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From the current print issue of NHBR
NHBR Article
BIA urges fast-track LLC tax repeal; Seacoast hearing urged
Wednesday, January 6, 2010
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The Business and Industry Association of New Hampshire has added its voice to the chorus of those seeking a fast-track repeal of the extension of the state’s 5 percent interest and dividends tax on distributions from LLCs and partnerships.
“The debate over this tax expansion has shifted in recent weeks from a public policy discussion to a political and rhetorical football,” said BIA President Jim Roche. “The absence of input from anyone – let alone small businesses most affected by this provision – when the tax extension was added to the state budget in June has led to too much distrust, confusion, frustration and misunderstanding.”
According to Roche, “fundamental review and fairness were omitted in the passage of this tax.” He criticized the lack of an “open, public hearing process” last June, when the tax change was inserted as a last-minute revenue-raiser to help balance the state budget.
“Those who would be affected by the extension of the 5 percent interest and dividends tax on LLC and partnership distributions should have had the opportunity to speak to legislators in an open, public hearing process,” said Roche.
Meanwhile, officials from the Exeter, Portsmouth, Dover, Rochester, and Somersworth chambers of commerce, as well as the New Hampshire chapter of the National Federation of Independent Business and area members of the state Lodging and Restaurant Association have called for a public hearing in their region on the LLC tax rules.
Thus far, hearings have been held in Concord and Berlin, with others scheduled in Plymouth and North Conway.
“Our members have serious concerns regarding the manner in which this tax was implemented with no public comment,” said Mike Schidlovsky, president of the Exeter chamber. He added that the organizations “have questions regarding the constitutionality of this tax,” which he said “is akin to eating the goose that laid the golden egg.”
The BIA’s Roche said his organization and the New Hampshire Society of Certified Public Accountants were the only organizations to raise a red flag over the tax change when it popped up last June.
“We’re disappointed the DRA has, to date, not incorporated some of our key recommendations for meeting the dual objectives of fairness and efficacy,” said Roche. “A fast-track repeal of this tax is needed to restore trust in the legislative process and calm small business fears surrounding this matter. If the Legislature or DRA wants to propose the same or similar tax going forward, it should be done following appropriate legislative procedures, which include full public hearings in the bright light of day.” – JEFF FEINGOLD/NEW HAMPSHIRE BUSINESS REVIEW
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