Credit carryforward goes long



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It looks as if the New Hampshire House will go along with the Senate's changes to a bill that would double to 10 years the current carryforward period on the business enterprise tax credit against the business profit tax.That means if the full House goes along with the recommendation the House Ways and Means Committee made on Tuesday, businesses won't be getting the tax break they sought for two years, if at all.Under the House version, the change was supposed to be phased in starting next year over five years. Thus, businesses next year would be able to carry forward the loss for six years, the following year seven, etc.But after the Department of Revenue Administration complained that administration of the change would be a nightmare, the Senate decided to implement the change all at once, starting on July 1, 2014.That means no relief for businesses before that date, and more relief after it -- if, of course, the Legislature doesn't change its mind before then and puts off the relief altogether for budgetary reasons, or there's a shift in the political winds against handing out tax breaks for business.How much relief could businesses have gotten under the bill?According to the DRA, the state expected to lose $19 million when the bill was phased in. The House - suspicious of any estimate by the DRA -- disputes this, but whatever the number is, the state treasury won't feel it until after the next election.Meanwhile, the fate of another business tax break - increasing the net operation loss carryover deduction from $1 million to $10 million - may still survive this year as part of the give-and-take over budget cuts. Ironically, the House and Senate never passed the bill, worried about the fiscal impact.The House retained House Bill 242 and the Senate tabled its version, Senate Bill 126. But the Senate included it in SB 2, the budget trailer bill. -- BOB SANDERS/NEW HAMPSHIRE BUSINESS REVIEW

 

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