Week Five - February 05, 2010

This electronic publication, known as The Advocate, is brought to you each Friday by your Greater Nashua Chamber of Commerce, in partnership with our friends at Devine Millimet & Branch, and ActiveEdge. Please use this piece to review what has happened in Concord this past week, read about our Chamber's lobbying efforts relating to those activities, and preview what we are doing on behalf of our Chamber members in the coming week.

This Week’s Update

Lots to cover this week in the Advocate.

DRA Unkind On “Like-Kind”, Say Witnesses on SB 483

On Tuesday, the Senate Ways and Means Committee held a hearing on SB 483. This bill, which the Chamber supports, exempts from the BPT those gains or losses arising from “like-kind” exchanges of property, to the same extent that those exchanges are recognized under federal law.

From the testimony at the hearing, it was apparent that New Hampshire businesses - and, more importantly, CPAs - were operating under the impression that these exchanges were protected in New Hampshire to the same degree that they are under federal law. It appears, however, that DRA recently began cracking down on the application of the New Hampshire law, which in the eyes of DRA is different than what the IRS requires. This clearly caught a lot of people by surprise. One understandably disgruntled citizen who testified at the hearing received a tax bill of $486,000 from DRA after he had carefully crafted an exchange of property in accordance with what he and his CPA thought was an appropriate method. This does not seem to have been an isolated incident. DRA took no position on the bill, although a representative of the Department testified that this did not result from any new interpretation of the law by DRA (big surprise, right?).

The Senate Committee members seemed very skeptical about that. They recessed the hearing to get some further information from the chief of the DRA audit division about how this happened.

It would appear that New Hampshire is one of only two states in the country that treats these exchanges differently than does the IRS. As one witness at the hearing put it, businesses are not going to come into New Hampshire and get involved in these types of sales if they feel that there is even a question that they might be liable for a tax like this. As he concisely said, the businesses won’t come in if they feel that they can’t get out again.

It is obviously critical for businesses to receive fair and adequate notice of any changes in state policy that affect their operations or the taxes they pay. We will be interested in hearing what DRA has to say when the hearing resumes.

Bullying Bill on the Way Out?

This week, the House Labor Committee held a work session on HB 1403, the legislation that seeks to prohibit “bullying” in the workplace. This is a bill that the Chamber opposes, because it seems tailor-made to turn personality disputes or even legitimate disciplinary initiatives into lawsuits against employers. The work session got off to a good start, with Representative Jeff Goley, the Chairman of the Committee, noting that the only testimony in favor of the bill had come from a couple of people who had worked for the same employer. He said that he didn’t think that it seemed appropriate or necessary to pass legislation under those circumstances. The Committee seemed to be largely in agreement with his sentiments. We’ll know better when the Committee votes on HB 1403 on Tuesday.

New Winds Blowing On The Floor Of The House?

On Wednesday, the House took the rare step of reversing a recommendation from the House Finance Committee by voting to pass HB 1128, which repeals a statute passed last year to eliminate distributions to cities and towns from the State’s meals and rooms tax. This paves the way for the local communities to receive $5M in payments. The vote was 189 to 169. This is a notable development, because the size of the vote shows that both Republicans and Democrats joined together to pass the bill. And even though the House then voted to kill HB 1272, which would have provided $25M in additional revenue sharing to cities and towns, the vote on that one was 191 to 172 (so a switch of only 10 votes would have swung the outcome.)

This all seems to signal a renewed interest on the part of the House concerning the way that the State’s budget and spending decisions affect local communities. That is an encouraging development. Just because the State doesn’t spend a dollar does not mean that the State isn’t down-shifting the cost to local property tax payers.

Toot Toot

We hope that HB 1480, which would require that bonds issued by the NH Rail Authority be approved by a joint resolution of the legislature, may be becoming less burdensome. The Committee seems to be leaning towards capping the amount that can be bonded, and removing the requirement of legislative approval. State Treasurer Catherine Provencher related to committee members that she did not want the State to take on any additional liability. The sponsors want the legislature to be kept aware of the Rail Authority’s activities. Perhaps the Authority should report to the legislature on an ongoing basis? A cap of $300M has been suggested.

Credit Against the Interest & Dividends Tax For Taxes Paid to Other States

Our own State Advocacy Committee Chair David Heath, of Melanson, Heath & Company, traveled to Concord this week to testify on HB 1604, a bill that establishes a credit against the Interest & Dividends tax for taxes paid to other states. David testified that double taxation among states needs to be addressed. Most states have uniform credit policies whereby the resident state credits you for taxes paid in other states. But New Hampshire is unique in its tax structure. Forty-six states parallel the federal tax systems, but not New Hampshire. No other states have LLC distributions. The DRA is being contacted to testify at the next work session. This is one more example of New Hampshire tax policy being out of sync with what other states are doing. Although we can be proud of many of our idiosyncrasies here, these tax issues are one area where it doesn’t pay to be different.

Chamber Says Goodbye to Teresa Rosenberger

Many of you have come to know Teresa Rosenberger, our Chamber’s chief lobbyist in Concord from Devine Millimet & Branch. Teresa has been with the firm for a number of years, and was our chief representative in the halls of Concord almost the entire time she was with Devine Millimet.

Today is Teresa’s last day with the firm, and therefore her last day representing our Chamber in Concord.

She is leaving to take an exciting new position as New Hampshire’s State President of Fairpoint Communications.

While we’re tremendously excited for Teresa to take on this new position, we will miss her dearly in Concord. She has fought tirelessly on our behalf, and has been directly responsible for many of our good relations that we enjoy with various state legislators, and for the expert intelligence we were able to provide elected officials on matters of interest to our business.

Teresa, we’re proud of you and your work on our behalf, and look forward to partnering with you in your new capacity at Fairpoint Communications!

Acknowledgements

This weekly update is made possible by the generous support of Devine Millimet & Branch, one of the state’s top law firms and our Chamber’s contracted representative in Concord. If your business has a legislative or local issue that needs strategic consulting and attention, they are a valuable resource that can help navigate you through both local and state processes.

This weekly update is designed and maintained by our friends at ActiveEdge, and we thank them for their help in delivering this piece to your inbox every Friday!

If you have questions about this update, or comments to share with us about other issues in Concord, please email Chris Williams at cwilliams@nashuachamber.com. We want to be sure we're representing you to the best of our ability, so do not hesitate to reach out to us!

J. Christopher Williams
President & CEO
Greater Nashua Chamber of Commerce
151 Main St.
Nashua, NH 03060
Phone: 603.881.8333
Fax: 603.881.7323