House Democrats Block GOP Proposal to Suspend Business Tax Triggers
Last Wednesday, Democratic members of the House Rules Committee voted against the GOP's effort to eliminate a 2021 business tax increase in New Hampshire if revenues fall below target, according to Concord Monitor.
House Democrats stated that they need more information. State House Democrats and Republican Governor Chris Sununu agreed on a budget last year that passed a two-way trigger.
- If tax revenue was table business profits tax would stay at 7.7 percent through 2021.
- If tax revenue was 6 percent higher than expected, the tax rate would go down.
- If tax revenue was less than 6 percent, the tax rate would go up.
This plan was intended to allow sufficient revenue for the state while not overtaxing business. The pandemic has decimated business and forced closures. Republicans believe that, given the circumstances, taxes should not be raised due to lost revenues for businesses. Governor Sununu endorsed the rule change. “New Hampshire businesses are facing unprecedented losses,” said House Republican Leader Dick Hinch. “We have the ability to ease the burden on our state’s job creators by addressing the tax triggers in current law.”
Democrats want to see what revenues come out as before they suspend the trigger. The fiscal year for the tax hike trigger ends June 30, but the data won't be released until December in the state's Comprehensive Annual Financial Report. “For me it does not feel like this is the time for us to be changing what we voted on in the budget in September,” said Democratic Representative Mary Jane Wallner.
“Many businesses are in terrible straits, but I think it’s very unlikely that for those businesses in dire straits that the change in the tax rate that we’re talking about is going to make a material difference as to whether they open or not,” said Democratic Representative Lucy Weber. The vote failed 6-4, but will be voted on again in the future.