HB472: establishing a tax on the sale of permissible fireworks.

HB 472-FN-A – AS INTRODUCED

2009 SESSION

09-0430

09/10

HOUSE BILL 472-FN-A

AN ACT establishing a tax on the sale of permissible fireworks.

SPONSORS: Rep. Burridge, Ches 3

COMMITTEE: Ways and Means

ANALYSIS

This bill establishes a tax on the sale of permissible fireworks. A portion of the revenues from the tax shall be deposited in the fire standards training and emergency medical services fund.

This bill was requested by the department of safety.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

09-0430

09/10

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Nine

AN ACT establishing a tax on the sale of permissible fireworks.

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

1 New Chapter; Tax on Fireworks. Amend RSA by inserting after chapter 77-E the following new chapter:

CHAPTER 77-F

TAX ON PERMISSIBLE FIREWORKS

77-F:1 Definitions. In this chapter:

I. “Commissioner” means the commissioner of revenue administration.

II. “Department” means the department of revenue administration.

III. “Permissible Fireworks” means permissible fireworks as defined in RSA 160-C:1, V.

IV. “Retailer” means any person in this state engaged in the business of making sales of fireworks to consumers or other retailers.

77-F:2 Tax on Permissible Fireworks. A tax on the retail sale of permissible fireworks shall be levied at a rate of 8 percent.

77-F:3 Conformity to Laws. It is the intention of this chapter, and it shall be construed, anything contained in this chapter to the contrary notwithstanding, not to impose any tax on permissible fireworks in violation of the Constitution of the United States or in violation of any constitutional federal laws, or in violation of the constitution of this state, or in violation of any contractual obligations of exemption from taxation established prior to May 4, 1923, by the state or any of its political subdivisions or by the United States.

77-F:4 Who Taxable.

I. Every seller of permissible fireworks in this state during each calendar year shall be required by the department and shall pay to the department an annual tax in the percentage established in RSA 77-F:2 on each sale of permissible fireworks.

II. In the case of sales between retailers, the tax shall be paid only once with respect to each item.

77:F-5 Deductions. Each licensed retailer is entitled to take an annual deduction from the retailer’s tax payable in the amount of the license fee paid under RSA 160-C:3, VII.

77-F:6 Fiscal Year; Returns and Declarations.

I. Returns of taxes shall be made to the commissioner on or before February 1 of each year for sales made during the prior calendar year, beginning on February 1, 2011, for sales made between January 1, 2010 and December 31, 2010.

II. The commissioner shall adopt rules pursuant to RSA 541-A relative to the prescribed form for filing returns under this chapter. Returns required by this chapter shall be made under the penalty of perjury.

77-F:7 Extension of Time for Returns. For good cause, the commissioner may extend the time within which a taxpayer is required to file a return, and if such return is filed during the period of extension no penalty may be imposed for failure to file the return at the time required by this chapter, but the taxpayer shall be liable for interest and late payment charges as prescribed in RSA 21-J:28, RSA 21-J:32, or RSA 21-J:33. Failure to file the return within the period of extension shall void the extension.

77-F:8 Inspections. Returns shall not be open to the inspection of any person except the commissioner and the commissioner’s deputies, assistants, and clerks when acting under his or her authority; provided, that a properly authorized representative of the federal Internal Revenue Bureau may inspect such returns if reciprocal inspection of New Hampshire returns in that bureau is permitted to the commissioner of revenue administration or his representatives, and further provided that the commissioner and the state fire marshal and his or her deputies and assistants may consult and share information likely to uncover fraudulent reporting. The state fire marshal and his or her deputies and assistants shall not disclose any information shared by the department to any other person.

77-F:9 Information as to Filing of Returns. The commissioner shall, on the request of any inhabitant of the state, state the fact whether or not any person has filed a permissible fireworks tax return for the current or any prior year.

77-F:10 Interest. Any taxpayer who fails to make payment with a return when due shall be subject to interest computed as prescribed in RSA 21-J:28.

77-F:11 To Whom Payable. All taxes under this chapter shall be paid to the commissioner by the taxpayer.

