HB 1652-FN-A – AS AMENDED BY THE SENATE
29Mar2012… 1438h
05/02/12 1885s
2012 SESSION
09/01
HOUSE BILL 1652-FN-A
AN ACT excluding charges for Internet access from the communications services tax and requiring the transfer of insurance premium tax revenue to the department of health and human services.
SPONSORS: Rep. K. Murphy, Hills 18
This bill clarifies that Internet access service is not subject to the communications services tax. This bill also transfers certain revenue received from the insurance premium tax to the department of health and human services for the purpose of providing services to the developmentally disabled.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
29Mar2012… 1438h
05/02/12 1885s
12-2856
09/01
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Twelve
AN ACT excluding charges for Internet access from the communications services tax and requiring the transfer of insurance premium tax revenue to the department of health and human services.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Communications Services Tax; Purpose. Amend 82-A:1 to read as follows:
82-A:1 Statement of Purpose. It is the intent of the general court to impose a tax on those who use 2-way communications services and to source mobile telecommunications services to the place of primary use. It is also the intent of the general court that Internet access service and basic communications services essential to public health, safety, and welfare shall not be subject to the tax imposed by this chapter.
2 Communications Services Tax; Definition of “Communications Services;” Internet Access Excluded. Amend RSA 82-A:2, III(b) and (c) to read as follows:
(b) Purchases of communications services by a communications services provider for use as a component part of the service provided by him to the ultimate retail consumer who originates or terminates the taxable end-to-end communications, including carrier access charges, right of access charges, charges for use of inter-company facilities, and all communications services resold in the subsequent provision of, used as a component of, or integrated into end-to-end communications services; [or]
(c) The one-way transmission of radio or television programming, by cable, broadcast, satellite, microwave or similar facility, which is made available generally to any person able to receive such transmission, together with the interaction, if any, of such person required for the selection of such programming other than by use of the same facility by which such transmission was received[.]; or
(d) Internet access.
3 New Paragraphs; Communications Services Tax; Definitions of “Internet” and “Internet Access.” Amend RSA 82-A:2 by inserting after paragraph XXIV the following new paragraphs:
XXV. “Internet” means collectively the myriad of computer and telecommunications facilities, including equipment and operating software, which comprises the interconnected world-wide network of networks that employ the Transmission Control Protocol/Internet Protocol, or any predecessor or successor protocols to such protocol, to communicate information of all kinds by wire or radio.
XXVI. “Internet access”:
(a) Means a service that enables users to connect to the Internet to access content, information, or other services offered over the Internet;
(b) Includes the purchase, use, or sale of communications services by a provider of a service described in subparagraph (a) to the extent such communications services are purchased, used or sold:
(1) To provide such service; or
(2) To otherwise enable users to access content, information, or other services offered over the Internet;
(c) Includes services that are incidental to the provision of the service described in subparagraph (a) when furnished to users as part of such service, such as a home page, electronic mail, and instant messaging (including voice- and video-capable electronic mail and instant messaging), video clips, and personal electronic storage capacity;
(d) Does not include voice, audio, or video programming, or other products and services (except services described in subparagraph (a), (b), (c), or (e)) that utilize Internet protocol or any successor protocol and for which there is a charge, regardless of whether such charge is separately stated or aggregated with the charge for services described in subparagraph (a), (b), (c), or (e); and
(e) Includes a homepage, electronic mail, and instant messaging (including voice- and video-capable electronic mail and instant messaging), video clips, and personal electronic storage capacity that are provided independently or not packaged with Internet access.
4 Communications Services Tax; Definition of “Gross Charge;” Charges of Internet Access Excluded. Amend RSA 82-A:2, V(f)-(h) to read as follows:
(f) Charges for communications services and all services and equipment provided in connection therewith between a parent corporation and its wholly owned subsidiaries or between wholly owned subsidiaries, when the tax imposed under this chapter has already been paid to a retailer and only to the extent that the charges between the parent corporation and wholly owned subsidiaries or between wholly owned subsidiaries represent expense allocation between the corporations and not the generation of profit for the corporation rendering such service; [and]
(g) [Repealed.]
(h) Bad debt. For the purposes of this paragraph, bad debt means any portion of a debt that is related to a purchase at retail for which gross charges are not otherwise deductible or excludable that has become worthless or uncollectible, as determined under applicable federal income tax standards. If the portion of the debt deemed to be bad is subsequently paid, the retailer shall report and pay the tax on that portion during the reporting period in which the payment is made[.]; and
(i) Charges for Internet access.
5 Existing Assessments Not Enforceable. The department of revenue administration shall not enforce any existing assessment of communications services tax on charges for Internet access, shall promptly withdraw all such pending assessments, and shall issue no additional assessments with respect to such charges.
6 Transfer of Insurance Premium Tax Revenue to Department of Health and Human Services. Notwithstanding any provision of law to the contrary, and in recognition of an unanticipated surplus for the fiscal year ending June 30, 2011 as determined by the official audit performed pursuant to RSA 21-I:8, II(a), the state treasurer shall transfer $1,500,000 in revenue received from the insurance premium tax pursuant to RSA 400-A:32 to the department of health and human services for the purpose of providing services to the developmentally disabled. Said amounts are hereby appropriated to the department for the biennium ending June 30, 2013.
7 Effective Date. This act shall take effect upon its passage.
LBAO
12-2856
Revised 04/13/12
Amended 04/12/12
HB 1652 FISCAL NOTE
AN ACT excluding charges for Internet access from the communications services tax and requiring the transfer of insurance premium tax revenue to the department of health and human services.
FISCAL IMPACT:
The Office of Legislative Budget Assistant states this bill, as amended by the House (Amendment #2012-1438h), will decrease state general fund revenue by $17,700,000, increase state restricted revenue by $16,200,000, and increase state expenditures by $3,000,000 in FY 2012. This bill will have no fiscal impact on county and local revenue or expenditures.
METHODOLOGY:
The Office of Legislative Budget Assistant states this bill requires the transfer of insurance premium tax revenue in an amount equal to the amount of the surplus for fiscal year 2011 as follows –
• $1,500,000 to the Department of Health and Human Services (DHHS) for the purpose of providing services to the developmentally disabled (DD); and
• The remainder to the revenue stabilization reserve account (also referred to as the rainy day fund).
The Comprehensive Annual Financial Report (CAFR) for the fiscal year ending June 30, 2011 reports a surplus of approximately $17,700,000. This bill would transfer $1,500,000 to DHHS for the purposes of DD services, and the remaining $16,200,000 to the rainy day fund.
The Department of Health and Human Services states they will receive $1,500,000 in FY 2012 from insurance premium tax revenue as a result of this bill. As a result, the Department is eligible for $1,500,000 in matching federal funds when DD services are actually provided, resulting in an increase in total state expenditures (state and federal) of $3,000,000. Current appropriations for DD waitlist services are non-lapsing for the biennium. The Department states although they will receive the funds in FY 2012, due to the mechanics of arranging and providing services, they will most likely not be able to expend the funds until FY 2013.