of the tax due or $50, whichever is greater. This penalty shall not be applied in any case in which a return is filed within the extended filing period as provided in RSA 77:18-b, RSA 77-A:9, [RSA 77-E:8, RSA 83-C:6,] RSA 83-E:5, RSA 84-A:7, or RSA 84-C:7, or the failure to file was due to reasonable cause and not willful neglect of the taxpayer. The amount of the penalty is determined by applying the percentages specified to the net amount of any tax due after crediting any timely payments made through estimating or other means.
5 Reference Deleted; Substantial Understatement Penalty. Amend RSA 21-J:33-a, I to read as follows:
I. If there is a substantial understatement of tax imposed under RSA 77, RSA 77-A, [RSA 77-E,] RSA 78-A, RSA 78-C, RSA 82-A [or RSA 83-C], or RSA 83-E, for any taxable period, there shall be added to the tax an amount equal to 25 percent of the amount of any underpayment attributable to such understatement.
6 Reference Deleted; Business Profits Tax; Tax Expenditure Report. Amend RSA 77-A:5-a to read as follows:
77-A:5-a Tax Expenditure Report. On or before February 1 of every calendar year the commissioner shall certify to the general court and the governor an analysis of each of the past year’s credits allowed under RSA 77-A[, RSA 77-E, RSA 83-C, RSA 83-D,] and RSA 400-A against the business profits tax imposed by this chapter and the apportionment factors under RSA 77-A:3, II(a).
7 References Deleted; Business Profits Tax; Reporting for Qualified Investment Capital Companies. Amend RSA 77-A:5-b, IV to read as follows:
IV. The qualified investment company shall be subject to the provisions of RSA 77-A:11 [and RSA 77-E:10]. The commissioner is authorized to audit and enforce such provisions with any of the powers granted under this chapter [and RSA 77-E].
8 References Deleted; New Investment Tax Credit. Amend RSA 162-L:10, I-II to read as follows:
I. An investment tax credit equal to 75 percent of the contribution made to the authority during the contributor’s tax year shall be allowed against any of the following individually or in combination:
(a) Taxes imposed by RSA 77-A.
(b) Taxes imposed by RSA 400-A.
[(c) Taxes imposed by RSA 77-E.]
II. Credits provided by this section applied against the liabilities imposed by RSA 400-A [and RSA 77-E] shall be deemed to be taxes paid for the purpose of RSA 77-A:5, III [and X, respectively].
9 Reference Deleted; Corporations; Effect of Dissolutions. Amend RSA 293-A:14.05, (b) to read as follows:
(b) Prior to making any distribution of its remaining property among its shareholders according to their interests, the corporation shall first obtain a certificate of dissolution from the department of revenue administration in accordance with RSA 77-A:18 [and RSA 77-E:12].
10 Reference Deleted; Corporations; Reinstatement After Administrative Dissolution. Amend RSA 293-A:14.22, (a)(4) to read as follows:
(4) Contain a certificate from the New Hampshire department of revenue administration in accordance with RSA 77-A:18, III, [and RSA 77-E:12, III,] if such application is received by the secretary of state more than 120 days after the notice of administrative dissolution is mailed.
11 Reference Deleted; Corporations; Late Reinstatement Hearings. Amend RSA 293-A:14.22-a, (a)(4) to read as follows:
(4) Contain a certificate from the New Hampshire department of revenue administration in accordance with RSA 77-A:18, III[, and RSA 77-E:12, III];
12 Reference Deleted; Corporations; Withdrawal of Foreign Corporation. Amend RSA 293-A:15.20, (b)(6) to read as follows:
(6) A statement of withdrawal from the New Hampshire department of revenue administration in accordance with RSA 77-A:18, II [and RSA 77-E:12, II].
13 Repeal. The following are repealed:
I. RSA 21-J:45, I(b), relative to reports on status of monthly tax returns for the business enterprise tax.
II. RSA 77-E, relative to the business enterprise tax.
III. RSA 77-A:5, X, relative to the business enterprise tax credit against the business profits tax.
IV. RSA 77-A:5, XII, relative to the crop zone tax credit.
V. RSA 162-N, relative to community reinvestment and opportunity (CROP) zones and tax credits.
VI. RSA 198:39, I(b), relative to business enterprise tax revenues deposited in the education trust fund.
VII. RSA 277-B:9, XI, relative to payment of the business enterprise tax by employee leasing companies.
VIII. RSA 400-A:34-a, relative to the credit against the business enterprise tax for insurance taxes.
14 Applicability. This act shall apply to returns and taxes due under RSA 77-A and RSA 77-E on account of taxable periods ending on or after July 1, 2006.
15 Effective Date. This act shall take effect July 1, 2006.
LBAO
06-2608
11/10/05
HB 1599-FN-A-LOCAL - FISCAL NOTE
AN ACT reducing the rate of the business profits tax and repealing the business enterprise tax.
FISCAL IMPACT:
The Department of Revenue Administration indicates this bill will decrease state unrestricted general fund revenue by $43,500,000 and state restricted education trust fund revenue by $100,800,000 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 this bill reduces the business profits tax (BPT) to 6.5% and repeals the business enterprise tax (BET). The Department determined that using FY 2004 adjusted BPT revenue totals to determine the tax base, changing the rate from 8.5% to 6.5% will decrease BPT by $54,800,000 ($13,700,000 general fund and $41,100,000 education trust fund). Repealing BET, net of the credit against BPT ($83,135,000) and the BET credit against the insurance premium tax ($2,600,000), will decrease BET revenue by $89,500,000 ($29,800,000 general fund and $59,700,000 education trust fund).
The Department states this tax change can be administered within their existing budget.