Bill Text - HB623 (2020)

Relative to the rates of the business profits tax and business enterprise tax.


Revision: Jan. 16, 2019, 8:50 a.m.

HB 623-FN-A - AS INTRODUCED

 

 

2019 SESSION

19-0689

10/08

 

HOUSE BILL 623-FN-A

 

AN ACT relative to the rates of the business profits tax and business enterprise tax.

 

SPONSORS: Rep. Almy, Graf. 13; Rep. Mombourquette, Hills. 5; Rep. Schultz, Merr. 18; Rep. Fellows, Graf. 8; Rep. Horrigan, Straf. 6; Rep. T. Smith, Hills. 17; Rep. Edgar, Rock. 21; Rep. Porter, Hills. 1; Rep. Herbert, Hills. 43; Rep. Cloutier, Sull. 10

 

COMMITTEE: Ways and Means

 

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ANALYSIS

 

This bill establishes the rates of the business profits tax and the business enterprise tax for taxpayer tax years ending on or after December 31, 2019 and for subsequent tax years, and repeals rate reductions effective in 2021.

 

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

19-0689

10/08

 

STATE OF NEW HAMPSHIRE

 

In the Year of Our Lord Two Thousand Nineteen

 

AN ACT relative to the rates of the business profits tax and business enterprise tax.

 

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

 

1  Business Profits Tax; Imposition of Tax; 2019.  RSA 77-A:2 is repealed and reenacted to read as follows:

77-A:2  Imposition of Tax.  A tax is imposed at the rate of 8.5 percent upon the taxable business profits of every business organization.

2  Business Enterprise Tax; Imposition of Tax; 2019.  RSA 77-E:2 is repealed and reenacted to read as follows:

77-E:2  Imposition of Tax.  A tax is imposed at the rate of .50 percent upon the taxable enterprise value tax base of every business enterprise.

3  Repeal of Prospective Amendments.  The following are repealed:

I.  2017, 156:215; relative to the rate of the business profits tax in 2021.

II.  2017, 156:216; relative to the rate of the business enterprise tax in 2021.

III.  2017, 156:217, II, relative to the applicability of the 2021 rates changes.

4  Applicability.  Sections 1 and 2 of this act shall apply to taxable periods ending on or after December 31, 2019.

5  Effective Date.  This act shall take effect 60 days after its passage.

 

LBAO

19-0689

1/7/19

 

HB 623-FN-A- FISCAL NOTE

AS INTRODUCED

 

AN ACT relative to the rates of the business profits tax and business enterprise tax.

 

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

 

 

 

Estimated Increase / (Decrease)

STATE:

FY 2020

FY 2021

FY 2022

FY 2023

   Appropriation

$0

$0

$0

$0

   Revenue

Indeterminable Increase

Indeterminable Increase

Indeterminable Increase

Indeterminable Increase

   Expenditures

$0

$0

$0

$0

Funding Source:

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

 

 

 

 

 

METHODOLOGY:

This bill increases the business profits tax rate for taxable periods ending on or after December 31, 2019 from 7.7 percent to 8.5 percent and reduces the business enterprise tax rate for taxable periods ending on or after December 31, 2019 from 0.6 percent to 0.5 percent.  The bill also repeals prospective decreases in the business profits and business enterprise taxes in 2021.  The exact fiscal impact of this bill cannot be determined, however the Department is able to provide an estimate based on the following assumptions:

  • business tax rate reductions for taxable periods ending on or after December 31, 2019 and December 31, 2021 would have been in effect for FY 2020 through FY 2023,
  • the FY 2018 cash basis revenue of $775,900,000 is the starting point to calculate an estimated fiscal impact, and
  • tax year revenue collected is allocated to each fiscal year's revenue based on the proportionate amount of revenue anticipated to be received,

 

It should be noted the fiscal impact of the proposed rate reductions may vary for future fiscal years depending on whether actual revenue is more or less than the FY 2018 revenue amount  The table below summarizes the Department's analysis:

 

 

 

 

Fiscal Impact of Rate Reductions by Fiscal Year

 

Fiscal Year

FY 18 Revenue with Current BPT and BET Rate Reductions Applied

FY 18 Revenue with New BPT Rate Increase  and BET Rate Reduction

Difference

FY20

$710,527,743

$717,369,371

$6,841,629

FY21

$692,565,789

$710,135,004

$17,569,215

FY22

$658,212,733

$710,135,004

$51,922,270

FY23

$651,234,769

$710,135,004

$58,900,235

 

 

AGENCIES CONTACTED:

Department of Revenue Administration