The proposed bill, HB 502-FN, introduces significant changes to New Hampshire's tax structure, particularly focusing on the business profits tax and the state education property tax. It repeals the water's edge combined group provisions, which allowed multinational corporations to separate their U.S. and foreign operations for tax purposes, and reinstates a complete corporate reporting method. This method treats parent corporations and their subsidiaries as a single taxpayer, aiming to prevent profit shifting to foreign tax havens and enhance tax fairness for domestic corporations. Additionally, the bill modifies the definitions of "combined net income" and "foreign dividends" to clarify the treatment of overseas business operations and introduces new provisions for the distribution of funds to municipalities, ensuring that a portion is allocated to cover municipal costs before being directed to the education trust fund.

Furthermore, the bill makes substantial amendments to the Low and Moderate Income Homeowners Property Tax Relief program by raising income thresholds for eligibility and establishing a cap on total tax relief checks issued in a fiscal year. It deletes previous income brackets and percentages, replacing them with new thresholds that provide 100% relief for households earning less than $37,500, with a gradual reduction for those earning between $37,500 and $77,500. The bill also mandates annual inflation adjustments for the specified amounts in the tax relief program and requires the Department of Revenue Administration to mail application forms to eligible homeowners each year. Overall, these changes aim to improve taxpayer access to relief programs, streamline the tax assessment process, and enhance the overall fairness of the tax system in New Hampshire.

Statutes affected:
Introduced: 76:8, 76:11-a, 77-A:1, 198:39, 198:57