By Christian Wade | The Center Square
New Hampshire businesses will be getting more relief from a bill signed into law on Friday by Republican Gov. Chris Sununu cutting the state’s business taxes.
The measure cuts the state’s business profits tax from 7.6% to 7.5% for most companies beginning in 2023, which Sununu said will make the state more competitive and business friendly.
“Every dollar matters, and these tax cuts signed into law today will help provide economic relief for businesses across the Granite State amid record inflation nationwide,” Sununu said in a statement.
Republican lawmakers who pushed the bill through the Legislature argued that the state is flush with surplus revenue and can afford to give pandemic-battered businesses a tax break.
Democrats opposed the changes, arguing it would benefit wealthy corporations that reaped record profits during the pandemic, while reducing the amount of money needed to run the state government.
New Hampshire has slashed the state’s business profits tax several times over the past several years from a high of 8.5% in 2016.
The state Department of Revenue Administration estimates that the proposed reduction in the tax rate would cost the state $17.5 million over the next several fiscal years with an ongoing loss of about $8.4 million a year after 2025.
A two-year, $13.5 billion budget signed by Sununu last year reduced the state’s business enterprise tax from 0.6% to 0.55% and lowered the threshold to pay business taxes, which means fewer businesses will be paying the levy.
Despite the concerns, New Hampshire’s booming economy has continued to fill the state’s coffers with excess cash from business taxation over the past year. In April, business revenues were up $82.8 million over budget projections and more than $380 million this fiscal year, according to the state Department of Revenue Administration.
The pro-business group Americans for Prosperity New Hampshire praised final approval of the latest tax, saying it will help create more jobs and spur the state’s economy.
“Employer tax relief is working for New Hampshire’s economy,” said Greg Moore, the group’s executive director. “While nationally there are troubling signs of economic weakness, the data here in the Granite State continues to be strong, thanks to four earlier rounds of business tax reduction.”
Moore noted that “doomsayers” who warned about previous business tax cuts blowing “a hole” in the budget have been proven wrong “and our economy has been the beneficiary.”