This bill proposes significant tax rate changes aimed at increasing funding for the Education Trust Fund (ETF). Key provisions include the reinstatement of the Interest and Dividends Tax at a rate of 5% for taxable periods ending on or after December 31, 2025, and increases in the Business Profits Tax from 7.5% to 8.5%, the Business Enterprise Tax from 0.55% to 0.75%, and the Meals and Rooms Tax on meals from 8.5% to 9.0%, effective July 1, 2025. The additional revenue generated from these tax increases will be allocated to the ETF, with specific provisions for the distribution of funds from the Business Profits and Business Enterprise taxes. The bill also includes the repeal and reenactment of RSA 77:1 and RSA 77:3, which detail the new tax rates and the subjects of the Interest and Dividends Tax, while clarifying that no individual will be taxed solely for holding an ownership interest in a qualified investment company.

Furthermore, the legislation introduces a New Tax distinct from the repealed Income and Dividends tax, suggesting it should be established under a new RSA to avoid taxpayer confusion. It does not re-enact several provisions of the previous tax, particularly those related to taxable income definitions and exemptions. The Department of Revenue Administration anticipates a decrease in Business Enterprise Tax revenue to the General Fund while reallocating increased revenue to the ETF. The bill also includes administrative provisions, such as a one-time cost of approximately $20,000 for taxpayer notification regarding the reinstatement of the Interest and Dividends Tax, and aims to clarify language related to ETF distributions in RSA 78-A:26. Overall, the bill seeks to enhance educational funding through these tax adjustments, resulting in an indeterminable decrease in General Fund revenue and an increase in ETF revenue.

Statutes affected:
Introduced: 77-A:2, 77-A:20-a, 77-E:14, 78-A:6