This bill seeks to reduce the financial burden of the statewide education property tax (SWEPT) on taxpayers while maintaining funding for public schools. It directs the Department of Revenue Administration to lower the SWEPT rate, which will be counterbalanced by an increase in the business profits tax (BPT) rate from 7.5% to 8.5%, effective for taxable periods ending on or after December 31, 2026. Additionally, the bill increases the allocation of BPT revenue to the education trust fund from 39% to 44.2% by fiscal year 2029 and reduces the statutory SWEPT revenue target from $363 million to $273 million by fiscal year 2030. Key legal changes include the amendment of RSA 77-A:2 to reflect the new BPT rate and the repeal and reenactment of RSA 77-A:20-a to adjust the distribution of BPT revenue.

To mitigate the impact of the SWEPT reduction on municipalities, the bill includes provisions for compensation, capped at $90 million, to ensure that education grants are not adversely affected. The Department of Education will assess the impact of the SWEPT reduction and provide hold harmless grants to municipalities, with estimated amounts of $1.7 million for FY 2027, $11.5 million for FY 2028, and $13.1 million for FY 2029. The bill's implementation will require updates to forms and electronic management systems, which the Department expects to manage within its existing budget.

Statutes affected:
Introduced: 77-A:2
HB1708 text: 77-A:2