MANCHESTER — Republican candidate for governor Ovide Lamontagne proposes two new business tax credits, a reduction in the Business Profits Tax and simplification of the state's tax rules in the first part of his “prosperity agenda” for New Hampshire.
Obtained exclusively by the New Hampshire Union Leader and UnionLeader.com on Thursday, Lamontagne's “ESE Business Tax Reform Strategy” is designed “to encourage entrepreneurial growth and jobs, to enhance New Hampshire's competitiveness, to simplify New Hampshire's tax rules and to keep our budget balanced,” Lamontagne said.
“ESE,” pronounced “easy,” stands for “Encourage, Simply, Enhance,” the Lamontagne campaign said.
Lamontagne begins by re-stating his pledge to veto any broad-based sales or income tax legislation.
He then calls for cutting the Business Profits Tax (BPT) rate from 8.5 percent to 8 percent over two years.
He proposes a new Business Enterprise Tax (BET) credit that would be based on compensation paid to new full-time employees in new production or manufacturing jobs as a way to encourage such employers to hire new workers.
A new BET Student Loan Relief Credit would encourage employers to help pay off an employee's outstanding student loans, Lamontagne said.
“It is imperative that we do more to stop the talent drain in New Hampshire, and work to create opportunities for our youth,” the Lamontagne plan says. “This credit would help provide jobs to newly-trained graduates.”
It would be allowed “only to the extent regular wage compensation is at levels regularly paid to employees with similar responsibilities,” he said.
Lamontagne would also allow businesses to carry forward their BET credits paid against the BPT without any time limitation. He said the current Republican-controlled Legislature doubled the time period from a five-year to a 10-year carry-forward, effective in 2014, “which means that some small or new businesses unfairly pay additional BPT on their operations due to the artificial loss of the BET credit. We can do better by removing all time limits.”
Lamontagne's plan also calls for increasing the BPT and BET filing thresholds so that no business is required to file a return for either tax until their gross receipts exceed $200,000.
The plan also calls for making the research and development tax credit permanent. The Legislature has extended it for two years but efforts to make it permanent were unsuccessful. Lamontagne also calls for “streamlining the application process” for that credit.
Lamontagne would also try to enact a “single sales factor rule” for determining how much of a multi-state business's income is apportioned to New Hampshire. He would allow businesses to deduct up to $80,000 as “reasonable compensation” for each working owner without being challenged by the Department of Revenue Administration.
To simplify the tax code, Lamontagne's plan calls for a new Plain Writing Act that would require the revenue department to issue rules, forms and publicans “in very clear, concise words that the public can easily understand and use.”
He would allow related businesses to file a single combined tax return for all entities and would clarify laws regarding the transfer or real estate between nonprofit organizations.
Lamontagne said that as a believer in the “pay-go” principle, “to the extent that my tax reform proposals would lead to reduced revenues from business taxes, I would require a commensurate reduction in state spending so that my proposals would be revenue neutral.
“My campaign is about jobs and getting our economy back on track, and the strategy laid out in my ESE business tax reform strategy is a strong and important start to accomplishing this objective,” Lamontagne says.
Lamontagne's Republican primary foe, Kevin Smith, has already released part of his economic plan, which also includes a BPT cut and BET reform.