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House committee gets details of NH's revenue problems
State Department of Revenue Administration officials told the House Ways and Means Committee that fears of the “fiscal cliff” may have driven up interest and dividends, and business tax revenues last year, but is lowering returns this fiscal year.
State revenues were ahead of what lawmakers believed they would produce by about $25 million until March, when business taxes were off by $3 million and April when they were off by $11 million, both months when significant business taxes are collected. During April, the interest and dividends tax was $9 million below projections, or down 22 percent.Department of Administrative Services Commissioner Linda Hodgdon said at the time, she had never seen such a drop in the interest and dividends tax.
Putting the burden of proof on the DRA to challenge what a business owner claims as compensation versus profit has had an effect, she said, as have raising the threshold, which has reduced the number of proprietorships and partnerships filing returns.
Committee member Rep. Dick Ames, D-Jaffrey, asked how many cases has the department challenged, and Cyr said she was not aware of any.
According to the department, notice collections were $43.4 million in fiscal 2010, $47.5 million in 2011, $26.5 million in 2012 when the law changed, $27.4 million in 2013 and $24.5 million this fiscal year to date.
Budget writers received good news from the Insurance Department, which expects the insurance premium tax to produce more money than anticipated.
Insurance revenues are projected to be $95.2 million, $8.3 million more than estimates due largely to increased purchases in property and casualty insurance and $1.3 million from premiums for the state managed care Medicaid program.
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