$2 million NH R&D tax credit cap exceeded again
184 businesses receive less than 30% of the amount they sought
Some 184 New Hampshire businesses were awarded $2 million in research and development tax credits in the 2015 fiscal year, Gov. Maggie Hassan announced Monday. But what they received is less than 30 percent of the amount they had sought because demand again exceeded the program’s cap.
That means that qualifying businesses will be getting a maximum credit of $14,870 instead of the $50,000 they would have received had there not been a $2 million cap on the total amount of credits issued.
This was the smallest percentage given out since the cap was doubled to $2 million in 2013, when the total request value was $5.7 million. Businesses at the time received about 35 percent of what they asked for. In 2014, businesses would have been entitled to get $6.2 million with no cap. They got 31.6 percent. And in fiscal 2015, the total requests were slightly more than $6.725 million, and businesses received slightly about 29.75 percent of what they sought.
Most states with an R&D tax credit don’t have a cap, and business groups have been strong advocates of lifting or eliminating it in New Hampshire. Indeed, for the Business and Industry Association of NH and the NH High Tech Council, lifting the cap was a bigger priority in the last legislative session than the slight reduction in business tax rates. Those rate reductions were among the key sticking points that contributed to Hassan’s veto of the budget, which indeed lifted the R&D credit cap from $2 million to $7 million, although not until 2017.
In their joint press release, both Hassan and Department of Revenue Administration Commissioner John Beardmore focused on the break that businesses would actually receive.
Hassan noted that she supported doubling the R&D Tax credit in 2013.
“Our R&D tax credit program is an important tool to support job-creating businesses across the state, helping them invest in the development of new, innovative technologies that spur economic growth and job creation,” Hassan said. She promised to work with the Legislature ”to keep state government responsive to the needs of the business community, build on our bipartisan efforts to support innovative businesses and keep New Hampshire’s economy moving in the right direction.”
“New Hampshire’s R&D tax credit program provides a boost to businesses of all sizes and from every corner of the state,” Beardmore added. “And for the third year in a row, 75 of the companies receiving the tax credit reported less than $500,000 of qualified wages, demonstrating that the program continues to support smaller businesses in their efforts to grow and create jobs.”