NHHTC Position on LLC and Partnership Tax
NH Legislative Report – Jan. 19, 2010
Per a timely conference call of the Legislative Committee as the State Legislature got underway, the NHHTC has taken positions on two issues already in this new legislative session:
- Application of Interest & Dividends Tax to LLCs and partnerships – NHHTC requests repeal.
- Exemption of newly established NH companies from the Business Enterprise Tax for the first three years of their existence – NHHTC favors.
LLC & Partnership Taxation
The Board’s letter spells out the basis for requesting repeal, and suggests a review of all business taxation with the goal of creating a NH tax climate that is conducive to entrepreneurship and economic vitality. It was hand-delivered to the offices of the Governor, Senate President, House Speaker, Dept. of Revenue Administration Commissioner, and the Union Leader.
Business Enterprise Tax Exemption
NHHTC President, Fred Kocher, testified before the House Ways and Means Committee on a hastily called hearing on three bills by State Representative Peyton Hinkle to provide tax relief to NH businesses. While the intent of all three bills is positive, there is only one that has any reasonable chance of passing in this legislative session. It’s HB 1616, which provides that newly established companies in NH would be exempt from the Business Enterprise Tax for the first three years of their existence. This would be of particular interest to high tech start-ups that typically have high expenses but no profits for the first several years.
The other two bills have good intent, but also have the potential to cut into the state budget too much, and are very likely to be opposed. HB 1464 would increase the threshold before a company has to pay the Business Enterprise Tax, and HB 1603 would increase the carry forward period for the Business Enterprise Tax.
NOTE: Given the estimated budget deficit being faced by the State Legislature at $600 million+, the NHHTC is working closely with a coalition of business organizations, including the Business & Industry Association, the NH Home Builders
& Remodelers, the NH Bankers Association, the Retail Merchants Association of NH, the Manchester and Nashua Chambers of Commerce, the NH Restaurant & Lodging Association, the Independent Insurance Agents, the NH Grocers Association, etc. There is concern the Legislature will look at business taxes and/or credits to help address the deficit.