Business-Related Proposals at the Forefront of New Hampshire’s Legislative Session
In New Hampshire, the second legislative session has been bustling with activity, focusing on a range of business-related proposals that have made their way across the House and Senate floors. With no budget to craft and elections looming, the session has been marked by political maneuvering, but also by substantive debates on how to address the housing shortage and adjust business taxation.
Tax reduction has been a key topic, with lawmakers deliberating over a bill that proposed to lower several taxes, including business taxes, over a five-year span. This follows a previous trend of business tax rate reductions between 2015 and 2022. The bill, known as the Consumer Tax Relief Act, was sponsored by Rep. Joe Sweeney and co-sponsored by House Majority Leader Jason Osborne. It aimed to decrease rates for both the Business Profits Tax (BPT) and the Business Enterprise Tax (BET), as well as the Meals and Rooms Tax and Communications Services Tax, beginning in Fiscal Year 2025.
The proposed tax cuts were met with mixed reactions. Proponents like Rep. Tim McGough argued that lowering taxes historically leads to increased revenues. However, Rep. Susan Almy raised concerns about the potential loss of a quarter of state revenues by 2027. Phil Sletten of the NH Fiscal Policy Institute found that past tax rate reductions did not lead to increased revenue through economic activity. Ultimately, the bill was recommended for interim study by a unanimous committee vote, with the House concurring.
On a brighter note for businesses, the Ways and Means Committee endorsed bills to ease tax liabilities for businesses starting in 2025. These included increasing safe harbor provisions and expense deductions against the BPT, as well as restoring net operating loss deduction limits.
Efforts to combat the housing shortage saw the House pass bills to relax local zoning ordinances and increase housing supply. Controversial measures included allowing accessory dwelling units on single lots and converting single-family homes into duplexes. While these proposals garnered support from various housing authorities and advocates, they faced opposition from those concerned about local control and the impact on single-family neighborhoods.
The legislative session also touched on environmental, social, and governance (ESG) factors in public investments. Two bills aimed to prohibit ESG considerations were met with resistance from those who argued it would infringe on fiduciary duties and potentially lead to lower investment returns. Both bills ultimately failed.
In the insurance sector, a bill to remove caps on loss of consortium claims in wrongful death cases sparked debate between trial lawyers and insurance carriers. The Senate opted to raise the caps rather than eliminate them entirely.
The session also addressed employment issues, with proposals to increase the minimum wage and unemployment benefits. While some bills were killed or tabled, others like HB 1178, which would require employers to pay out unused vacation time in certain job loss scenarios, passed the House.
Lastly, landfills became a point of contention with HB 1145 seeking to prohibit private ownership of landfills. Despite concerns about business friendliness and liability issues, the House passed the bill.
This legislative session in New Hampshire has been a crucible for policy-making that could shape the state’s economic landscape for years to come.
