New Hampshire lawmakers have approved a budget compromise reached by Gov. Chris Sununu (R) and Democratic leaders to end the impasse over the state’s two-year budget.
The New Hampshire House approved H.B. 3-A on a 327–29 vote and H.B. 4 on a 316–40 vote September 25. The budget bills were approved by the Senate later that day.
The bills reflect a compromise agreement reached by Sununu, Senate President Donna Soucy (D), and House Speaker Stephen Shurtleff (D). Sununu in June vetoed earlier budget bills for the fiscal biennium ending in 2021, objecting to lawmakers' proposed rollback of rate reductions for the business profits tax and business enterprise tax.
“The people of New Hampshire won today,” Sununu said in a September 24 tweet on the compromise deal. “This compromise budget does not increase taxes and ensures financial promises can be kept to the people of New Hampshire. This budget is something I can support.”
Sununu also tweeted an outline of select provisions in the compromise budget, which indicated that current business tax rates would remain unchanged through 2020 but that a trigger system could later yield different rates.
“In fiscal year 2020, if total revenue is 6 percent over projected revenue — business taxes will trigger down to 7.5 percent [for the business profits tax] and 0.5 percent [for the business enterprise tax] for calendar year 2021,” according to the document. If total revenue falls 6 percent below projected revenue, “business taxes will trigger up to 7.9 [for the business profits tax] and 0.675 percent [for the business enterprise tax] for calendar year 2021,” it said.
Furthermore, if total revenue falls between 106 percent and 94 percent of projected revenue in fiscal 2020, “taxes will remain at 2020 levels for calendar year 2021,” the document added.
A legislative spokesperson confirmed with Tax Notes September 25 that global intangible low-taxed income would be captured in the business profits tax base under the compromise budget, which will tax 50 percent of GILTI.
Following approval of the bills, House Majority Leader Douglas Ley (D) applauded the budget for preserving “the priorities House Democrats have been fighting for all year.”
“Increased support for public education, expanded availability of mental health services, and increased access to affordable health care are Democratic initiatives that will move New Hampshire forward and protect the most vulnerable in our state,” Ley said in a release shared by the House Democrats Twitter account.
In a statement tweeted by the Senate Democrats, Soucy said, “Budgets are a statement of our values, and this budget compromise makes clear that New Hampshire values the people of our state and is committed to ensuring every Granite Stater has the resources and opportunities they need to thrive.”
New Hampshire GOP Chair Stephen Stepanek celebrated what he called the “budget victory” in a September 25 tweet, saying it “does not increase taxes and will likely lead to a further reduction in employer taxes when revenues come in over estimates due to our solid economic growth.”
Sununu is expected to sign the legislation soon.