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House leadership pushes against Internet tax

State House Bureau

May 10. 2012 9:45PM

CONCORD - The House Ways and Means Committee Thursday tried to salvage a proposed prohibition on taxing Internet access.

The committee found a home for the prohibition, which the House killed Wednesday when it refused to agree to the Senate's version of House Bill 1652.

The bill originally would have put the state's $16 million surplus from the last biennium into the state's savings account or rainy day fund, but the Senate eliminated that provision and instead proposed the prohibition on taxing Internet access.

'As House leadership indicated yesterday, the House is fully committed to elimination of the Internet tax and making sure they never have to pay tax on their Internet access,' said House Majority Leader D.J.

Bettencourt Thursday.

The House actions caused a flap between the Senate and House leadership, which both said they supported the prohibition.

After an exchange of words, Senate President Peter Bragdon, R-Milford, said it was up to the House to find some way to bring the proposal back because that body killed it, not the Senate.

Thursday, the House Ways and Means Committee held a public hearing on the proposal and attached to Senate Bill 399, which limits the fees for dredging projects. Bragdon is the bill's prime sponsor.

The committee also attached another bill that gives legislative oversight to Department of Revenue Administration forms, and reinstated a provision using $1.5 million of the surplus to reduce the developmentally disabled wait list.

Bettencourt said 'We are also please to be able to assist those on the Developmentally Disabled Wait list. Despite these difficult economic times it is the right thing to do. These are the types of individuals in our society who need our assistance the most.'

The wait list provision was included on HB 1652 and approved by both the House and Senate.

Bettencourt also said House leadership is committed to returning part of the surplus to the rainy day fund, something the Senate said is impossible with the reduction in state revenue due to the Internet access tax prohibition.

Senate budget writers said the prohibition will reduce the Communications Service Tax revenue by about $6 million next fiscal year.

'The House remains committed to being on the side of taxpayers and small businesses, as we have been this entire legislative session,' Bettencourt said. 'We also remain absolutely committed to restoring New Hampshire's Rainy Day Fund and will continue to fight for that goal for the remainder of this legislative session.'

In other action yesterday, the deadline for committees to vote on all remaining bills, the Senate Finance Committee voted 5-2 to adopt a compromise education tax credit bill, which would partially hold school districts losing students harmless.

The bill sets up a scholarship fund for low-income students to help pay for tuition at private or religious schools.

Students would receive up to a $2,500 scholarship to attend private or parochial schools. The student's family would have to be at 300 percent of the federal poverty level or below.

Students being home schooled could receive up to a $750 scholarship.

School districts losing students due to the scholarships would lose $4,100 per student in state education aid.

The program would be limited to $4 million the first year, then $6 million, and $8 million the third year.

Businesses would receive an 85 percent tax credit against state business taxes.

The compromise plan would reduce the amount of money school districts would lose if students left to attend private schools.

Under the bill, $1.1 million would be available to school districts to offset the loss in fiscal year 2014, and $1.6 million in fiscal 2015.

The additional money would reduce the loss for school districts from a projected $4.8 million in the first year to $3.7 million, and from $7.1 million in the second year to $5.5 million.

The House and Senate will have to agree to the proposed compromise.

Gov. John Lynch has expressed concerns about the bill, which opponents call a back-door school voucher program.

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