HB1565 (2020) Detail

Relative to information on meals and rooms tax revenues in each municipality and requiring direct payment of certain revenues to municipalities.


HB 1565-FN - AS INTRODUCED

 

 

2020 SESSION

20-2407

10/03

 

HOUSE BILL 1565-FN

 

AN ACT relative to information on meals and rooms tax revenues in each municipality and requiring direct payment of certain revenues to municipalities.

 

SPONSORS: Rep. Loughman, Rock. 21; Rep. Stringham, Graf. 5; Rep. Schamberg, Merr. 4; Rep. Cushing, Rock. 21; Sen. Sherman, Dist 24; Sen. Fuller Clark, Dist 21

 

COMMITTEE: Ways and Means

 

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ANALYSIS

 

This bill requires the department of revenue administration to collect information from operators collecting taxes under the meals and rooms tax on the location of the town, city, or unincorporated place where revenues were collected.  The bill also requires that operators collecting the meals and rooms taxes pay 1/9 of the revenues directly to the treasurer of the town, city, or unincorporated place in which a place of business is located.

 

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

20-2407

10/03

 

STATE OF NEW HAMPSHIRE

 

In the Year of Our Lord Two Thousand Twenty

 

AN ACT relative to information on meals and rooms tax revenues in each municipality and requiring direct payment of certain revenues to municipalities.

 

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

 

1  New Subparagraph; Department of Revenue Administration; Department Records; Disclosure.  Amend RSA 21-J:14, V by inserting after subparagraph (h) the following new subparagraph:

(i)  The department shall make available the total amount of revenue collected from occupancies, taxable meals, and gross rental receipts under the meals and rooms tax in each town, city, or unincorporated place pursuant to RSA 78-A:19-a.

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

78-A:19-a  Collection and Disclosure of Revenue Information.  

I.  The department shall acquire from operators the necessary information on the revenue collected due to occupancies, taxable meals, and gross rental receipts under this chapter in each town, city, or unincorporated place to determine the total amount of meals and rooms tax revenue collected due to occupancies, taxable meals, and gross rental receipts in each town, city, or unincorporated place.  

II.  The department shall make its determination of the total amount of meals and room tax revenue collected due to occupancies, taxable meals, and gross rental receipts under this chapter in each town, city, or unincorporated place in this state and annually provide the information in a report to the chairpersons of the house and senate ways and means committees.  When issued, the report shall be a public document.

III.  The department shall make available to operators information for the electronic deposit or other payment of the one percent of tax collected to the town or city treasurer and procedures for verification of such payments.

3  Imposition of Tax.  Amend RSA 78-A:6, III to read as follows:

III.  The operator shall collect the taxes imposed by this section and shall pay them over [to the state] as provided in this chapter.

4  Advanced Deposits; Occupancy.  Amend RSA 78-A:6-d, IX to read as follows:

IX.  Advance deposits which are forfeited by a prospective occupant shall not be taxed under this chapter.  However, if such advance deposit is a payment in full for a room rent, including tax, and is retained by the operator, the operator shall remit that portion of the payment which represents the meals and rooms tax to the state and the appropriate treasurer of the town, city, or unincorporated place.

5  Meals and Rooms Tax; Collection; Information Required.  Amend RSA 78-A:7, II 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, city, or unincorporated place 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 or her, 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.

II-a.  At the time an operator makes a payment to the state, the operator shall pay 1/9th of the meals and rooms taxes collected for taxable transactions at each place of business within the state where it operates to the respective treasurer of the town, city, or unincorporated place  for the town or city in which a taxable transaction occurred.

6  Returns.  Amend RSA 78-A:8, II to read as follows:

II.  The taxes collected by every operator shall be paid to the state and the appropriate treasurer of the town, city, or unincorporated place, on or before the fifteenth day of the calendar month following their collection.  The operator may deduct from the state remittance of taxes collected the compensation allowed by RSA 78-A:7, III, and remit the net taxes by electronic funds transfer to the commissioner of revenue administration. The return shall include all information required by the commissioner showing verification of payment of 1/9 of the taxes collected to the appropriate treasurer of the town, city, or unincorporated place.

7  Distribution of Revenues; Amount Reduced..  Amend RSA 78-A:26, I(c) to read as follows:

(c)  [Forty] Thirty-two and one-half 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 strategic initiatives; and

8  Effective Date.  This act shall take effect July 1, 2021.

 

LBAO

20-2407

Redraft 11/21/19

 

HB 1565-FN- FISCAL NOTE

AS INTRODUCED

 

AN ACT relative to information on meals and rooms tax revenues in each municipality and requiring direct payment of certain revenues to municipalities.

 

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

 

 

 

Estimated Increase / (Decrease)

STATE:

FY 2020

FY 2021

FY 2022

FY 2023

   Appropriation

$0

$0

$0

$0

   Revenue

$0

$0

Indeterminable Decrease

Indeterminable Decrease

   Expenditures

$0

$40,000

$0

$0

Funding Source:

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

 

 

LOCAL:

 

 

 

 

   Revenue

$0

$0

Indeterminable Increase

Indeterminable Increase

   Expenditures

$0

$0

Indeterminable Increase

Indeterminable Increase

 

METHODOLOGY:

This bill makes the following changes to the Meals and Rooms (M&R) Tax Law (RSA 78-A):

  • amends the Department of Revenue Administration's confidentiality statute (RSA 21-J:14) to require the Department obtain from operators collecting the meals and rooms tax revenue the location of the town, city and unincorporated place where the revenue was collected regardless of whether the information would identify particular operators/taxpayers.
  • at the time an operator makes a payment to the State, the operator shall pay 1/9th of the M&R taxes collected for taxable transactions to the respective treasurer of the town, city or unincorporated place in which a taxable transaction occurred.
  • the operator may only deduct 3% compensation/commission from the state's remittance of taxes collected and must keep books and reports showing the amount of each of the M&R taxes collected and the town, city or unincorporated place in which the taxes were collected.
  • the Department must make available to operators information for the electronic deposit or other payment of the 1% of tax collected to the town or city treasurer and procedures for verification of such payments.
  • the distribution of M&R tax revenues under RSA 78-A:26, I (c) is amended to reduce the amount distributed to unincorporated places, unorganized places, cities and towns from 40% to 32.5%.  

 

The Department states the changes in this bill will decrease State General Fund and Education Trust Fund revenue by an indeterminable amount.  The amount would be approximately 1/9th of the M&R taxes collected each year.  For illustrative purposes, if this bill had been in effect in FY 2019, state revenue would have decreased by $40.6 million and local revenue would have increased by $41.7 million.  The difference of approximately $1.1 million results from commissions.  Operators are only able to deduct a commission from the state remittance.  

 

The reduction to the municipal distribution from 40% to 32.5% does not have an impact as the amounts distributed have been below 40%.  In FY 2019 the M&R distribution under RSA 78-A:26, I (c) was approximately 21% and is anticipated to be at 19% for the FY 20-21 biennium.

 

The Department states it will incur costs to update the tax information management system for the additional reporting requirements.  The Department also assumes there would be an increase in local expenditures related to administration costs.

 

 

AGENCIES CONTACTED:

Department of Revenue Administration

 

Links

HB1565 at GenCourtMobile
HB1565 Discussion

Action Dates

Date Body Type

Bill Text Revisions

HB1565 Revision: 7218 Date: Dec. 3, 2019, 11:37 a.m.

Docket

Date Status
Jan. 8, 2020 To Be Introduced 01/08/2020 and referred to Ways and Means