This bill proposes a substantial overhaul of the communications services tax (CST) in the state, reducing the tax rate from 7 percent to 4 percent effective July 1, 2025, and completely abolishing the tax by July 1, 2026. The amendments to existing statutes, specifically RSA 82-A:3 and RSA 82-A:4, include the insertion of the new tax rate and the repeal date, while deleting references to the previous 7 percent tax rate and the ongoing existence of the CST. The bill also removes references to the CST from various sections of the law, including those related to penalties for substantial understatement of tax and tax expenditure reports.

Furthermore, the bill redefines "communications services" to clarify which services are exempt from the tax, explicitly stating that value-added services, purchases by service providers for resale, one-way transmission of programming, and internet access will not be taxed. The Department of Revenue Administration anticipates a significant decrease in General Fund revenue as a result of these changes, estimating a potential loss of $7.7 million in FY 2025 and $30.6 million in FY 2027 and beyond, based on previous CST revenue figures. The bill also outlines the requirements for CST returns, mandating monthly filings and estimated payments for taxpayers with liabilities exceeding $10,000, while indicating that necessary updates to tax forms and systems can be managed within the existing budget.

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