March 5, 2014; New Hampshire Public Radio
A bill that would have required large nonprofit organizations in New Hampshire to pay business enterprise taxes was finally killed in the legislature. In January, David Hess (R-Hookset) introduced legislation that would have required nonprofits that earn more than $2 million in fees for service annually to pay the tax that is currently paid by businesses in the state with more than $150,000 in gross receipts.
According to the New Hampshire Dept. of Revenue Administration, the Business Enterprise Tax (or BET) “is assessed on the enterprise value tax base, which is the sum of all compensation paid or accrued, interest paid or accrued, and dividends paid by the business enterprise, before special adjustments and apportionment.” Currently the BET stands at 0.75 percent; Hess’s legislation would have reduced that to 0.68 percent by including hospitals, universities, and other large nonprofits.
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The bill targets organizations “which receive a substantial amount of their revenue from “program service revenue,” according to Hess. The bill was voted down by a 173-163 vote that was mostly along party lines, with nine Republicans joining all of the Democrats in voting against the bill.
The chair of the House Ways and Means Committee, Susan Almy, a Democrat, called for the bill to be killed—not even kept alive for study—saying that it would put fragile nonprofits at too much risk.
The bill would also open the door to taxing nonprofits for earned revenue, which even the IRS will not touch so long as it is related to the mission of the organization.—Rob Meiksins