NH Senate OKs $60 million tax credit for business investment

Small Business Jobs Fund Act aimed at boosting ‘growth’ industries

The NH Senate on Thursday unanimously voted, without debate, to create the Small Business Jobs Fund, a new $60 million tax credit program for large private equity investors who invest in small “growth” companies based in New Hampshire.

The investors would be able to use the credits against the business profit tax, the business enterprise tax or the insurance premium tax over a four-year period, starting three years after the deal is closed. Therefore, Senate Bill 205 won’t affect this year’s budget, aside from about $120,000 annually to hire an additional staffer at the NH Department of Resources and Economic Development.

Still, the Small Business Jobs Funds is perhaps the most ambitious new program to be funded by a Legislature that has drawn back from other initiatives, such as diverting $6.5 million from the unemployment compensation trust fund for job training. (Last week, the Senate had passed that job training bill to its Finance Committee, which then recommended killing it. On Thursday, the full Senate voted to send it back to the committee and then tabled it.)

Under SB 205, only investors and affiliates that can show they have invested $100 million in non-public companies could apply for the tax break, with a $5,000 nonrefundable deposit. An investor could invest up to $5 million in a company, which would have to have fewer than 250 employees and less than $10 million in net income.

The company must be involved in “industries related to manufacturing, plant sciences, agribusiness, mining, clean energy, cybersecurity, information technology, defense, life sciences, biotechnology” or some other endeavor that DRED deems highly beneficial to the state. That would include companies that would relocate here.

The investment would have to comprise of at least 60 percent of the capital raised. And the investors would have to present a business plan that would show that the positive impact on the economy would exceed the amount of the tax credits to be issued.

And if the company does do as well as planned, the investors would have to share some of their profits with DRED.

If the bill is passed by the House, and is signed by the governor, it will go into effect on July 1.