HB 623-FN-A - AS INTRODUCED
2003 SESSION
09/10
HOUSE BILL 623-FN-A
AN ACT repealing RSA 77, relative to taxation of incomes.
SPONSORS: Rep. Phinizy, Sull 23; Rep. J. Pratt, Ches 24; Rep. Franklin, Sull 20; Rep. DiFruscia, Rock 76; Rep. Jacobson, Merr 32
This bill repeals RSA 77, relative to taxation of incomes.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
03-0315
09/10
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Three
AN ACT repealing RSA 77, relative to taxation of incomes.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Reference Deleted. Amend RSA 21-J:31 to read as follows:
21-J:31 Penalty for Failure to File. Any taxpayer who fails to file a return when due, unless an extension has been granted by the department, shall pay a penalty equal to 5 percent of the amount of the tax due or $10, whichever is greater, for each month or part of a month during which the return remains unfiled. The total amount of any penalty shall not, however, exceed 25 percent of the amount of the tax due or $50, whichever is greater. This penalty shall not be applied in any case in which a return is filed within the extended filing period as provided in [RSA 77:18-b,] RSA 77-A:9, RSA 77-E:8, RSA 83-C:6, RSA 83-E:5 or RSA 84-A:7, or the failure to file was due to reasonable cause and not willful neglect of the taxpayer. The amount of the penalty is determined by applying the percentages specified to the net amount of any tax due after crediting any timely payments made through estimating or other means.
2 Reference Deleted. Amend RSA 21-J:33-a, I to read as follows:
I. If there is a substantial understatement of tax imposed under [RSA 77,] RSA 77-A, RSA 77-E, RSA 78-A, RSA 78-C, RSA 82-A or RSA 83-C, or RSA 83-E, for any taxable period, there shall be added to the tax an amount equal to 25 percent of the amount of any underpayment attributable to such understatement.
3 Repeal. The following are repealed:
I. RSA 77, relative to taxation of incomes.
II. RSA 195-H:10, relative to the exemption from the interest and dividends tax for funds invested in college tuition saving plans.
III. RSA 261:52-a, relative to notice that the interest and dividends tax may be due.
IV. RSA 369-B:5, VI, relative to taxability of rate reduction bonds under RSA 77.
V. RSA 391:3, relative to the taxation of common trust funds under RSA 77.
4 Applicability. This act shall apply for taxable periods ending on or after July 1, 2003.
5 Effective Date. This act shall take effect July 1, 2003.
LBAO
03-0315
Revised 2/13/03
HB 623 FISCAL NOTE
AN ACT repealing RSA 77, relative to taxation of incomes.
FISCAL IMPACT:
The Department of Revenue Administration indicates this bill will decrease state unrestricted general fund revenues by $45.4 million in FY 2003, $80.6 million in FY 2004, $83.0 million in FY 2005, and $89.8 million in FY 2006, and decrease state expenditures by $250,000 in FY 2004 and each year thereafter. There is no fiscal impact on county and local revenues or expenditures.
METHODOLOGY:
The Department states this bill will eliminate the interest and dividends tax which will decrease both state revenue and expenditures. The Department estimates that expenditures to administer the tax will decrease by $250,000 per year. This total includes cost savings from no longer printing, mailing, processing, auditing and collecting interest and dividends tax returns. The Department states that although the bill has an effective date of FY 2004, revenue will decrease by $45.4 in FY 2003. This decrease reflects tax estimates due in April and June 2003 for calendar year 2003 that would no longer be required. Revenue is estimated to decrease by $80.6 million in FY 2004, $83.0 million in FY 2005, and $89.8 million in FY 2006 based on a projected tax growth rate of 2% for FY 2004, 3% for FY 2005, and 8% for FY 2006. The Department states an additional indeterminable amount of Business Profits Tax, not reflected in the above estimates, will be realized in FY 2004 and each year thereafter, as the Business Profits Tax deduction for Interest and Dividends tax is lost.