NH bill would allow municipalities to up taxes on business property

Communities could have separate commercial/industrial rates under House measure

New Hampshire businesses might have to pay a lot more in property taxes under a bill introduced Wednesday in the New Hampshire House.

Rep. Robert Harb, R-Plaistow, said he is sponsoring House Bill 1467 because residential property rates have skyrocketed in his town, while commercial/industrial rates have hardly changed at all. His bill wouldn’t change the assessment process, but would enable municipalities to increase the commercial/industrial tax rate by as much as 150% of the residential rate.

“It’s a way to attempt to set right the commercial and industrial rate,” he told the House Municipal and County Government Committee in a late afternoon hearing. “It might help people with their residential tax bills.”

He also added that, because it would be enabling legislation, “no town would be forced to do it.”

That’s the way it’s handled in Massachusetts, where the median commercial rate of $17.50 per $1,000 in assessed value is more than $2 higher than the residential rate. But while many smaller towns have the same rate, Boston’s commercial rate is $24.93, and its residential rate is $10.56. Lowell’s commercial rate is $26.77 compared to a $13.36 residential rate, and Lawrence’s commercial rate is $26.80 compared to a $12.43 residential rate.

While Massachusetts’ constitution allows towns to set disparate rates, in New Hampshire the constitution requires the state “to impose and levy proportional and reasonable assessments, rates and taxes, upon all the inhabitants of, and residents within,” which has been interpreted by the courts as the “the same tax shall be laid, upon the same amount of property, in every part of the jurisdiction levying it.”

When lawmakers asked Harb whether his bill was constitutional, he said he was assured that “it is not unconstitutional.”

“If I had to pay more because I was industrial, I would appeal it,” said Rep. Clyde Carson, D-Warner, who chairs the committee.

“You can’t appeal a rate,” replied Herb. “That is set by the municipality. You can only appeal an assessment.”

Actually, under the bill, the final rate would be set by the state Department of Revenue Administration, as it does now, only it would be guided by the ratio of the commercial-to-residential ratio set by the municipality.

Even without a higher commercial rate, businesses in New Hampshire pay more in commercial property taxes than they do in business taxes.

“We oppose this bill that is designed to shift the tax burden from residents to businesses,” testified David Juvet, senior vice president of public policy at the Business and Industry Association of New Hampshire.

Juvet argued that it was unconstitutional, but more importantly, “It is the wrong road.”

Businesses would shun towns that had higher tax rates, he warned.

That was the same concern of Robert Gagne, who heads the Manchester Assessors Office.

“The unintended consequences is you might drive development to other towns,” he said, but added that he was not taking a position on the bill.

No one spoke in favor of it.

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