HB539 (2017) Detail

Relative to the distribution of occupancy revenues under the meals and rooms tax to towns and cities.


HB 539-FN-A-LOCAL - AS INTRODUCED

 

 

2017 SESSION

17-0416

10/09

 

HOUSE BILL 539-FN-A-LOCAL

 

AN ACT relative to the distribution of occupancy revenues under the meals and rooms tax to towns and cities.

 

SPONSORS: Rep. Tucker, Coos 5; Rep. Richardson, Coos 4; Sen. Woodburn, Dist 1

 

COMMITTEE: Ways and Means

 

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ANALYSIS

 

This bill requires the department of revenue administration to distribute a portion of the revenue collected from occupancies under the meals and rooms tax to towns and cities in proportion to the total amount of such taxes collected in the state.  The bill also repeals the option to consolidate reporting of such taxes in 2018.

 

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

17-0416

10/09

 

STATE OF NEW HAMPSHIRE

 

In the Year of Our Lord Two Thousand Seventeen

 

AN ACT relative to the distribution of occupancy revenues under the meals and rooms tax to towns and cities.

 

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

 

1  New Subparagraph; Department of Revenue Administration; Confidentiality; Exclusions.  Amend RSA 21-J:14, IV by inserting after subparagraph (c) the following new subparagraph:

(d)  Disclosure of the total amount of revenue collected under RSA 78-A:6, I for occupancies under the meals and rooms tax in each municipality pursuant to RSA 78-A:19-a.

2  New Section; Tax on Meals and Rooms; Disclosure.  Amend RSA 78-A by inserting after section 19 the following new section:

78-A:19-a  Collection and Disclosure of Revenue Information.  The department shall collect information about the revenue collected from occupancies pursuant to RSA 78-A:6, I under the meals and rooms tax in each municipality necessary to  determine the total amount of such meals and rooms tax occupancy revenue collected in each municipality.  The department shall make its determination of the total amount of meals and room tax occupancy revenue collected in a municipality available, upon written request, to the members of the New Hampshire senate and house of representatives representing such municipality, except where such municipality has 10 or fewer operators collecting meals and rooms taxes on occupancy.

3  Meals and Rooms Tax; Distribution.  Amend RSA 78-A:26, I and II to read as follows:

I.  Beginning on July 1, 1995, and for each fiscal year thereafter, the department shall pay over all revenue, except revenues identified in paragraph III of this section, collected under this chapter to the state treasurer.  On or before September 15 of each year, the department shall determine the cost of administration of this chapter for the fiscal year ending on the preceding June 30, and it shall notify the state treasurer of these costs by a report certified by them as to correctness.  After deducting the cost of administration of the chapter from the total income, the state treasurer shall distribute the net income as follows:

(a)  The amount necessary to provide payments of principal and interest on the bonds and notes authorized under RSA 198:15-a, II for the fiscal years ending June 30, 2009 through June 30, 2030;

(b)  An amount equal to 3.15 percent of the net income distributed under the introductory paragraph of paragraph I and subparagraph I(a) in the first year of the preceding fiscal biennium, which shall be credited to the department of resources and development, division of travel and tourism development;

(c)  Forty percent of the net income under the introductory paragraph of paragraph I of the most recent fiscal year to the unincorporated towns, unorganized places, towns, and cities.  The amount to be distributed to each such town, place, or city shall be determined by multiplying the amount to be distributed by a fraction, the numerator of which shall be the population of the unincorporated town, unorganized place, town or city and the denominator of which shall be the population of the state.  The population figures shall be based on the latest resident population figures furnished by the office of energy and planning; [and]

(d)  For any year in which there is a net amount to be distributed under subparagraph (c), the amount collected during the most recent fiscal year which was derived from the tax on occupancies under RSA 78-A:6, I shall be distributed to the unincorporated towns, unorganized places, towns, and cities.  The amount to be distributed to each such town, place, or city shall be determined by multiplying the amount to be distributed by a fraction, the numerator of which shall be the amount determined by the department of revenue administration to have been collected by operators collecting the tax on occupancies in the unincorporated town, unorganized place, town, or city and the denominator of which shall be the total amount of net income derived from the tax on occupancies under RSA 78-A:6, I for most recent fiscal year.  For purposes of this subparagraph, operators shall report to the department the amount of tax collected from the tax on occupancies under RSA 78-A:6, I within each unincorporated town, unorganized place, town, or city on a form as set forth in rules adopted by the commissioner under RSA 78-A:2, II; and

(e)  The remainder to the general fund.

II.  Each fiscal year, the amount to be distributed under subparagraph I(c) shall be equal to the prior year's distribution plus an amount equal to 75 percent of any increase in the income received from the meals and rooms tax for the fiscal year ending on the preceding June 30[, not to exceed $5,000,000,] until such time as the total amount distributed annually is equal to the amount indicated in subparagraph I(c).

