Reducing the rate of the business enterprise tax.
The estimated fiscal impact of HB 155 projects a decrease in state revenue as a consequence of lowering the BET. The New Hampshire Department of Revenue Administration has indicated that while the direct fiscal impact is indeterminable, it could lead to significant revenue losses over the following years. For example, projected revenues for FY 2026 could decrease by approximately $4.3 million, with further losses estimated at $19.7 million in FY 2027 and $22.3 million in FY 2028. The reduction could influence both the General Fund and the Education Trust Fund, potentially affecting public services reliant on these revenues.
House Bill 155 proposes a reduction in the Business Enterprise Tax (BET) rate from 0.55% to 0.50% for taxable periods ending on or after December 31, 2026. This legislative change is intended to alleviate some of the tax burden on businesses within the state, thereby encouraging economic activity and investment. The new tax rate would become effective on July 1, 2025, aligning with the fiscal calendar and allowing for adjustments in business planning and budgeting.
The general sentiment surrounding HB 155 appears to be cautiously optimistic among proponents who argue that a reduction in taxes will stimulate economic growth and enhance the competitiveness of local businesses. However, detractors express concern that the reduction in tax rates might lead to vital state services and educational funding being compromised, ultimately impacting the overall welfare of the state's residents. Highlights of this discourse reveal a balance between the desire for economic incentivization and the need for sustainable funding sources.
A primary point of contention related to HB 155 centers on the balance between tax relief for businesses and the state's fiscal health. While supporters of the bill argue that reducing the BET is a necessary step to foster a more favorable business environment, critics are apprehensive about the long-term fiscal implications of diminishing state tax revenue. There is an ongoing debate about how to ensure adequate funding for essential services, education, and infrastructure while promoting policies that support economic development.