But beginning in 2021 those taxes will rise or fall depending on state revenue
State business tax reductions passed by the State Legislature four years ago were eliminated under the state budget the Governor vetoed this summer. Lawmakers saw it as a way to get funds to increase spending on education and Medicaid provider rates. The budget not only stopped the planned business tax reduction for 2020, but it retroactively eliminated the reduction that kicked in on January 1, 2019. But Governor Chris Sununu didn’t agree with all of new spending priorities as well as the increased taxes for businesses, so he vetoed the legislature’s budget.
Now, after several months, a compromise has been reached that funds some of the desired increases while preserving the 2019 business tax reductions and potentially those scheduled for 2021. Your NFIB State Director, Bruce Berke, worked hard to keep those reductions to the Business Profits Tax and the Business Enterprise Tax in place. While NFIB was successful, future business tax rates beginning in 2021 will be linked to the amount of state revenue coming in. If revenue declines the BPT and the BET will go up, but if the economy is doing well, they will go down. Businesses will know by mid-July, 2020 if the tax rates will change on January 1, 2021. Here is a chart that explains the details of the potential changes in business taxes in 2021 and beyond.
If general and education fund revenues are below plan by 6%:
Business Profit Tax goes up to 7.9% from 7.7%
Business Enterprise Tax goes up to .675% from .6
If general and education fund revenues are above plan by 6%:
Business Profits Tax goes down to 7.5% from 7.7%
Business Enterprise tax goes down to .05 from .6
And finally, if they are neither 6% above or below plan, the rates will remain as they are today:
Business Profits Tax = 7.7%
Business Enterprise Tax = .6%
