New Hampshire’s Low Business Tax Burden

Ernst & Young and the Council On State Taxation (COST) just released their annual study on “Total State and Local Business Taxes” (pdf) which provides a comprehensive look at the business tax climate.  As shown in the chart below,  New Hampshire’s state and local tax burden on businesses as a percent of private sector Gross State Product, for Fiscal Year 2010, was 4.4 percent–the 36th highest in the country.

Also, to better understand the “New Hampshire Advantage,” the chart shows that neighboring Vermont (7.1 percent, rank 4th) and Maine (6.8 percent, rank 5th) have business tax burdens that are significantly higher.  Although New Hampshire’s business tax burden is on par with Massachusetts’ (4.3 percent, 39th).

The study also indicates that the tax burden on businesses has been declining in recent years.  Table 6 on page 11 shows that, between FY 2007 and FY 2010, the tax burden on businesses has declined by $400 million.  Interestingly, most of that decline has come from local property taxes which dropped by $300 million, or 19 percent.

NH Taxpayers Rejoice . . . Local Tax Caps are Legal Again

The Union Leader reports that Gov. Lynch has signed SB2 which allows for local tax caps . . . New Hampshire taxpayers rejoice!

Manchester’s tax cap, rejected by the New Hampshire Supreme Court in early 2010, is back in place.

Gov. John Lynch signed a bill Tuesday that clears the way for cities, towns and school districts to adopt caps on local tax increases, and restores caps that may have had legal problems.

Senate Bill 2, which took effect immediately, states that any tax cap that voters elected to make part of their charter is now valid, whether or not it was legal to adopt the cap at the time it passed.

The bill gives communities clear guidelines and greater leeway in adopting the caps. It also allows caps to be exceeded with supermajority votes of the local governing body . . .

SB 2 does not set out a specific percentage of votes needed to exceed a cap. Instead, it allows communities and school districts to choose the level, which is most often either a two-thirds majority or of a three-fifths majority.

The new law sets out the wording that a ballot question on a local tax cap must contain. It allows voters to decide whether to cap annual tax increases by a certain percentage or by a dollar amount.

The cap must be adopted by a three-fifths majority — 60 percent of voters — to take effect. Manchester’s cap passed by a narrower margin, gaining 54.4 percent of the vote.

2010 New Hampshire Property Taxes by Town

The New Hampshire Department of Revenue Administration recently posted the 2010 property tax rates and collections by town.  We have simplified the presentation and posted the property tax data on the NHCEP website.  In the near future, we plan to do some very cool things with this data such as comparing the rate of growth across time and towns.  If you haven’t already, bookmark this site now (or subscribe to the RSS feed) and stay tuned.