HB562 (2009) Detail

Establishing a job creation tax credit for the town of Greenville.


HB 562-FN-A – AS INTRODUCED

2009 SESSION

09-0230

09/05

HOUSE BILL 562-FN-A

AN ACT establishing a job creation tax credit for the town of Greenville.

SPONSORS: Rep. Leishman, Hills 3; Rep. Irwin, Hills 3; Sen. Bragdon, Dist 11

COMMITTEE: Ways and Means

ANALYSIS

This bill establishes a job creation tax credit for the town of Greenville.

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

09-0230

09/05

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Nine

AN ACT establishing a job creation tax credit for the town of Greenville.

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

1 New Paragraph; Town of Greenville Job Creation Tax Credit. Amend RSA 77-A:5 by inserting after paragraph XIV the following new paragraph:

XV. The unused portion of any town of Greenville job creation tax credit awarded by the commissioner under RSA 77-E:3-c shall be available to apply to the business profits tax.

2 New Section; Business Enterprise Tax; Town of Greenville Job Creation Tax Credit. Amend RSA 77-E by inserting after section 3-c the following new section:

77-E:3-d Town of Greenville Job Creation Tax Credit.

I.(a) There shall be a tax credit allowed for each qualified tax credit employee, for up to 5 consecutive tax periods, as certified by the commissioner of resources and economic development under RSA 162-R:1. The amount of the tax credit shall be as follows:

(1) $750 for each qualified tax credit employee earning wages which are equal to or greater than 150 percent but less than 200 percent of the current state minimum wage.

(2) $1000 for each qualified tax credit employee earning wages which are equal to or greater than 200 percent of the current state minimum wage.

(b) If the position held by a qualified tax credit employee ceases to exist at any time during the 5 consecutive tax periods, the employer may not claim the credit for the tax period in which the position ceased to exist or for future tax periods within the 5 consecutive tax periods.

II. The initial job creation tax credit allowed under this paragraph shall not apply to any tax period ending prior to the effective date of this section, or to any tax period ending after December 31, 2014. After being initially granted, the tax credit shall be renewable for 4 consecutive additional years, provided that no additional tax credit shall be granted for any tax period after December 31, 2018.

III. Unused portions of this credit shall be carried forward up to 5 years. Unused, carried forward credit under this section shall be applied before any other available carry-forward credit.

IV. For the purpose of the credit allowed under this section, the town of Greenville job creation tax credit shall be considered taxes paid under RSA 77-E.

3 New Chapter; Town of Greenville Job Creation Tax Credit. Amend RSA by inserting after chapter 162-Q the following new chapter:

CHAPTER 162-R

TOWN OF GREENVILLE JOB CREATION TAX CREDIT

162-R:1 Definition.

I. In this chapter “qualified tax credit employee” means a new, full-time, year-round employee hired in town of Greenville for work directly in one or more business activities for which actual wages paid are equal to or greater than 150 percent of the current state minimum wage. “Qualified tax credit employee” does not include an employee who is:

(a) Shifted to a new position because of a merger, acquisition, or restructuring; or

(b) Laid-off and rehired within 270 days to the same or similar position.

(c) Not on the employer’s payroll for at least 90 days prior to the date on which the employer claims the credit for the first tax period.

II. For the purposes of calculating wages paid to the employee under paragraph I, the amount paid by the employer for medical and dental health care benefits for the employee shall be included in the amount of actual wages paid.

162-R:2 Approval and Certification. The commissioner of the department of resources and economic development, in consultation with the commissioner of the department of revenue administration, shall develop application forms with which taxpayers may apply for the job creation tax credit. The forms shall be submitted by taxpayers to the commissioner of the department of resources and economic development, and the commissioner shall approve or deny such application and certify to the commissioner of the department of revenue administration the total credit awarded to each business organization that hires qualified tax credit employees.

162-R:3 Reports. The commissioner of the department of resources and economic development shall file a report detailing the implementation of the tax credit program under RSA 77-E:3-d and the results achieved. This report shall be filed with the president of the senate, the speaker of the house of representatives, and the governor on or before July 31 of each year, beginning with July 31, 2010. The report shall include the following:

I. Methods and activities used to implement the tax credit program.

II. The number and type of jobs created in town of Greenville.

III. The total amount of tax credits awarded.

IV. Other information as deemed relevant.

4 Nonseverability. It is the intent of the legislature that this act be considered a unit and its provisions inseparable. If any provision of this act is declared unconstitutional or invalid, the entire act and all of its provisions shall be invalid.

5 Effective Date. This act shall take effect upon its passage.

LBAO

09-0230

01/21/09

HB 562-FN-A - FISCAL NOTE

AN ACT establishing a job creation tax credit for the town of Greenville.

FISCAL IMPACT:

    The Legislative Budget Assistant Office states this bill will decrease state general fund revenue by an indeterminable amount in FY 2009 and each fiscal year thereafter. There will be no fiscal impact on county and local revenue or state, county, and local expenditures.

METHODOLOGY:

    The Legislative Budget Assistant Office (LBAO) estimated the fiscal impact of this bill using information from Chapter 172:3, Laws of 2008, an act establishing a Coos County job creation tax credit. The LBAO states this bill establishes a job creation tax credit for the town of Greenville. The LBAO assumes that most Town of Greenville businesses would take advantage of this credit and possibly not pay any business enterprise tax (BET) or business profits tax (BPT) through FY 2019 (FY 2014 plus the unused portion of this credit carried forward up to five additional years). The bill authorizes tax credits of either $750 or $1,000 for each qualified tax credit employee for up to five consecutive tax periods which could create a $3,750 to $5,000 per employee tax credit. The credit will now be considered taxes paid under RSA 77-E (BET) and can be used to offset taxes due under RSA 77-A (BPT), creating a cascading effect of the credit.

    The Department of Revenue Administration states this bill has constitutional issues due to the fact that it singles out the town of Greenville for this tax benefit.

    The Department of Resources & Economic Development (DRED) states the bill will not have a fiscal impact on the Department.