New Hampshire Corporate Tax Cuts in Limbo
July 2, 2015
Last week, New Hampshire Governor Maggie Hassan (D) vetoed the State Legislature’s budget bills, HB 1 and HB 2. In her veto message, the governor explained her opposition to the budget, criticizing the proposed business tax cuts:
“I have vetoed the budget passed by the legislature because it is unbalanced, makes false promises about what it funds, and gives unpaid-for tax giveaways to big corporations, many based out-of-state, at the expense of critical economic priorities, including higher education, health care, public safety and transportation. The long-term impact of these unpaid-for corporate tax cuts will create a more than $90 million hole in future budgets, further eroding our ability to encourage economic growth.”
Specifically, the corporate tax cuts would affect New Hampshire’s Business Profits Tax (BPT), a corporate income tax, and Business Enterprise Tax (BET), a value added tax. The budget which passed the New Hampshire General Court (the state legislature) phased in reductions to both rates through 2019, with the BPT rate scheduled to decline from 8.5 percent to 7.9 and the BET set to decrease from 0.75 percent to 0.675 percent over that period. More on New Hampshire’s BPT and BET here.
Although a new fiscal year has begun, New Hampshire does not face a government shutdown. With the legislature and the Governor both bracing for this budget showdown, the legislature adopted, and the Governor signed, a continuing resolution to ensure that if a budget decision was not reached, the state would continue operating at fiscal 2015 levels in the interim.
As of yet there is no timeline for when budget talks will reconvene, but Republican leadership said negotiations may be postponed until the fall.