HB 318-FN - AS INTRODUCED
2025 SESSION
25-0515
07/05
HOUSE BILL 318-FN
SPONSORS: Rep. Schamberg, Merr. 6
COMMITTEE: Ways and Means
-----------------------------------------------------------------
ANALYSIS
This bill increases the percentage of revenue from the business enterprise tax deposited in the education trust fund.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
25-0515
07/05
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Twenty Five
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Business Enterprise Tax; Distribution of Funds; Change in Percent of Revenue. Amend RSA 77-E:14, I to read as follows:
I. The commissioner shall determine [41] 59 percent of the revenue produced by the tax imposed by RSA 77-E:2 for each fiscal year and shall certify such amounts to the state treasurer by October 1 of that year for deposit in the education trust fund established by RSA 198:39.
2 Effective Date. This act shall take effect July 1, 2025.
25-0515
12/19/24
HB 318-FN- FISCAL NOTE
AS INTRODUCED
FISCAL IMPACT:
|
| |||||
Estimated State Impact | ||||||
| FY 2025 | FY 2026 | FY 2027 | FY 2028 | ||
Revenue | $0 | General Fund revenue will decrease and Education Trust Fund revenue will increase by an indeterminable amount; however total BET revenue collected does not change | ||||
Revenue Fund(s) | General Fund and Education Trust Fund | |||||
Expenditures* | $0 | $0 | $0 | $0 | ||
Funding Source(s) | None | |||||
Appropriations* | $0 | $0 | $0 | $0 | ||
Funding Source(s) | None | |||||
*Expenditure = Cost of bill *Appropriation = Authorized funding to cover cost of bill | ||||||
METHODOLOGY:
This bill increases the amount of Business Enterprise Tax (BET) deposited into the Education Trust Fund from 41% to 59% of the revenue collected. It is not known how much BET revenue will be collected each year to provide the fiscal impact of this bill. However, the Department of Revenue Administration is able to provide an estimate of the potential fiscal impact using the FY 2025 plan revenue of $377.7 million. Using the FY 2025 plan revenue and increasing the amount deposited into the Education Trust Fund from 41% to 59% will increase Education Trust Fund Revenue by $68 million and decrease General Fund Revenue by $68 million. See table 1 below:
Table 1: Business Enterprise Tax General Fund and Education Trust Fund Splits
Tax | FY 2025 Plan All Funds | Current Law | Proposed Law | Variance | |||
General Fund | Education Trust Fund | General Fund | Education Trust Fund | General Fund | Education Trust Fund | ||
BET | $377.7 | $222.9 | $154.8 | $154.9 | $222.8 | ($68.0) | $68.0 |
|
|
|
| ||||
Split | 59% | 41% | 41% | 59% | |||
It should be noted that the BET having a different split between the General Fund and the Education Trust Fund from the Business Profits Tax (BPT) may impact revenue reporting and result in incongruities between the reported fund splits in a given fiscal year and the actual splits being made at the time of the deposits. With the fund splits for both business taxes the same, reallocation between the two taxes does not require reallocation between the two funds. However, when the two taxes have different fund splits, a reallocation between taxes also requires a reallocation between funds. Adjustments are often made in a different fiscal year than the fiscal year that the revenue is received because most business taxpayers initially make quarterly estimated payments or payments on extension. In these cases, the Department has processes in place to split the revenue received between BPT and BET based on historical data. The final split between the two taxes is not known until the taxpayer files their return, which may be 9 to 18 months after receipt of the first estimate. Consequently, many reallocations occur in a different fiscal year than the fiscal year that the revenue is received. Because the BPT ETF split will remain unchanged at 41% but the BET ETF split will increase to 59%, any revenue initially overallocated to BET prior to receipt of the return will appear as a reduction to ETF revenue in a future fiscal year.
The bill will not result in any additional administrative costs that cannot be absorbed by the Department.
AGENCIES CONTACTED:
Department of Revenue Administration
| Date | Body | Type |
|---|---|---|
| Jan. 22, 2025 | House | Hearing |
Jan. 15, 2025: Public Hearing: 01/22/2025 02:00 pm LOB 202-204
Jan. 8, 2025: Introduced 01/08/2025 and referred to Ways and Means HJ 2