(The Center Square) – The New Hampshire House of Representatives will be considering a bill in the new session that would reduce the state's business taxes incrementally over the next two years.
House Speaker Sherman Packard, R-Londonderry, is sponsoring the legislation to lower the business profits tax rate by 0.2% and the business enterprise rate by 0.1% incrementally, the New Hampshire Business Review reported.
The profits tax would decrease to 7.6% in 2021 and then to 7.5% the next, while the enterprise rate would fall in 0.5% increments on the same schedule putting it at a final rate of 0.5% in 2022.
The Monitor reported the tax cut could lead to a $138 million decrease in revenue for the state if estimates from the Department of Revenue Administration using an analysis of 2020 fiscal year revenues are correct.
David Juvet, senior vice president of public policy at the Business and Industry Association (BIA) of New Hampshire, said the Granite State's business taxes are some of the country's highest, and they would support any reduction.
Juvet pointed out that businesses still remain in the grip of the COVID-19 crisis and in need of any help they can get.
"Businesses are really struggling in New Hampshire right now, so any effort to reduce the business taxes they pay I'm sure will be welcomed by the business community," he told The Center Square.
Reducing rates will also make the Granite State more attractive to outsiders and help fuel economic growth, he said.
"When businesses are looking for a place to grow or a place to move, there's a number of things that they look at – many of the things New Hampshire compares favorably well," Juvet said. "One area we don't compare well is the rate of our business taxes, which as I said are some of the highest in the country, so anything we can do to lower those will certainly help in attracting business to New Hampshire."
State Rep. Susan Almy, D-Lebanon, said the bill is risky, and if tax rates go down, state-funded services, which are important to businesses and employees, will be cut, the New Hampshire Business Review reported.
"I know it is a concern among some," said Juvet. "I think the rate reductions we're talking about here are very modest, and they're being phased in over a two-year period of time to reduce revenue impacts. I know the hope is that the economy will continue to grow which will further reduce or perhaps eliminate budgetary revenue impacts. But the bottom line is it's something we need to do for businesses here in New Hampshire."