HB 1369-FN-A-LOCAL – AS INTRODUCED
2008 SESSION
09/01
HOUSE BILL 1369-FN-A-LOCAL
AN ACT relative to the amount of meals and rooms taxes retained by operators collecting the tax.
SPONSORS: Rep. Vaillancourt, Hills 15
This bill decreases the percentage amount which operators may retain as compensation under the meals and rooms tax and places a monthly cap of $100 on such amount.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
08-2600
09/01
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Eight
AN ACT relative to the amount of meals and rooms taxes retained by operators collecting the tax.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Meals and Rooms Tax; Operators’ Compensation. Amend RSA 78-A:7, III to read as follows:
III. To compensate operators for keeping the prescribed records and the proper account and remitting of taxes by them, operators are allowed to retain [3] 1.5 percent of the taxes due, up to a maximum amount of $100 per month, and to be remitted if the return and payment are timely received by the department of revenue administration, as provided in RSA 78-A:8, III.
2 Effective Date. This act shall take effect July 1, 2008.
LBAO
08-2600
Revised 11/21/07
HB 1369-FN-A-LOCAL - FISCAL NOTE
AN ACT relative to the amount of meals and rooms taxes retained by operators collecting the tax.
FISCAL IMPACT:
The Department of Revenue Administration states this bill will increase state general fund revenue by $4,470,961, increase Education Trust Fund revenue by $162,159, and increase state general fund expenditures by an indeterminable amount in FY 2009 and each year thereafter. There will be no fiscal impact on county and local revenue or expenditures.
METHODOLOGY:
The Department of Revenue Administration states this bill will decrease the compensation amount operators may retain under the meals and rooms tax from 3 percent to 1.5 percent of the taxes due with a monthly cap of $100. The Department estimates meals and rooms tax revenue for FY 2009 will be $230,000,000. The Department states the average compensation amount retained by operators over the past 5 years was 2.8538 percent. The Department analyzed 50,747 tax returns for FY 2007 where a commission was taken to determine how much of the commission would have been allowed using the 1.5 percent commission with a monthly cap $100. The Department found for the FY 2007 tax returns, 0.8394 percent would have been allowed. Using this percentage, the Department estimates the allowable compensation for operators would be $1,930,620 ($230,000,000 * 0.8394%). Reducing the compensation rate to 1.5 percent with a monthly cap of $100 would increase meals and rooms tax revenue by $4,633,120 (($230,000,000 * 2.8538 %) - $1,930,620). The Department indicates approximately 3.5 percent of the increased revenue will be attributable to motor vehicle rentals. This will increase the Education Trust Fund by $162,159.
The Department indicates it will have additional costs to administer this change. The Department will need to educate operators of the change in the compensation percentage, bill those operators who retain more than the allowed 1.5 percent or monthly cap of $100 of compensation, and complete some reprogramming of the Tax Information Management System to reflect the changes. The Department is not able to determine the expenditures that will be incurred by decreasing the meals and rooms operator’s compensation to 1.5 percent of the taxes with a monthly cap of $100.