Senate votes to increase business tax credits
CONCORD — The Senate voted unanimously to increase the oversubscribed research and development business tax credits from $2 million to $7 million, but split down party lines on lowering business tax rates in a key committee Thursday.
Applications for the research and development credits far exceed the $2 million cap, so qualifying businesses receive less than their requests although the credit was doubled two years ago to $2 million.
Sen. Lou D’Allesandro, D-Manchester, said the businesses applying for the credits receive a fraction of what they are entitled to under the program and have to wait to collect the money until all applications are made in order to determine the amount.
“By increasing the R&D tax credit, we are effectively addressing a critical demand for additional funding geared at supporting the state’s business community,” said Senate Majority Leader Jeb Bradley, R-Wolfeboro. “This credit is an important tool to creating and retaining high-paying jobs in the state.”
Sen. Dan Feltes, D-Concord, voted for increasing the credits, but noted it does reward companies for the research and development they would do even if the credit did not exist.
He said that on the other hand, having the credit encourages multi-state companies to do their research and development in New Hampshire.
But, he said, “This should be a fairly low priority for the finance committee considering all the pressing needs we have.”
After the Senate approved Senate Bill 6 on a 24-0 vote, it was tabled so the Senate Finance Committee could include the provision in its version of the budget.
Things were not so agreeable in the Senate Ways and Means Committee later in the day, when the committee voted to lower the rates of the business profits tax from 8.5 to 7.9 percent over the next three budget cycles, and the business enterprise taxes from .75 to .675 percent over the same period.
The two rate cuts are estimated to reduce state revenue by about $43 million during the next biennium and by about $70 million when fully implemented.
“New Hampshire currently ranks 48th highest for business taxes in the country, which has resulted in a significant burden on our state’s small businesses and discouraged many from considering a move to our state,” Bradley said. “By lowering the BPT and BET, we move to restore New Hampshire’s business-friendly environment and the state’s competitive edge when compared to other New England states.”
But Jeff McLynch, executive director of the New Hampshire Fiscal Policy Institute, said the cuts show where the Senate’s true priorities lie.
“Rather than wait until it has developed a budget that ensures New Hampshire can continue to invest in higher education and other services that foster growth,” McLynch said, “the Senate now seems poised to put costly and ineffective business tax breaks at the head of the line.”
Cutting business tax rates became an issue in the gubernatorial election last year, when proposed by GOP gubernatorial nominee Walt Havenstein. Gov. Maggie Hassan opposed lowering the rates, saying it would blow a $90 million hole in the state budget.
The rate reduction bills, Senate Bill 1 and Senate Bill 2, will be acted on by the full Senate next month.
The phone rings and the caller ID reads IRS or an email arrives from your health insurance company seeking private information.
Spoofing, which is the attempt to hide the identity of the caller or to mislead someone, would be a violation of the state’s consumer protection act under Senate Bill 218. Under the bill, spoofing would be an unfair and deceptive act.
“It is a growing problem in New Hampshire,” said Sen. David Pierce, D-Hanover.
He said using the consumer protection act in no way impedes prosecution for a criminal act such as fraud.
The bill now goes to the House.
Payments to towns
The new medical marijuana program grants nonprofit status to the alternative treatment centers that dispense cannabis to patients. Nonprofits do not have to pay property taxes.
Senate Bill 54 would require the treatment centers to make payments to local communities in lieu of property taxes.
The centers were made nonprofit entities in order for the Attorney General’s Office to have oversight, said Sen. Molly Kelly, D-Keene, not to exempt them from property taxes.
The law is intended to spare the communities where the centers will be located unnecessary litigation which is bound to occur, she said, if the communities try to charge the facilities property taxes.
The bill now goes to the House.