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 modifies the distribution of BPT revenues to the education trust fund, increasing the percentage from 40% to 44.2% over the next few fiscal years. The statutory SWEPT revenue target will also be reduced from $363 million to $273 million by FY 2030. Key legal changes include the amendment of RSA 77-A:2, III to reflect the new BPT rate and the repeal and reenactment of RSA 77-A:20-a to adjust the distribution percentages of BPT revenue.

To ensure that municipalities are not adversely affected by the changes in tax distribution, the bill mandates that the commissioner of the Department of Education, in consultation with the Department of Revenue Administration, assess the impact of the SWEPT reduction on education grants and provide compensation to affected municipalities, capped at $90 million. The bill anticipates a significant increase in revenue for the education trust fund, with projections indicating a cumulative increase of $206 million by the end of the proposed period. The Department of Revenue Administration will also need to update forms and electronic management systems to implement these changes, which is expected to be manageable within the department's operating budget.

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