Revision: Nov. 20, 2017, 1:49 p.m.
HB 1758-FN - AS INTRODUCED
2018 SESSION
18-2448
10/03
HOUSE BILL 1758-FN
AN ACT establishing a credit against business taxes for paid maternity and paternity leave.
SPONSORS: Rep. Dyer, Hills. 37
COMMITTEE: Ways and Means
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ANALYSIS
This bill establishes a paid maternity and paternity leave credit against the business profits tax and the business enterprise tax administered by the department of business and economic affairs.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
18-2448
10/03
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Eighteen
AN ACT establishing a credit against business taxes for paid maternity and paternity leave.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 New Paragraph; Business Profits Tax; Paid Maternity and Paternity Leave Tax Credit. Amend RSA 77-A:5 by inserting after paragraph XV the following new paragraph:
XVI. The unused portion of any paid maternity and paternity leave tax credit awarded by the commissioner under RSA 77-E:3-e.
2 New Section; Business Enterprise Tax; Paid Maternity and Paternity Leave Tax Credit. Amend RSA 77-E by inserting after section 3-d the following new section:
77-E:3-e Paid Maternity and Paternity Leave Tax Credit.
I. There shall be a tax credit in the amount of 50 percent of the payments made by the business enterprise to an employee as paid maternity or paternity leave as certified by the commissioner of business and economic affairs under RSA 162-S:2.
II. 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.
III. For the purpose of the credit allowed under this section, the paid maternity and paternity leave tax credit shall be considered taxes paid under RSA 77-E.
IV. The aggregate of tax credits issued by the commissioner to all taxpayers claiming the credit shall not exceed $10,000,000 for any fiscal year.
3 New Chapter; Paid Maternity and Paternity Leave Tax Credit. Amend RSA by inserting after chapter 162-R the following new chapter:
CHAPTER 162-S
PAID MATERNITY AND PATERNITY LEAVE TAX CREDIT
162-S:1 Definitions. In this chapter, “paid maternity and paternity leave" means wages paid to an employee during leave time directly before and after childbirth or adoption to care for the employee's newborns or young children.
162-S:2 Approval and Certification. The commissioner of the department of business and economic affairs, in consultation with the commissioner of the department of revenue administration, shall develop application forms with which taxpayers may apply for the paid maternity and paternity leave tax credit. The forms shall be submitted by taxpayers to the commissioner of the department of business and economic affairs, and the commissioner shall approve or deny such application and certify to the commissioner of the department of revenue administration the total credit amount awarded to each business organization that has paid maternity or paternity leave to its employees. In each fiscal year the total amount of credits certified shall not exceed $10,000,000.
4 Applicability. Sections 1-3 of this act shall apply for tax periods ending after January 1, 2019.
5 Effective Date. This act shall take effect July 1, 2018.
18-2448
11/17/17
HB 1758-FN- FISCAL NOTE
AS INTRODUCED
AN ACT establishing a credit against business taxes for paid maternity and paternity leave.
FISCAL IMPACT: [ X ] State [ ] County [ ] Local [ ] None
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| Estimated Increase / (Decrease) | |||
STATE: | FY 2019 | FY 2020 | FY 2021 | FY 2022 |
Appropriation | Indeterminable Decrease | Indeterminable Decrease | Indeterminable Decrease | Indeterminable Decrease |
Revenue | $0 | $0 | $0 | $0 |
Expenditures | $104,000 | $86,000 | $89,000 | $93,000 |
Funding Source: | [ X ] General [ X ] Education [ ] Highway [ ] Other | |||
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METHODOLOGY:
This bill establishes an aggregate credit of $10 million in any fiscal year against business taxes for 50 percent of the payments made by a business enterprise to an employee as paid maternity or paternity leave as certified by the commissioner of the Department of Business and Economic Affairs. The bill allows the credit to be applied to the Business Enterprise Tax and be considered taxes paid. As a result, any credit that is used to offset the Business Enterprise Tax will also offset a taxpayer's Business Profits Tax liability, if any. Additionally, any credit that cannot be used to offset Business Enterprise Tax shall then be applied to the Business Profits Tax. Unused portions of the credit shall be carried forward for up to 5 years. The Department of Revenue is unable to determine the exact decrease in State General Fund and Education Trust Fund revenue resulting from this bill, as the Department has no information on how many taxpayers will request or utilize this tax credit or if any amounts will be carried forward. The maximum revenue decrease in FY 2019 would be $10 million, however in later years the revenue decrease would not be limited to $10 million due to the ability to carry credits forward for up to 5 years.
The Department of Revenue would need to update all necessary tax return forms and electronic management systems related to this bill. However, the Department anticipates it will be able to absorb any expenses associated with this bill within its operating budget.
The Department of Business and Economic Affairs states its is unable to estimate the number of applications that may be filed, nor the time and information that will be required to process the applications. The Department assumes the work associated with this tax credit would necessitate a full-time program specialist III (LG 23) with salary and benefits of $74,000 in FY 2019, $76,000 in FY 2020, $79,000 in FY 2021 and $83,000 in FY 2022. Additionally, the Department estimates promotional materials and website costs in year 1 of $30,000 and $10,000 each year thereafter. It is anticipated these expenditures would be paid by the State General Fund.
AGENCIES CONTACTED:
Department of Revenue Administration and Department of Business and Economic Affairs