This bill proposes significant changes to the taxation system, including the reinstatement of the Interest and Dividends Tax at a rate of 5% for taxable periods ending on or after December 31, 2025. It also increases the Business Profits Tax from 7.5% to 8.5%, the Business Enterprise Tax from 0.55% to 0.75%, and raises 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 education trust fund, with specific provisions ensuring that a portion of the revenue from the Business Profits and Business Enterprise taxes is deposited into this fund. Key legal changes include the repeal and reenactment of RSA 77:1 and RSA 77:3, which outline the new tax rates and subjects of the Interest and Dividends Tax, as well as amendments to RSA 77-A:2 and RSA 77-E:2 for the Business Profits and Business Enterprise taxes, respectively.

Furthermore, the bill introduces a New Tax distinct from the repealed Income and Dividends tax, with a proposed $20,000 threshold for tax exemptions. It does not re-enact several provisions related to taxable income and exemptions from the previous tax, which may lead to confusion regarding their applicability to the New Tax. The Department of Revenue Administration will analyze the fiscal impact of the New Tax, assuming the same definitional principles for "income" will apply, although it recommends a clear definition be included in the bill. The proposed changes to the Business Profits Tax and Meals and Rooms Tax are expected to increase revenue for the Education Trust Fund while potentially decreasing General Fund revenue, with the Department estimating a one-time administrative cost of approximately $20,000 for notifying taxpayers about the reinstatement of the Interest and Dividends tax. Overall, the bill aims to enhance funding for education through increased tax revenues and clearer guidelines for revenue distribution.

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