SB397 (2006) Detail

Establishing a temporary energy tax credit against the business enterprise tax.


SB 397-FN-A – AS INTRODUCED

2006 SESSION

06-3030

09/10

SENATE BILL 397-FN-A

AN ACT establishing a temporary energy tax credit against the business enterprise tax.

SPONSORS: Sen. Morse, Dist 22; Sen. Clegg, Dist 14; Sen. Letourneau, Dist 19; Sen. Barnes, Dist 17; Sen. Green, Dist 6

COMMITTEE: Finance

ANALYSIS

This bill establishes a temporary energy tax credit 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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

06-3030

09/10

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Six

AN ACT establishing a temporary energy tax credit against the business enterprise tax.

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

1 Temporary Energy Tax Credit.

I. There shall be a temporary, one-year energy tax credit against the business enterprise tax under RSA 77-E for the fiscal year ending June 30, 2007. This credit shall be equal to $500 or 50 percent of actual energy costs paid by the taxpayer during the fiscal year, whichever is less.

II. The total credit allowed under paragraph I shall not exceed the total tax due under RSA 77-E.

III. The commissioner of the department of revenue administration is authorized to design forms or alter existing forms to administer this tax credit, and the commissioner shall publish a technical information release to instruct taxpayers on the procedure to claim the credit.

IV. For the purposes of paragraph I, “energy costs” means expenditures for fuel, electricity, purchase, and installation of energy-saving devices, and purchase and installation of alternative energy systems or devices.

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

LBAO

06-3030

1/19/06

SB 397-FN-A - FISCAL NOTE

AN ACT establishing a temporary energy tax credit against the business enterprise tax.

FISCAL IMPACT:

The Department of Revenue Administration indicates this bill will decrease state revenue by $18,033,979; $6,011,326 of state unrestricted general fund revenue, $12,022,653 of state restricted education trust fund revenue in FY 2007. There is no fiscal impact on state, county and local expenditures or county and local revenue.

METHODOLOGY:

The Department of Revenue Administration (DRA) states that this bill establishes a temporary energy tax credit against the business enterprise tax (BET). DRA, using a tax model on FY 2004 BET tax returns (63,596 filers), determined that 47,611 filers would qualify for the one-year energy tax credit. Based on this tax model, $20,758,495 of credit would be taken against the BET liability. This BET reduction would also result in a BPT recapture of credit not available in the amount of $2,724,517. The net impact is a decrease in state revenue of $18,033,979; 1/3 or $6,011,326 state unrestricted general fund revenue and 2/3 or $12,022,653 state restricted education trust fund revenue. The Department states that this tax change can be administered within their existing budget.