SB 149-FN-A-LOCAL – AS INTRODUCED
2011 SESSION
09/04
SENATE BILL 149-FN-A-LOCAL
AN ACT relative to the rate of the meals and rooms tax and the distribution formula for meals and rooms tax revenue.
SPONSORS: Sen. Stiles, Dist 24; Sen. Bradley, Dist 3; Sen. Carson, Dist 14; Sen. De Blois, Dist 18; Sen. Gallus, Dist 1; Sen. Lambert, Dist 13; Sen. White, Dist 9; Rep. K. Sullivan, Rock 15; Rep. K. Murphy, Hills 18
This bill reduces the rate of the meals and rooms tax and changes the distribution formula for meals and room tax revenue distributed to towns, cities, and unorganized places.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
11-0456
09/04
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Eleven
AN ACT relative to the rate of the meals and rooms tax and the distribution formula for meals and rooms tax revenue.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Meals and Rooms Tax Rate Reduced. Amend RSA 78-A:6 to read as follows:
78-A:6 Imposition of Tax.
I. A tax of [9] 8 percent of the rent is imposed upon each occupancy.
II. A tax is imposed on taxable meals based upon the charge therefor as follows:
(a) [Four] Three cents for a charge between $.36 and $.37 inclusive;
(b) [Five] Four cents for a charge between $.38 and $.50 inclusive;
(c) [Six] Five cents for a charge between $.51 and $.62 inclusive;
(d) [Seven] Six cents for a charge between $.63 and $.75 inclusive;
(e) [Eight] Seven cents for a charge between $.76 and $.87 inclusive;
(f) [Nine] Eight cents for a charge between $.88 and $1.00 inclusive;
(g) [Nine] Eight percent of the charge for taxable meals over $1.00, provided that fractions of cents shall be rounded up to the next whole cent.
II-a. A tax of [9] 8 percent is imposed upon the gross rental receipts of each rental.
III. The operator shall collect the taxes imposed by this section and shall pay them over to the state as provided in this chapter.
2 Disposition of Revenues. Amend RSA 78-A:26, I(b) to read as follows:
(b) Forty percent to the unincorporated towns, unorganized places, towns, and cities to be distributed as follows:
(1) Fifteen percent of the total amount to be distributed to each town, place, or city based upon the revenue collected under this chapter to be determined by multiplying the amount to be distributed by a fraction, the numerator of which shall be the amount of revenue collected by the unincorporated town, unorganized place, town, or city and the denominator of which shall be the total amount to be distributed.
(2) Eighty five percent of the total [The] amount to be distributed to each [such] town, place, or city based upon population which shall be determined by multiplying the amount to be distributed by a fraction, the numerator of which shall be the population of the unincorporated town, unorganized place, town or city and the denominator of which shall be the population of the state. The population figures shall be based on the latest resident population figures furnished by the office of energy and planning.
3 Effective Date. This act shall take effect July 1, 2011.
LBAO
11-0456
02/10/11
SB 149-FN-A-LOCAL - FISCAL NOTE
AN ACT relative to the rate of the meals and rooms tax and the distribution formula for meals and rooms tax revenue.
FISCAL IMPACT:
The Department of Revenue Administration and Treasury Department states this bill will decrease state general fund revenue and education trust fund revenue, and state expenditures and local revenue by an indeterminable amount in FY 2012 and each year thereafter. This bill will have no fiscal impact on county and local expenditures, or county revenue.
METHODOLOGY:
The Department of Revenue Administration states this bill decreases the meals and rooms tax rate from 9% to 8% effective July 1, 2011. The Department states based upon cash received in FY 2010 taxable Meals and Rooms sales, excluding commissions, were $2,548,061,689. The Department estimates Meals and Rooms sales at $2,722,222,222, in FY 2011, based on previous Legislative estimates. Assuming historical sales growth, the Department does not anticipate future sales growth would exceed 5% from FY 2011 to FY 2012. The Department states if sales remained at the FY 2011 budgeted level, a reduction in the Meals and Rooms tax rate from 9% to 8% would decrease revenue by approximately $27,222,222 ($2,722,222,222 X 1%). If, however, New Hampshire experiences a 5% increase in sales due to an economic recovery and reduction in the Meals and Rooms tax rate, then the Department estimates revenue would decrease by approximately $16,333,333 [$245,000,000-(($2,722,222,222 X 1.05%) X 8%)]. The Department is unable to provide an estimate of the potential fiscal impact beyond FY 2012.
The Treasury Department states any decrease in Meals and Rooms revenue would decrease the distribution amount to cities and towns from the State pursuant to the formula contained under RSA 78-A:26. The bill also changes the distribution formula for Meals and Rooms revenue to towns, cities, and unorganized places. The change in the formula will have no fiscal impact on the total state distribution to local cities and towns, but will impact each city and town’s portion of such distribution.