This bill introduces significant tax rate changes aimed at increasing revenue for the Education Trust Fund (ETF). It reinstates the Interest and Dividends Tax at a rate of 5% for taxable periods ending on or after December 31, 2025, and raises 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. Key legal changes include the repeal and reenactment of RSA 77:1 and RSA 77:3, which detail the new tax rates, and amendments to RSA 77-A:20-a and RSA 77-E:14 regarding revenue allocation.

The bill also proposes a new tax structure distinct from the repealed Income and Dividends tax, suggesting it should be established under a new RSA to avoid taxpayer confusion.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 related to taxable income and exemptions from the previous tax, specifically those in RSA 77:4 through 77:14-d. A new $20,000 threshold for tax exemptions is introduced, which may not apply to the new tax unless clarified. The Department of Revenue Administration estimates that the new tax will generate approximately $3.2 billion for the General Fund, while the changes to the Business Profits and Meals and Rooms taxes are expected to shift revenue from the General Fund to the ETF, with an estimated increase of $23.8 million to the ETF and a decrease of $2.2 million to the General Fund.

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