Bill Text - HB1418 (2012)

Increasing the threshold amounts for taxation under the business enterprise tax.


Revision: May 14, 2012, midnight

HB 1418-FN-A – AS AMENDED BY THE SENATE

15Mar2012… 0939h

05/02/12 1965s

2012 SESSION

12-2135

09/03

HOUSE BILL 1418-FN-A

AN ACT increasing the threshold amounts for taxation under the business enterprise tax and extending the commission to study business taxes.

SPONSORS: Rep. Sapareto, Rock 5; Rep. Weyler, Rock 8; Rep. Major, Rock 8; Rep. R. Ober, Hills 27; Rep. Bettencourt, Rock 4

COMMITTEE: Ways and Means

AMENDED ANALYSIS

This bill increases the threshold amounts for taxation under the business enterprise tax. The bill also extends the commission to study business taxes.

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

15Mar2012… 0939h

05/02/12 1965s

12-2135

09/03

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Twelve

AN ACT increasing the threshold amounts for taxation under the business enterprise tax and extending the commission to study business taxes.

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

1 Business Enterprise Tax; Returns. Amend RSA 77-E:5 to read as follows:

77-E:5 Returns.

I. Every business enterprise having gross business receipts in excess of [$150,000] $200,000 as adjusted biennially for inflation and rounded to the nearest $1,000 by the commissioner using the Consumer Price Index, Northeast Region as defined by RSA 77-E:1, X, during the taxable period or the enterprise value tax base of which is greater than [$75,000] $100,000 as adjusted biennially for inflation and rounded to the nearest $1,000 by the commissioner using the Consumer Price Index, Northeast Region, shall, on or before the fifteenth day of the third month in the case of enterprises required to file a United States corporation tax return, and the fifteenth day of the fourth month in the case of all other business enterprises, following expiration of its taxable period, make a return to the commissioner. All returns shall be signed by the business enterprise or by its authorized representative, subject to the pains and penalties of perjury and the penalties provided in RSA 21-J:39.

II. Every business enterprise shall in addition file a declaration of its estimated business enterprise tax for its subsequent taxable period; provided, however, if the estimated tax is less than [$200] $260, a declaration need not be filed; and provided further that a declaration shall be filed at the end of any quarter thereafter in which estimated tax exceeds [$200] $260. The declaration shall be filed when payments are due under RSA 77-E:6.

2 Commission to Study Business Taxes Extended. Amend RSA 77-F:1, VII and VIII to read as follows:

VII. The commission shall, following a public hearing on a draft [final] report, submit a [final] report on the items included in subparagraphs III(a), (b), and (e) or before December 1, 2010, containing its findings and any recommendations for proposed legislation, to the governor, the president of the senate, the speaker of the house of representatives, the chairs of the house and senate ways and means committees, the house and senate clerks, and the state librarian.

VIII. The commission shall, following a public hearing on a draft [final] report, submit a [final] report on the items included in subparagraphs III(c) and (d) or before November 1, 2012, containing its findings and any recommendations for proposed legislation, to the governor, the president of the senate, the speaker of the house of representatives, the chairs of the house and senate ways and means committees, the house and senate clerks, and the state librarian.

IX. The commission shall, following a public hearing on a draft report, submit a report on the items included in subparagraphs III(a), (b), and (e) or before December 1, 2012, containing its findings and any recommendations for proposed legislation, to the governor, the president of the senate, the speaker of the house of representatives, the chairs of the house and senate ways and means committees, the house and senate clerks, and the state librarian.

X. The commission shall, following a public hearing on a draft report, submit a report on the items included in subparagraphs III(c) and (d) or before November 1, 2014, containing its findings and any recommendations for proposed legislation, to the governor, the president of the senate, the speaker of the house of representatives, the chairs of the house and senate ways and means committees, the house and senate clerks, and the state librarian.

3 Commission to Study Business Taxes Extended. Amend SS2010, 1:123, III to read as follows:

III. Section 56 of this act shall take effect November 1, [2012] 2014.

4 Effective Date.

I. Section 1 of this act shall be in effect for taxable periods ending on or after December 31, 2013.

II. The remainder of this act shall take effect upon its passage.

LBAO

12-2135

Amended 05/14/12

HB 1418 FISCAL NOTE

AN ACT increasing the threshold amounts for taxation under the business enterprise tax and extending the commission to study business taxes.

FISCAL IMPACT:

    The Department of Revenue Administration states this bill, as amended by the Senate (Amendment #2012-1965s), will decrease state revenue by an indeterminable amount in FY 2013 and each year thereafter. This bill will have no fiscal impact on state, county, and local expenditures, or county and local revenue.

METHODOLOGY:

    The Department of Revenue Administration states this bill would amend the Business Enterprise Tax (BET) filing thresholds to $200,000 gross business receipts or an Enterprise Tax Value Base (BETVB) of greater than $100,000. The Department analyzed Tax Year 2009 data, which consisted of the 16,649 returns filed by entities that had a BETVB of less than or equal to $100,000. Tax Year 2009 was used as it is the most complete file tax year for New Hampshire business taxes with available matching federal tax records. The Department states the minimum revenue loss would be $1,977,988 and the maximum revenue loss estimated for these changes would be $4,528,156, based upon the returns used in the study. The Department rounds the possible revenue loss to between $2,000,000 and $4,500,000 for a single tax year. The bill would take effect for taxable periods ending on or after December 31, 2013. The impact of this revenue loss could be felt in FY 2013 due to a possible reduction of required BET estimate payments. The Department is unable to determine the decrease in revenue for FY 2014 and beyond. The Department states with all of the presumed available BET credit carryforward outstanding, it is unlikely that BET offsets against BPT would be reduced to a degree that it could minimize the loss of BET revenue. The Department states this bill would require the commissioner of the Department to biennially adjust the two filing thresholds, which is mechanically simple, but tedious in that the tax forms would constantly be changing. The Department cannot estimate the tax loss every biennium since it cannot predict future consumer price index numbers, and the current fiscal impact is based upon Tax Year 2009 data. The Department states the last section of the bill would change the requirement for an estimated payment from a total BET liability of $200 or more to $260. The Department states this should not have much of a fiscal impact as no one with less than $200,000 gross business receipts or a $100,000 of BETVB would be subject to the tax. Someone having a BETVB of $100,000 would have a $750 tax liability. While the loss of estimate payments may be minimal, the deferral of tax payments due to this increased threshold cannot be quantified.

    The Department of Revenue Administration states this bill also extends the Commission to Study Business Taxes which will have no fiscal impact.

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