Revision: Feb. 2, 2016, midnight
\t \t\tSB 552-FN - AS INTRODUCED
2016 SESSION
\t16-2982
\t10/09
SENATE BILL\t552-FN
AN ACT\trelative to expense deductions under the business profits tax.
SPONSORS:\tSen. Sanborn, Dist 9; Sen. Avard, Dist 12; Sen. Cataldo, Dist 6; Sen. Reagan, Dist 17; Sen. Stiles, Dist 24; Sen. Prescott, Dist 23; Sen. Morse, Dist 22
COMMITTEE:\tWays and Means
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ANALYSIS
\tThis bill allows a business organization to calculate expense deductions under the business profits tax according to the current effective version of Internal Revenue Code section 179.
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Explanation:\tMatter added to current law appears in bold italics.
\t\tMatter removed from current law appears [in brackets and struckthrough.]
\t\tMatter which is either (a) all new or (b) repealed and reenacted appears in regular type.
\t16-2982
\t10/09
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Sixteen
AN ACT\trelative to expense deductions under the business profits tax.
Be it Enacted by the Senate and House of Representatives in General Court convened:
\t1 Business Profits Tax; Expense Deductions. Amend RSA 77-A:3-a to read as follows:
\t77-A:3-a Expense Deductions. Notwithstanding the definition of Internal Revenue Code in RSA 77-A:1, XX, in determining gross business profits before net operating loss and special deductions, a business organization shall calculate expense deductions [not to exceed $25,000] as permitted under Internal Revenue Code section 179 using the current effective version of the United States Internal Revenue Code [in effect as of January 1, 2012].
\t2 Effective Date. This act shall take effect upon its passage.
\t\t\t\t\t\t\t\t\t\t\t16-2982
\t\t\t\t\t\t\t\t\t\t\t1/25/16
SB 552-FN- FISCAL NOTE
AN ACT\trelative to expense deductions under the business profits tax.
FISCAL IMPACT:
The Department of Revenue Administration states this bill, as introduced, will decrease state general fund and education trust fund revenue by an indeterminable amount in FY 2017 and each year thereafter. There is no impact on county and local revenue or state, county and local expenditures.
METHODOLOGY:
The Department of Revenue Administration states this bill amends RSA 77-A:3-a by removing the $25,000 maximum Internal Revenue Code section 179 expense reduction allowed under the New Hampshire business tax. The bill allows taxpayers to use the current Internal Revenue Code section 179 maximum deduction which is $500,000. This will result in taxpayers being entitled to a larger section 179 deduction on their New Hampshire business tax return. The Department is not able to determine the potential future loss of revenue resulting from the proposed bill. However the Department is able to show the potential decrease in revenue for Tax Year 2013 if this bill had been effect. The amount of each taxpayer's federal Internal Revenue Code section 179 deduction was multiplied by the taxpayer's apportionment percentage and then multiplied by the tax rate of 8.5% to calculate a maximum decrease in state general fund and education trust fund revenue of $13,851,940. The Department states it could administer this bill within its budget.