New Hampshire Senate Bill SB189

New Hampshire 2023 Regular Session

• Introduced: 1/20/23
• Refer: 1/20/23
• Report Pass: 2/16/23
• Report Pass: 3/8/23
• Engrossed: 3/21/23
• Refer: 3/21/23
• Report Pass: 5/10/23
• Enrolled: 6/30/23
• Chaptered: 8/1/23
• Passed: 8/1/23

Caption

Relative to the definition of gross business profits in determining taxable business profits.

Impact

The impact of SB189 on state law revolves around its fiscal implications for the state's revenue. The proposed changes are expected to affect the general fund and the education trust fund by potentially decreasing revenue, though the precise fiscal impact remains indeterminable due to the state's lack of data on federal calculations related to business interest deductions. The bill’s implementation may accelerate the effects of these deductions, allowing businesses immediate benefits from the tax changes rather than the delayed benefits currently structured under federal law.

Summary

SB189, introduced in the New Hampshire Senate, proposes changes to the definition of gross business profits as it relates to the assessment of taxable business profits. Specifically, the bill aims to amend RSA 77-A:4 to allow business organizations to fully deduct their business interest expenses in the year they are incurred, starting from tax years that commence on or after January 1, 2024. This adjustment is tied to the Internal Revenue Code's Section 163(j), which currently limits the ability of businesses to deduct their interest expenses from taxable income.

Contention

A notable point of contention surrounding SB189 is the challenge in estimating the net impact on state revenue. The Department of Revenue Administration has indicated that while the bill could lead to a decrease in revenue due to faster deductions for business interest expenses, it might simultaneously allow for an increase in revenue through disallowed carry-forwards from earlier tax years. This uncertainty presents difficulties for lawmakers and stakeholders who must weigh the benefits for businesses against potential shortfalls in state revenue.