77-F:12 Reassessment by Department. The department shall reassess the amount of the tax in every case in which it appears in the examination of the returns that the amount paid is either higher or lower than the actual tax due. The department shall notify the taxpayer of any corrections made. If the department determines a deficiency, the amount of said deficiency and interest as prescribed in RSA 21-J:28 shall be forwarded by the taxpayer to the department within 15 days from the date of the required notice. If the reassessment results in a determination of overpayment, the amount of the excess shall be repaid to the taxpayer in the manner provided by RSA 21-J:28-a. All assessments made under this section shall be subject to the right of appeal as provided in RSA 21-J:28-b, and nothing contained in this section shall be construed to limit the power of the commissioner to make a later assessment under RSA 21-J:29 and to seek penalties for fraudulent returns as provided in RSA 77-F:14.

77-F:13 Corrections. Each taxpayer shall report to the commissioner any change in the amount of permissible fireworks sales as defined by RSA 77-F:6 as finally determined by the United States Internal Revenue Service with respect to any sales for which the taxpayer has made a return under this chapter. Such a report shall be made no later than 6 months after the taxpayer has received notice that such change has been finally determined. Notwithstanding any other provision of law, a taxpayer reporting a correction pursuant to this section shall be given notice by the department of any adjustment to the tax due with respect to such correction within 6 months after the filing of the report.

77-F:14 Penalty; Fraudulent or Incorrect Return. For purposes of the application of RSA 21-J:31 to this chapter, if a return is not filed when due and the failure to file a return when due is not a violation of RSA 21-J:39, then neither the $10 nor the $50 alternate penalties of RSA 21-J:31 shall apply to the return.

77-F:15 Expenses of Administration. The expense of administration of this chapter shall be paid out of the taxes collected under this chapter.

77-F:16 Disposal of Papers. The commissioner may destroy any tax returns on file with the department for more than 4 years which, in the commissioner’s opinion, are no longer of any value to the state.

77-F:17 Taxpayer Records.

I. Every taxpayer shall:

(a) Keep such records as may be necessary to determine the amount of the taxpayer’s liability under this chapter.

(b) Preserve such records for the period of 3 years or until any litigation or prosecution under this chapter is finally determined.

(c) Make such records available for inspection by the commissioner or his or her authorized agents, upon demand, at reasonable times.

II. Whoever violates the provisions of this section shall be subject to the penalties imposed under RSA 21-J:39.

77-F:18 Distribution of Revenue. The department of revenue administration shall forward taxes, interest, and penalties received under this chapter to the state treasurer, 75 percent of which shall be deposited in the fire standards and training and emergency medical services fund established in RSA 21-P:12-d and used to support the budget of the division of fire safety, and 25 percent of which shall be deposited in the general fund as unrestricted funds.

2 Effective date. This act shall take effect on January 1, 2010.

LBAO

09-0430

01/16/09

HB 472-FN-A - FISCAL NOTE

AN ACT establishing a tax on the sale of permissible fireworks.

FISCAL IMPACT:

The Department of Safety states this bill may increase state restricted revenue by $468,000 in FY 2011 and each fiscal year thereafter. The Department of Safety states this bill may increase state general fund revenue by $156,000 in FY 2011 and each fiscal year thereafter. The Department of Revenue Administration states this bill will increase state restricted revenue and expenditures and state general fund revenue by an indeterminable amount in FY 2011 and each fiscal year thereafter. There will be no fiscal impact on county and local revenue and expenditures.

METHODOLOGY:

The Department of Safety states this bill establishes an 8% tax on the annual calendar year gross sales of permissible fireworks, effective January 1, 2010. Taxes are payable to the state by February 1 of the following year. The first payments would be received on February 1, 2011 for the calendar year ending December 31, 2010. The Department of Revenue Administration would collect the tax, and would forward the taxes, interest, and penalties collected to the Treasurer who would deposit 75% in the fire standards and training and emergency medical services fund (fire & EMS fund) and 25% in the general fund. The Department of Safety states this bill will have no fiscal impact on Department expenditures. The Department states there are 26 license retail sales outlets, and the estimated average gross sales of fireworks for each outlet is $300,000, for total estimated annual sales of $7,800,000. An 8% tax would produce estimated annual revenue of $624,000 ($7,800,000 x 0.08), with $468,000 (75%) deposited in the fire & EMS fund and $156,000 (25%) in the general fund.

The Department of Revenue Administration states it is unable to determine the increase in state restricted and general fund revenue from a tax on the sale of permissible fireworks. The Department states its expenditures related to the administration of this bill would be funded by the fireworks tax. The Department states it would incur costs before any tax is collected for writing rules, creating forms and publications, computer programming, and staff for processing returns. This bill does not establish any new positions at the Department of Revenue Administration.