Bill Text: NH HB623 | 2019 | Regular Session | Amended


Bill Title: Relative to the rates of the business profits tax and business enterprise tax.

Spectrum: Partisan Bill (Democrat 10-0)

Status: (Introduced) 2019-03-27 - Retained in Committee [HB623 Detail]

Download: New_Hampshire-2019-HB623-Amended.html

HB 623-FN-A - AS AMENDED BY THE HOUSE

 

28Feb2019... 0416h

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

 

─────────────────────────────────────────────────────────────────

 

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.

 

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

 

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

28Feb2019... 0416h 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  RSA 77-A:2 is repealed and reenacted to read as follows: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 7.9 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  RSA 77-E:2 is repealed and reenacted to read as follows: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 .675 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  The following are repealed: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

Amended 3/12/19

 

HB 623-FN-A- FISCAL NOTE

AS AMENDED BY THE HOUSE (AMENDMENT #2019-0416h)

 

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 sets the Business Profits Tax rate at 7.9 percent and the Business Enterprise Tax rate at 0.675 percent and repeals the rate reductions contained in Chapter 156, Laws of 2017.  This bill is applicable for taxable periods ending on or after December 31, 2019.

 

The Department of Revenue Administration states the fiscal impact is indeterminable as the Department is not able to predict future business tax revenue.  Based on the following assumptions, the Department is able to estimate a possible fiscal impact:

  • the current 2019 and 2021 rate reductions would have been in effect for FY 2020 through FY 2023;
  • the FY 2018 cash basis business tax revenue of $775,900,000 (BET: $297,100,000 + BPT:$478,800,000) is the starting point for calculating the fiscal impact;
  • based on a tax year revenue analysis of FY 2018 revenue, 13 percent is attributable to tax year 2016, 64 percent is attributable to tax year 2017, and 23 percent is attributable to tax year 2018; and
  • applying the split to FY 2018 revenue as well as applying the applicable rates creates a base of $47,786,625,316 (BET:$41,896,601,852 + BPT:$5,890,023,464)  to use for the starting point of the calculating the fiscal impact.

 

Applying the applicable tax rates results in the following impact:

Fiscal Year

FY 2018 Revenue with Current Law's 2019 and 2021 Rate Reductions

FY 2018 Revenues with Proposed Rate Increases

Estimated Fiscal Impact Per Year (proposed legislation compared to current law)

2020

 $710,527,743

 $748,113,916

 $37,586,173

2021

 $692,565,789

 $748,113,916

 $55,548,127

2022

 $658,212,733

 $748,113,916

 $89,901,183

2023

 $651,234,769

 $748,113,916

 $96,879,147

 

The Department notes that future revenue may be overstated or understated for future fiscal years depending on whether actual revenue is more or less than FY 2018.

   

AGENCIES CONTACTED:

Department of Revenue Administration

 

feedback