Hassan promotes business innovation
So she visited a New Hampshire National Guard aviation support facility in Concord and a large manufacturing enterprise in Manchester, where she expressed her support for legislation that would double the amount of money available for the state's research and development tax credit, from $1 million to $2 million.
The bill to double the tax credit, sponsored in the state Senate by Sen. Bob Odell, R-Concord, would also make the credit a permanent part of the state's tax code.
"I started the day at the National Guard because public safety is our first priority," she said, "and I'll continue to visit innovative businesses because we need to have more and more of them here in New Hampshire."
The tax credit for research and development was approved during the 2007 legislative session and signed into law by then-Gov. John Lynch. The Legislature designated $1 million a year through 2013 to fund the credit, which is applied to the state's business profits tax or business enterprise tax, up to a maximum of $50,000 per business.
It has been enormously popular in the business community, with more than 100 applications for the credit in the past tax year, according to Christopher Way, interim director of the state Division of Economic Development, who accompanied Hassan on the tour of Freudenberg North America, with 300 employees, and Trelleborg Vibracoustics, with 160.
The two businesses provide components for the auto industry and share a large manufacturing plant on Ammon Drive at the Manchester-Boston Regional Airport.
The governor was looking for businesses that have made good use of the credit to demonstrate her support for the idea, as she continues what she called her "Innovation NH Tour" during the campaign. But she got more than general endorsements of the credit from managers at Freudenberg.
In a private meeting with the governor before the plant tour, they pressed her to support changes in the tax law that would give bigger companies a bigger piece of the tax credit pie.
The credit is currently available to all companies that meet the requirements when filing state tax returns, so a small company could qualify for the same size tax credit as a much larger enterprise. Maryellen Strabone, tax director for Freudenberg, said it's not fair for a company like hers, which invests as much as $7 million a year in R&D, to get the same tax credit as a company that invests a fraction of that amount.
"Freudenberg has invested $7 million to $10 million annually in research and development in each of the past five years," she said. "However, we have only been awarded $12,000 to $20,000 of the $1 million tax credit pool."
The company, which paid more than $1 million of business profit taxes for the 2011 tax year, would like to see the mechanics for awarding the tax credit changed to reflect the amount of money a business spends on R&D, "as an incentive for continued R&D activity in the state of New Hampshire."
Strabone suggested that if the pool is going to be doubled to $2 million, the maximum credit should be doubled to $100,000, and companies with large investments in R&D should be eligible for the full amount.
Hassan was non-committal on that idea. "I want to get more input from a variety of stakeholders," she said. "I think it's an important concern and I think it's important for us all to consider."
Doubling the tax credit pool was widely supported in the last legislative session, but fell victim to what the New Hampshire High Tech Council called "legislative gamesmanship" in its June report to members.
"House leaders, knowing the bill had wide support, added a non-germane amendment on abortion restrictions to the R&D bill and sent it back to the N.H. Senate, which had already defeated similar language on abortion restrictions earlier in the session," the High Tech Council reported. "The Senate, faced with an R&D tax credit bill that was no longer in its pure form, defeated it. Instead, the Senate revived a House-approved R&D bill from the last legislative session that was still in play, and passed it."
That parliamentary maneuver kept the credit from expiring in 2013, but left the pool at $1 million.
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Dave Solomon may be reached at email@example.com.