New Hampshire small businesses staring down automatic tax hike
A tax hike provision in the state budget could make the road to recovery even longer for New Hampshire’s business community.
New Hampshire businesses are struggling to recover following the worst economic downturn since the Great Depression.
Unfortunately, state lawmakers are threatening to make that struggle even worse.
Small business owners could shoulder a 12.5% automatic tax hike in 2021 if elected officials don’t take action to stop it.
Here’s how the potential tax hike works:
The state budget passed in 2019 included a trigger for business tax rates to increase or decrease depending on how much money the state pulls in.
Specifically, the budget contained triggers that would increase the Business Profits Tax by 2.6% and the Business Enterprise Tax by 12.5% if state revenues fall by at least 6% below official estimates in Fiscal Year 2020, which ended June 30.
Data from the Department of Administrative Services suggest the state may have barely dodged the automatic tax hike – with revenues falling by 5.4%. The tax hikes would have been triggered if revenue had fallen by an additional $15.4 million.
However, these numbers are not final. And a difference of more than $15 million between the preliminary figures and the final, audited numbers released in December would not be unprecedented, according to an analysis by the Josiah Bartlett Center for Public Policy.
Granite Staters will not know for sure whether the increases will take effect until the state releases final revenue figures in December.
Creating this uncertainty on top of the COVID-19 pandemic is especially harmful for small business owners – who are struggling enough to plan for what the future holds. Concord should be lifting up the state’s small business community in their time of need. Not forcing them to shoulder a tax hike when they can least afford it.
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