New Hampshire cutting taxes on Covid-hit businesses. Vermont?

By Rob Roper

The Covid economic shutdowns have placed an enormous burden on small businesses. Even if the projections for an effective vaccine coming out sometime this spring are accurate and that some sense of normalcy might return by next fall, the hole these employers need to dig out of, especially in the hospitality industries, is daunting. Will the Vermont state government be part of the solution, or part of the problem?

According to stories in the New Hampshire media, Governor Chris Sununu (R) wants to cut their state rooms and meals tax, which now stands at 9%, the same as Vermont.

As one story states:

The New Hampshire meals and rooms tax is imposed on restaurants, hotels, and grocery stores that sell prepared food. Currently, the meals and rooms tax rate is 9% of the meal or room cost. Reducing this tax would be a huge win for New Hampshire’s tourism industry, which has been hit particularly hard by the forced shutdowns to slow the spread of the virus. (ATR, 12/7/20)

Yes, yes it would! It would also give New Hampshire’s tourism industry another competitive edge over Vermont’s. Our legislature has not expressed an interest in reducing Vermont’s rooms and meals tax or providing any other kind of tax or regulatory relief.

Additionally, Governor Sununu, working with the newly elected Republican majorities in both chambers of the NH legislature, is discussing cuts to his state’s business taxes, specifically the Business Profits Tax (BPT) and Business Enterprise Tax (BET). And, let’s not forget that New Hampshire has no income tax and no sales tax, and a $7.25 minimum wage.

Contrast this with Vermont, where our businesses are looking at an estimated 10% property tax increase on non-homestead real estate, a 7% increase in the state minimum wage to $11.75 beginning on January 1, key legislators pushing for a 17 cent per gallon tax on gas and diesel fuel (TCI), and the Climate Counsel formed under the Global Warming Solutions Act concocting who knows what new regulations on economic activities that produce greenhouse gas emissions.

Our economy is squeaking by on borrowed federal money. When that dries up, businesses will have to be flexible, and creative with fewer resources. Our policies should reflect that reality and help them to be so. New Hampshire lawmakers appear to have their hospitality industry’s and small business’ backs. Vermont lawmakers … what have you got?

Rob Roper is president of the Ethan Allen Institute. Reprinted with permission from the Ethan Allen Institute Blog.

Image courtesy of Public domain