This page is an unofficial LFoD record and is not legal advice. Verify the document against the official source before relying on it.
HB15: relative to the rate of the business enterprise tax.
Bill details
Version history, amendments, and roll-call votes were not present in the imported local bill data.
Sponsors
- Jeanine M Notter House · Hills 12
- Jason M. Osborne House · Rock 2
- Steven Smith House · Sull 3
- Erica J Layon House · Rock 13
- Sherman A. Packard House · Rock 16
- Len P Turcotte House · Straf 4
- Maureen C. Mooney House · Hills 12
- Robert Healey House · Hills 12
- Judy Aron House · Sull 4
- James Spillane House · Rock 1
Topics
Official links
HB 15-FN - AS INTRODUCED
2023 SESSION
23-0118
02/10
HOUSE BILL 15-FN
AN ACT relative to the rate of the business enterprise tax.
ANALYSIS
This bill reduces the rate of the business enterprise tax for tax years ending on or after December 31, 2024.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
23-0118
02/10
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Twenty Three
AN ACT relative to the rate of the business enterprise tax.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 New Paragraph; Business Enterprise Tax; Rate Reduced 2024. Amend RSA 77-E:2 by inserting after paragraph II the following new paragraph:
III. For all taxable periods ending on or after December 31, 2024, a tax is imposed at the rate of 0.50 percent upon the taxable enterprise value tax base of every business enterprise.
2 Effective Date. This act shall take effect July 1, 2023.
LBA
23-0118
9/28/22
HB 15-FN- FISCAL NOTE
AS INTRODUCED
AN ACT relative to the rate of the business enterprise tax.
FISCAL IMPACT: [ X ] State [ ] County [ ] Local [ ] None
Estimated Increase / (Decrease)
STATE:
FY 2023
FY 2024
FY 2025
FY 2026
Appropriation
$0
$0
$0
$0
Revenue
$0
Indeterminable Decrease
Indeterminable Decrease
Indeterminable Decrease
Expenditures
$0
$0
$0
$0
Funding Source:
[ X ] General [ X ] Education [ ] Highway [ ] Other
METHODOLOGY:
This bill reduces the Business Enterprise Tax (BET) rate from 0.55% to 0.50% for taxable periods ending on or after December 31, 2024. The Department of Revenue Administration states the fiscal impact is indeterminable as the Department is not able to predict future BET tax revenue. Based on the following assumptions/information, the Department is able to estimate a possible fiscal impact:
the starting point for calculating the fiscal impact on FY 2024 thru FY 2026 revenues is the FY 2022 cash basis BET of $332,700,000.
based on a tax year revenue analysis of prior fiscal years, it was determined fiscal year tax revenue is comprised of 15 percent from the tax year 2 years ago, 63 percent is from the tax year 1 year ago and 22 percent from the current tax year (See table 1 below)
current law tax rates for Tax Years 2020 – 2021 included in FY 2023 revenue are 0.60% for BET. Pursuant to Chapter 91, Section 109-111, Laws of 2021 the BET rate is reduced from 0.6% to 0.55% for taxable periods ending on or after December 31, 2022 (Tax Year 2022) (See table 1 below).
applying the tax year revenue analysis splits for FY 2022 BET revenue as well as applying the applicable tax rates provides a taxable base of $56,559,000,000 to use for the starting point of calculating the fiscal impact.
The first table below provides the tax rates and splits. The second table provides an estimated impact the rate changes will have on revenue.
Table 1. Proposed Legislation Rates and Splits
(The proposed legislation would affect Tax Year 2024 and forward as indicated in shaded cells)
Fiscal Year
Tax Year
% Applicable to Tax Year
BET Rates
Fiscal Year 2022
Tax Year 2020
15%
0.60%
Tax Year 2021
63%
0.60%
Tax Year 2022
22%
0.55%
Fiscal Year 2023
Tax Year 2021
15%
0.60%
Tax Year 2022
63%
0.55%
Tax Year 2023
22%
0.55%
Fiscal Year 2024
Tax Year 2022
15%
0.55%
Tax Year 2023
63%
0.55%
Tax Year 2024
22%
0.50%
Fiscal Year 2025
Tax Year 2023
15%
0.55%
Tax Year 2024
63%
0.50%
Tax Year 2025
22%
0.50%
Fiscal Year 2026 and forward
Tax Year 2024 and forward
100%
0.50%
Table 2. BET Rate Change Fiscal Impact - Static Analysis
Fiscal Year
FY 2022 Revenues with Current Law
FY 2022 Revenues with Proposed Legislation's Decreased TY 24 Rates
Cumulative Fiscal Impact (Proposed Legislation Compared to Current Law)
2024
$311,074,500
$304,853,010
($6,221,490)
2025
$311,074,500
$287,036,925
($24,037,575)
2026
$311,074,500
$282,795,000
($28,279,500)
The fiscal impact of the proposed rate reduction as depicted in the above table may be overstated or understated for future years depending on whether actual revenue is more or less than the FY 2022 cash basis revenue.
Pursuant to RSA 77-E:14, BET revenue is deposited into the Education Trust Fund at a rate equal to the additional amounts of revenue produced "by an increase of 0.50 percent in the rate" of the BET tax. This is determined by dividing 0.50% by the current BET tax rate. In current law for taxable periods ending on or after December 31, 2022, 0.50% / 0.55% tax rate results in 90.91% of BET revenue being deposited into the Education Trust Fund, with the remaining amount staying in the General Fund. Under the proposed legislation for taxable periods ending on or after December 31, 2024, 0.50% / 0.50% proposed tax rate results in 100.00% of BET revenue being deposited into the Education Trust Fund.
The Department would need to update all necessary tax return forms and electronic management systems to reflect the change in the BET rate; however, it is not anticipated this will result in any additional administrative costs that could not be absorbed in the Department's operating budget.
AGENCIES CONTACTED:
Department of Revenue Administration