The proposed bill, HB 417, seeks to significantly reform the Communications Services Tax (CST) in the state by first reducing the tax rate from 7 percent to 4 percent, effective July 1, 2025, as indicated by the insertion of "4" and the deletion of "7" in RSA 82-A:3 and RSA 82-A:4. Furthermore, the bill aims to completely abolish the CST starting July 1, 2026, which is reflected in the repeal of RSA 82-A. This legislative change is expected to lead to a substantial decrease in revenue for the General Fund, with estimates suggesting a reduction of $7.7 million in FY 2026 and $30.6 million in FY 2027 and beyond.

In addition to the tax rate reduction and repeal, the bill also removes references to the CST from various sections of the law, including amendments to RSA 21-J:33-a, RSA 71-C:4, and RSA 72:12, indicating a comprehensive effort to eliminate the tax and its regulations from the state's tax code. While the Department of Revenue Administration will need to update tax forms and electronic systems to accommodate these changes, it does not foresee any additional administrative costs beyond its current budget. Overall, the bill represents a significant shift in the state's approach to the CST, with the intent to streamline tax obligations for taxpayers.

Statutes affected:
Introduced: 82-A:3, 82-A:4, 21-J:33-a, 71-C:4, 72:12, 106-H:9