4  Meals and Rooms Tax; Collection; Information Required.  Amend RSA 78-A:7, II-IV  to read as follows:

II.  Each operator shall keep books and records in a form acceptable to the department showing the amount of [all] each of the taxes collected under RSA 78-A:6 and the town or city in which such taxes were collected.  The operator shall pay the taxes over to the state as provided in this section.  If the department believes that special action is necessary because payment of taxes collected may be in jeopardy, it may direct an operator to keep all taxes collected separate from any other funds.  The department may require that the taxes be periodically deposited in a bank designated by the department, in an account in the name of the department.  The department may withdraw these tax collections from the bank account and apply them to the payment of the taxes due from the operator.  When an operator commingles tax money with money belonging to him, the claim of the state for the tax is traceable, is enforceable against all other claims and takes precedence over all other claims against the commingled funds.  No taxes collected by an operator under this chapter may be sent outside the state without the written consent of the department.

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 percent of the taxes due 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.

IV.  In lieu of keeping detailed records of taxes collected, and in lieu of payment of the taxes collected under this chapter, an operator may, in writing, elect to compute the amount of taxes due at 9 percent of the total taxable rent, charge for meals, or gross rental receipts received by it, or both, exclusive of the taxes collected on such rents, charges, and gross rental receipts, provided the operator identifies the percentage of such amounts received within each town or city in which the operator does business and the percentage for each tax collected under RSA 78-A:6.  If this election is made, the operator may not change the method of computing taxes without the written consent of the department.  Any balance of the tax remaining in possession of the operator may be retained by it.

5  Department of Revenue Administration; Rulemaking Required.  The commissioner shall adopt by rule pursuant to RSA 541-A new or amended rules and forms as necessary to accommodate the reporting requirements for operators under RSA 78-A:7 and RSA 78-A:26, I(d).

6  Repeal; 2018.  RSA 78-A:7, IV, relative to the option to consolidate operator collection records of meals and rooms tax receipts, is repealed.

7  Effective Date.

I.  Section 6 of this act shall take effect July 1, 2018.

II.  The remainder of this act shall take effect July 1, 2017.

 

LBAO

17-0416

1/12/17

 

HB 539-FN-A-LOCAL- FISCAL NOTE

AS INTRODUCED

 

AN ACT relative to the distribution of occupancy revenues under the meals and rooms tax to towns and cities.

 

FISCAL IMPACT:      [ X ] State              [    ] County               [    ] Local              [    ] None

 

 

 

Estimated Increase / (Decrease)

STATE:

FY 2018

FY 2019

FY 2020

FY 2021

   Appropriation

$0

$0

$0

$0

   Revenue

Indeterminable

Indeterminable

Indeterminable

Indeterminable

   Expenditures

Indeterminable Increase

$0

$0

$0

Funding Source:

  [ X ] General            [    ] Education            [    ] Highway           [    ] Other

 

 

 

 

 

LOCAL:

 

 

 

 

   Revenue

Indeterminable

Indeterminable

Indeterminable

Indeterminable

   Expenditures

$0

$0

$0

$0

 

METHODOLOGY:

This bill amends the meals and rooms tax distribution to eliminate the $5,000,000 cap on any year over year increase in the 40 percent distribution and includes a provision to distribute the entire amount of the tax on occupancies back to municipalities based upon the proportion of total revenue collected from occupancies attributable to each municipality.  The bill also requires operators to record sufficient information to show the amount of each tax collected and the municipality where the taxable transaction occurred.  Operators who elect to adopt tax inclusive sales must report sales allocated based on transaction type and municipality where each type of transaction occurred.  The bill also amends RSA 21-J relative to Department's confidentiality provision to allow the Department to disclose meals and rooms tax revenue collected on occupancies in each municipality to members of the NH Senate and House of Representatives, except where such municipality has 10 or fewer operators collecting meals and rooms tax on occupancy.  

 

The Department assumes the removal of the $5,000,000 cap would result in a decrease in state revenue and an increase on local revenue.  However, the Department is unable to predict future growth of meals and rooms tax revenue to determine whether the cap would be triggered in the future.  The Department would need to create forms, draft rules and incur vendor costs to update the e-file and telefile systems to accommodate the reporting required by this bill, resulting in indeterminable expenses exceeding $10,000 in FY 2018.

 

AGENCIES CONTACTED:

Department of Revenue Administration

 

 

Links

HB539 at GenCourtMobile

Action Dates

Date Body Type
Feb. 8, 2017 House Hearing
Feb. 14, 2017 House Hearing
Feb. 23, 2017 House Exec Session
March 8, 2017 House Floor Vote

Bill Text Revisions

HB539 Revision: 853 Date: Jan. 26, 2017, 8:16 a.m.

Docket

Date Status
Jan. 5, 2017 Introduced 01/05/2017 and referred to Ways and Means HJ 3 P. 17
Feb. 8, 2017 ==RECESSED== Public Hearing: 02/08/2017 10:30 AM LOB 202
Feb. 14, 2017 ==CONTINUED== Public Hearing: 02/14/2017 10:30 AM LOB 202
Feb. 23, 2017 Executive Session: 02/23/2017 LOB 202
March 8, 2017 Committee Report: Inexpedient to Legislate for 03/08/2017 (Vote 23-0; CC)
March 8, 2017 Inexpedient to Legislate: MA VV 03/08/2017 HJ 9 P. 49