SB 80-FN-A-LOCAL –AS INTRODUCED
2011 SESSION
09/01
SENATE BILL 80-FN-A-LOCAL
AN ACT exempting certain rental income from the meals and rooms tax.
SPONSORS: Sen. Boutin, Dist 16; Sen. Barnes, Jr., Dist 17; Sen. Lambert, Dist 13; Rep. Warden, Hills 7; Rep. Major, Rock 8; Rep. Bettencourt, Rock 4; Rep. Griffin, Rock 4
This bill exempts rental income derived from renting a second home for no more than 12 weeks annually from the meals and rooms tax.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
11-0948
09/01
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Eleven
AN ACT exempting certain rental income from the meals and rooms tax.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Meals and Rooms Tax; Rental of Second Home Exempted. Amend RSA 78-A:3, VIII(c) to read as follows:
(c) The term “rent” does not include:
(1) Rental charges for living quarters, sleeping, or household accommodations to any student necessitated by attendance at a school as defined in this section[; or].
(2) Rental charges for living quarters, sleeping or household accommodations necessitated by the partial or complete destruction of a person’s permanent residence.
(3) Rental charges for one vacation home rented for no more than 12 weeks annually.
2 Effective Date. This act shall take effect July 1, 2011.
LBAO
11-0948
01/27/11
SB 80-FN-A-LOCAL - FISCAL NOTE
AN ACT exempting certain rental income from the meals and rooms tax.
FISCAL IMPACT:
The Department of Revenue Administration states this bill will decrease state revenue by an indeterminable amount in FY 2012 and each year thereafter. This bill will have no fiscal impact on state, county, and local expenditures, or county and local revenue.
METHODOLOGY:
The Department of Revenue Administration states this bill exempts rental income derived from renting a second home for no more than 12 weeks annually from the meals and rooms tax. The Department states although the law could be administered by the Department without any additional cost, it would eliminate an audit program currently in place to identify taxpayers who should be filing Meals and Rentals (M&R) tax returns and paying the tax under current law. Future auditing revenues would be slightly reduced as a result. The Department assumes many businesses would reorganize so that they could take advantage of this exemption. Many current M&R filers would no longer pay the tax and the state could lose more revenue than the revenue currently received from taxpayers who fall into the category of only renting their property for 12 weeks annually. In an attempt to estimate a maximum loss, the Department reviewed all M&R tax returns filed for taxable periods ending in FY 2010. Those returns with M&R licensing business activity codes indicating that they had “House/Chalet/Camps/Cottages and Condo Rentals” were segregated. This represented 1,485 M&R operators who paid $3,486,432 in tax for FY 2010. Of the these segregated operators the Department identified 793 that filed only three M&R tax returns or fewer in FY 2010, and these operators paid $867,923 in tax for FY 2010. The Department is unable to determine if the revenue impact will be at the high or low end of the range ($867,923 to $3,486,432 annually), but states the maximum loss could be more depending on taxpayer’s business decisions. The exact fiscal impact cannot be determined at this time.