Q&A with Revenue Commissioner John Beardmore

Photo by Jodie Andruskevich
‘We are auditing to ensure fairness in the tax system in the first instance|!!| not to raise money for the state|!!|’ says John Beardmore|!!| commissioner of the state Department of Revenue Administration.

John T. Beardmore took over as the state’s commissioner of the Department of Revenue Administration in 2010. He had earlier served as a staff auditor for the Legislative Budget Assistant, was budget director in the Lynch administration and director of administration at the Department of Safety.

Q. What brought you to New Hampshire?

A. I grew up in Lunenburg, Mass., and went to UNH. I knew as an undergrad that government was really what I wanted to do. I’ve been in a number of jobs where staff looks at each other and says, “Didn’t we always dream of this?” – jokingly. And I say, “Yeah, I kind of did.

Q. In your role in working on state budgets under Governor Lynch and in the Legislature, were you involved in developing any of the controversial taxes affecting business?

A. The Medicaid enhancement tax, yes, the rest of them, no.

In the 2010 budget, there were changes to the Disproportionate Share Hospital program, under which hospitals received reimbursement for uncompensated care. The reimbursement is funded in part through the Medicaid enhancement tax – the MET. The state took half of it, put it in uncompensated care, the other half in the general fund.

The uncompensated care fund dollars were matched with federal funds back to the hospitals. Governor Lynch proposed using MET dollars [instead] to fund provider Medicaid payments. His proposal was $25 million. The Legislature tripled that. Hospitals began paying closer attention to what they were paying in the MET.

Q. Has the DRA been more aggressive with business taxes, reinterpreting laws that have been on the books for a while?

A. The audit staff has halved from about 40 to about 20. For two years, the audit division has been rebounding from a halving of its staff.

Q. With this rebound, are you going to have more audits?

A. This Legislature did give the department the ability to hire some more auditors, and we are hiring.

Q. How many employees are you up to now?

A. As a department, we are at 120 bodies out of 150 authorized.

Q. How many were added since the low point?

A. Maybe 10. We are looking at all tax types within our audit division. Not just BET and BPT.

Q. The Medicaid tax. It’s not just a budget matter, but an interpretation of what could be taxed that you are dealing with now?

A. Very much so. What you are talking about is a technical information release, TIR, responding to questions the hospitals have of us: How does the department interpret whether revenue from certain services is taxable? Now some have publicly said they disagree. We can either put it in writing now or audit against our understanding of the law later.

Q. That has been a criticism in the past: You’ll find out by audit. Are trying to change that?

A. That’s not helpful for me to say. What I want to say about my goals is that I want to communicate with the business community [and] people who represent them, the tax bar, the CPAs, the tax preparers. If they raise questions, I’m happy to at least try to put our perspective in writing. It makes it clear what our expectation is and makes clear to the Legislature and the governor what our interpretation is, and if they disagree they’ll change it.

Q. What are hospitals disagreeing with?

A. A few questions are of greater concern: Is the revenue from outpatient lab services taxable or not? There is also disagreement about whether outpatient services that are not covered by Medicaid are taxable. For example, cosmetic surgery.

Q. You have goals in terms of number of audits?

A. That’s a dangerous goal to have. We are auditing to ensure fairness in the tax system in the first instance, not to raise money for the state.

Q. In the past, there was criticism that it was the other way.

A. I saw in broad daylight statements made [in the Legislature] that if we hired auditors we will bring in more revenues. Yeah, that happens. But you won’t see me leading the charge to hire more auditors to raise more revenue. What we need is more of a presence in a certain area to ensure fairness. That’s why we focus new auditors on areas that haven’t seen the auditing that other areas have, like the Medicaid enhancement tax, the nursing home quality assessment tax and the communication services tax.

Q. So there isn’t going to be more or less concern in the business profits tax area?

A. I think it’s going to stay the status quo.

Categories: Q&A