A House committee endorsed making federal Payroll Protection Program loans exempt from the state’s Business Profits Tax, a tax cut for business owners hurt by COVID-19, the New Hampshire Union Leader reported.
Business owners who struggled with the impact of COVID-19 got some good news Tuesday when a House committee endorsed making federal Payroll Protection Program loans exempt from the state’s Business Profits Tax.
the New Hampshire Union Leader
House Majority Leader Jason Osborne said the state had no claim to the relief money, telling the New Hampshire Union Leader: We should not be in the business of taxing federal relief money meant to keep businesses afloat during a worldwide pandemic.
He added that the federal treatment of the loans should carry over to the state level.
“The fact of the matter is that this money never belonged to New Hampshire to begin with. We should not be in the business of taxing federal relief money meant to keep businesses afloat during a worldwide pandemic. The taxing of this money was forgiven at the federal level, and it is only right that it is also forgiven at the state level,” Osborne said in a statement.
the New Hampshire Union Leader
The House Ways and Means Committee endorsed the bill 23-0 after a month of review of the measure (SB 3), which had unanimously cleared the Senate, according to the New Hampshire Union Leader. Vice Chairman Patrick Abrami said the state could absorb the roughly $100 million cost.
“There is no question in my mind the state can afford to cover the cost of lost revenues from the passage of SB 3,” Abrami said.
the New Hampshire Union Leader
As the New Hampshire Union Leader reported, more than three-fourths of states already exempted the loans because their tax codes tracked federal changes, while New Hampshire and Vermont were among about 10 states without that direct link, which is why a separate bill was needed. Rep. Walter Spilsbury, once a leading skeptic, said the state had “gotten more revenue than we had planned” and could “afford to give some of it back.” Business tax experts assured the committee the cut would not jeopardize the state’s federal relief money.
Other once-reluctant Republicans came around to the tax cut as well, pointing to the state’s strong revenue picture. Rep. Walter Spilsbury, an early skeptic, said the question came down to values rather than philosophy.
“At the end of the day it’s not a philosophical discussion, it’s a value judgment,” Spilsbury said.
the New Hampshire Union Leader
Congress had created the PPP program in 2020 to help businesses keep workers on the payroll through the pandemic, later adding a second round for smaller firms. New Hampshire and Vermont were among about 10 states whose tax codes did not automatically track the federal exemption, requiring a standalone bill. The U.S. Treasury had warned that state tax cuts could reduce future federal grants, but tax experts assured the committee the exemption would not trigger that penalty.
Read the full story at the New Hampshire Union Leader.
