The Consumer Tax Relief Act is a legislative proposal that seeks to amend tax rates for various taxes in New Hampshire. It outlines a phased reduction of the Meals and Rooms Tax from 8.5% to 6% over several fiscal years, starting in 2024. The bill also proposes changes to the distribution of revenue from this tax, increasing the percentage allocated to the Meals and Rooms Municipal Revenue Fund from 30% to 42.5% by December 2027. Additionally, the bill includes a reduction in the Business Profits Tax rate by 0.1% per year from 2025 to 2029 and a plan to reduce and ultimately repeal the Communications Services Tax by January 1, 2027. The fiscal impact of these changes is indeterminate for the General Fund and Education Trust Fund revenue, but an increase in revenue for the Meals & Rooms Municipal Revenue Fund and local revenue is expected.

The bill also provides specific fiscal impact estimates, showing a cumulative reduction in revenue of $220.8 million for the Business Enterprise Tax by FY 2031, a $90.8 million reduction for the Communications Services Tax by FY 2028, and a $406.7 million reduction for the Meals and Rentals Tax by FY 2028. Despite the overall decrease in tax revenue, the increase in the distribution rate to the Meals and Rooms Municipal Revenue Fund is expected to benefit municipalities. The bill does not anticipate additional administrative costs for the Department of Revenue Administration or the Treasury Department, as they will update tax return forms and electronic systems to accommodate the new rates. The Treasury Department has also provided estimates for the impact on the M&R Municipal Revenue fund distribution, assuming constant administration costs and a decrease in Education Trust Fund Revenues in accordance with the proposed changes.

Statutes affected:
Introduced: 77-A:2, 77-E:2, 82-A:3, 82-A:4, 21-J:33-a, 71-C:4, 72:12, 106-H:9, 78-A:6, 78-A:26