End the meals and rooms tax vendor fee
To the editor:
In 1967, New Hampshire enacted a sales tax.
It’s only on prepared meals, room and vehicle rentals. We pay 9 percent, which goes into state coffers – well, most of it. Businesses offering the aforementioned retain a 3 percent commission for collecting the tax, recordkeeping and sending in by the 15th of the month. I’m told that calculating and submitting takes about 10 minutes. Last year, commissions topped $9 million – a lot in a state where we don’t fund priorities because we don’t have the money.
The Federation of Tax Administrators compiled a list of state sales taxes and vendor discounts (commissions). It lists information on general sales taxes. Accordingly, New Hampshire is listed as “N/A” with footnote #11: NH imposes a 9 percent tax on meals and rooms with a 3 percent vendor discount. Twenty-eight states allow vendor discounts, most with caps of $25 to $500 per month. Sixteen states have no discount; every customer dollar goes to the state. All of our New England neighbors are in this no-vendor-discount group.
Our 9 percent tax increases credit card swipe fees. Our 20 percent tip increases them more than twice as much. Nationwide, the majority of transactions use credit cards whether vendor discounts are capped or not permitted. Tax or tip, these fees are costs of doing business and thus deductible.
In the interest of protecting small business and covering the actual costs of filing the meals and rooms return, I sponsored House Bill 1710 capping commissions at $100 per month. This new revenue will be dedicated to school building aid – a program that had helped fund school construction and renovation sorely needed in many communities.
The entire cost of these projects now falls on local property taxpayers. Had HB 1710 been in effect last year, more than $6 million would have been available to address the backlog of projects. The state’s share of these exceeds $200 million; $6 million is a drop in the bucket but it’s a start.
HB 1710 raises neither tax nor fee, only revenue from money customers spend now. Please contact your legislators and ask them to support the bill.
NH Rep. Michael Cahill