NH Does Not Need an Estate Tax

This op-ed by the American College of Trust and Estate Counsel sums up why:

For reasons of tax policy, we oppose the New Hampshire estate tax proposed in Senate Bill 450.

If adopted, the proposed statute would impose an 8 percent tax on all estates over $2 million passing to anyone other than a spouse. But the adoption of an estate tax will not provide a net benefit to the state.

The proposed tax will affect only the very wealthy who live here or who have property here. These individuals usually can choose where they live, and they can decide whether they want to maintain expensive properties in New Hampshire.

Many of the affluent clients we advise have homes in Florida or other warm-weather states (including California, Arizona and South Carolina) that have no estate tax. Our clients with homes in Florida often ask whether they should be New Hampshire residents or Florida residents. When the estate tax is a neutral issue (meaning neither state has such a tax), New Hampshire and Florida are more or less equal. Not surprisingly, our clients with New Hampshire connections tend to remain New Hampshire residents or to retain residential property here because they are not concerned that it will be exposed to taxation when they die.

The other New England states all have estate taxes. Many people choose New Hampshireas their state of residence rather than one of our neighboring states (notablyMassachusetts) because of the absence of an estate tax. Often, these are retirees who would not otherwise be here. Accordingly, we are concerned that if we adopt the proposed estate tax, New Hampshire will lose its favorable position as a place that does not penalize its wealthy property owners when they die. This could cause people who can conveniently do so to move their state of residence to Florida or elsewhere – or cause others not to move to New Hampshire in the first place.

Here are folks who are in the trenches telling us that “taxes matter” in relocation decisions.

New study finds New Hampshire’s Business Tax Burden is one of the Lowest in the Country

Check out my latest examiner.com story which finds that New Hampshire’s business tax burden is one of the lowest in the country. A healthy business community also translates into a healthy economy—as witnessed by New Hampshire’s low unemployment rate relative to the rest of the country.

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.