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House Republicans not clear about promises to lower state taxes

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House Republicans not clear about promises to lower state taxes

Sep 17, 2024 | 5:54 pm ET
By Ethan DeWitt
House Republicans not clear about promises to lower state taxes
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House Majority Leader Jason Osborne, an Auburn Republican, presents House Republicans' 2025 legislative plans at a press conference. (Ethan DeWitt | New Hampshire Bulletin)

New Hampshire House Republicans say they will “lower taxes and spending” if voters keep them in control of the State House this November.

But they have not made clear which taxes they will seek to cut. 

At a press conference unveiling their “Contract With New Hampshire” agenda Monday, House Republican lawmakers displayed a poster with the promises of that contract, including a pledge to lower taxes. But they did not say whether they will push to lower either of the state’s business taxes, the state meals and rooms tax, the tobacco tax, or the real estate transfer tax. 

Instead, Rep. Joe Sweeney, who spoke on behalf of House Speaker Sherman Packard, pointed to the state’s communications services tax, the 7 percent tax levied on all wireless cell phone and landline phone bills in the state.

“We always have a laundry list of taxes that Republicans are always looking to lower and reduce,” Sweeney, of Salem, said. “Off the top of my mind, I think in the next budget, further reductions towards the communication service tax. It’s a great tax that pretty much everyone in New Hampshire pays – it’s right under your cell phone bill. So we can reduce that tax as an immediate relief to taxpayers.”

As for business taxes, which make up a bulk of the state’s revenue, Sweeney was less direct. Asked whether the party would lower them, he said: “We’ll look at the next state budget.”

The comments underscore the financial uncertainty faced by lawmakers and the next governor in 2025. After years of pandemic-era federal funding dollars have come to an end, some experts are warning that revenues might be leaner than usual in future years.

“We’re not super excited about (fiscal years) ‘26 and ‘27,” said Chris Shea, the state’s deputy legislative budget assistant at a House Ways and Means Committee meeting in May, referring to the next two-year state budget. “I don’t think you’re going to see the same revenues you’ve seen the last couple of budget cycles. There’s going to be harder decisions being made.”

The tighter revenue could make any potential changes to tax levels tricky. 

Republicans passed a law in 2021 that phased out the state’s interest and dividends tax, which taxed investment income over a threshold. That tax will be completely phased out in calendar year 2025; eligible residents will need to pay 3 percent on those investments one last time next April for calendar year 2024. 

In the last decade, Republican lawmakers have also gradually reduced the business profits tax – from 8.5 percent to 7.5 percent – and the business enterprise tax from 0.75 percent to 0.55 percent. 

Sweeney said if voters kept them in power, Republicans would keep those tax reductions. 

Democrats have criticized the elimination of the interest and dividends tax, noting research indicating that it impacts mostly wealthier residents, and have warned that its repeal could lead to lower state revenue. 

Rep. Susan Almy, a Lebanon Democrat and the former chairwoman of the House Ways and Means Committee, has filed two bills in the past two years intending to restore the interest and dividends tax; both bills, House Bill 192 and House Bil 1492, were defeated unanimously on the House floor. No sitting House Democrat has filed legislation to restore the tax in 2025, according to a list of legislative service requests in the New Hampshire House.