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Jun. 17—CONCORD — Gov. Chris Sununu signed into law Friday legislation containing both a state business tax cut and a one-time reduction in local property taxes. The legislation reduces the Business Profits Tax from 7.6 to 7.5% for the year ending on Dec. 31, 2023.
State revenue officials estimate that once fully implemented, this will reduce business taxes by about $8 million annually.
This is the fourth cut in business taxes over the past eight years and the goal of advocates for this change like Americans for Prosperity (AFP) targeted a 7.5% BPT rate as the ultimate goal.
"When AFP began advocating for reducing employer taxes, critical voices said it would 'blow a hole in the state budget.' Eight years later, the state is seeing record revenues and historically low unemployment. The doomsayers have been wrong from the start and our economy has been the beneficiary," said Greg Moore, AFP's state director.
Sununu said this change (HB 1221) would come at an opportune time for business owners as they deal with soaring inflation and the prospects of an economic recession.
"Bad policy actions lead to bad consequences and that's what we are seeing in Washington," Sununu said. "This is something we can do at the state level to help businesses cope with an uncertain, national future."
Michael Skelton, president of the Business & Industry Association of New Hampshire, said the BIA has long campaigned to reduce business taxes which, at their peak a decade ago, were the highest in New England.
"This really is welcome news especially as our company leaders come out of this pandemic and think about making future decisions about their businesses," Skelton said.
Dems opposed tax break
Democratic candidate for governor and state Sen. Tom Sherman of Rye noted Democratic lawmakers opposed the business tax cuts while championing the state subsidy of local pension costs that had been a pet cause of the late House Democratic Leader Renny Cushing.
"It's absurd that we're giving permanent tax cuts to out-of-state corporations seeing record profits instead of permanent property tax relief to Granite Staters dealing with soaring housing costs, rising property taxes, and now soaring energy costs," Sherman said.
For decades, the state covered 35% of local pension costs until the Legislature and then-Gov. John Lynch did away with the subsidy in 2010 during the great recession.
After Cushing passed away, state Rep. Michael O'Brien, D-Nashua and a retired Nashua deputy fire chief, took up the cause for a permanent subsidy.
Sununu said city and town officials should treat the money like it's a "one-time" benefit.
"They may be short term or may be one time, but they come at a critical time so that local officials can provide property tax relief," Sununu said during an interview.
"It's not our money. It's the citizens' money," he said. "And when we can provide relief, we want to be there to do it."