Hassan approves larger deductions under business profits tax

On Wednesday, June 22 Gov. Maggie Hassan signed SB 239, a bill that brings New Hampshire’s business tax code in line with the federal tax code.  SB 239 also increases the capital expense deduction for small businesses from $25,000 to $100,000, starting in 2017.  

“These changes will encourage small business owners to invest in their companies by incentivizing the purchase of new equipment, helping small businesses to grow and thrive,” said Sen. Jeb Bradley.  

Due to the rules regarding tax deductions for depreciation, supporters argue that increasing the capital expense deduction will not decrease state revenue in the long term.

“It’s purely a matter of timing,” said Sen. Andy Sanborn. 

However, the Department of Revenue Administration estimated that SB 239 could decrease next year’s business tax revenue by roughly $13 million. 

Sen. Lou D’Allesandro also noted that there are a few large business tax changes coming in the next two years, and lawmakers are not yet sure how those changes will impact state revenues.

“I appreciate the sentiment there, but I also recognize that will cost the state of New Hampshire $13.2 million in revenue.  So I think we have to be judicious about this,” said D’Allesandro. 

Do you support a larger tax deduction for a business’s equipment purchases?  Let us know in the comments.