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Republican Review | Volume 5 Issue 2 | February 12th, 2021


House Republicans & Friends Across New Hampshire,

As we continue to move our way through over 800 House bills, I want to take a moment to thank House Speaker Sherm Packard for putting together a successful model for conducting committee business. House Democrats demonstrated last biennium that managing this process is difficult, even in normal times. Their poor management led to a massive backlog of bills that caused an all-night House session and unfinished business. With their new minority status, they seem more content to obstruct business rather than working with us to move forward. Make no mistake, House Republicans will continue to fight for conservative principles and pass legislation that will improve the lives of all Granite Staters.

Governor Sununu unveiled his budget this week and I look forward to advancing our shared goals. The budget that the House passes will reduce business taxes, phase out the Interest and Dividends tax and will not raise or create any taxes or fees. We agree that where there is waste, we should create a more lean and efficient government.

We look forward to diving into these proposals and passing a budget that fulfills the major Republican promises that we made to the people of New Hampshire.

The House will meet on Wednesday, February 24th, and Thursday, February 25th at the NH Sportsplex facility at 68 Technology Dr. in Bedford, NH.

As a reminder, state offices will be closed on Monday, February 15, in observance of Presidents’ Day.

All the best,
Jason Osborne, House Majority Leader

Click here to view the latest House Calendar,
the official schedule of House business every week.
House Leaders Comment on Governor Sununu’s Budget Address

CONCORD – NH House Speaker Sherman Packard (R-Londonderry) and House Majority Leader Jason Osborne (R-Auburn) issued statements following Governor Sununu’s budget address.

Speaker Sherman Packard (R-Londonderry):

“Governor Sununu’s budget appears to be fulfilling several major Republican promises to the people of New Hampshire including tax cuts that will benefit our citizens and small businesses, increased government efficiency, and a voluntary paid family leave plan that does not create an income tax. This is the first part of the process, and there’s a long road ahead. I’m certain that the House and Senate will work with the governor to produce the best possible budget for our state in these challenging times.”

Majority Leader Jason Osborne (R-Auburn):

“There are several major themes in this budget that Republicans will and should embrace. One-time revenue should be spent on one-time projects. Over the last biennium we consistently saw the other party attempt to spend federal stimulus money on on-going projects that would have created a structural deficit. We agree that where there is waste, we should be creating a more lean and efficient government. We agree taxes and fees should not be raised, business taxes should be lowered, and the Interest and Dividends tax should be phased out. We look forward to diving further into these proposals and passing a budget out of the House that contains these shared goals.”

House Republicans Support Business Tax Relief

Concord, NH- House Majority Leader Jason Osborne (R-Auburn) and Deputy Majority Leader Laurie Sanborn (R-Bedford) released the following statements in response to the Senate hearing this morning of SB3, clarifying the tax treatment of federal Paycheck Protection Program loans, and protecting New Hampshire businesses from being taxed on Paycheck Protection Program (PPP) funds they received from the federal government.

“In order for businesses to survive through this pandemic, they have relied on funds, such as the PPP, that will not be taxed by the federal government and should not be treated any differently at the state level. It has been a priority of House Republicans to find a solution to protect our hardworking men and women without saddling them with additional taxes, and we support finding a solution to fix this mess,” said Rep. Osborne.

“At the same time, I am also glad to see Senator D’Allesandro is finally on board with business tax relief,’ continued Osborne. ‘I trust he and Senate Democrats will also support HB10 to reduce the Business Profits Tax and Business Enterprise Tax in order to help those struggling New Hampshire businesses that did not get the benefit of a federal bailout.”

“NH House Republicans will ensure that our employers will not have to pay state taxes on the CARES Act help they received,” said Rep. Sanborn. ‘So many NH businesses are struggling mightily just to survive due to the pandemic. Getting a big tax bill this Spring would be devastating to them. We want to do everything we can to give them confidence that they can thrive again. It will take legislative action to adopt the federal policy regarding the tax-free nature of COVID-related aid for businesses, which we will do.’”

Grover Norquist: Eliminate NH’s interest and dividend tax

NEW HAMPSHIRE is often said to be a no income tax state. But that is not exactly true.

While the Granite State does boast the absence of a tax on wage income, it still imposes a 5% tax on income earned from interest and dividends.

The interest and dividends tax is the reason New Hampshire appears with an asterisk by its name when listed as a no income state. To truly be considered a state that does not tax individual income, New Hampshire will have to eliminate its I&D tax.

There are now eight true no income tax states: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming.

Like New Hampshire, for years, Tennessee was often mistaken for a no income tax state when, in fact, it was not. While Tennessee also did not tax wage income, it did impose a 6% tax on investment income, which was known as the “Hall Tax.”

In order to make Tennessee more competitive, Republicans in 2016 put the Hall Tax on the path to zero. The rate was reduced to 5% that year, and then reduced by 1 percentage point every year until it was eliminated entirely for tax years beginning January 1, 2021 and beyond. Thanks to their leadership, Tennessee can now honestly say it does not tax individual income.

New Hampshire should follow suit. While New Hampshire has remained a competitive state thanks to its overall low tax burden — it is one of nine states that do not tax wage income, one of five states without a statewide sales tax, and one of four states that also ban the collection of local sales taxes — it should not get complacent.

Recognizing that more and more people and jobs are moving into no income tax states, roughly a dozen states are currently exploring ways to eliminate their individual income taxes. This movement will only grow, and as more states begin eliminating their income taxes and joining the list of true no income tax states, the more the asterisk by New Hampshire’s name will become a problem.

Another reason to eliminate the I&D tax is that it would end a form of double taxation. The source of interest and dividends are corporate profits. Those profits are taxed at the entity level.

When I&D taxes are imposed, that same business income is taxed again, at the personal level. This is a practice that economists and tax policy experts agree should not exist in an optimal tax climate.

Fortunately, Rep. Norm Silber’s House Bill 568, which is expected to be voted out of the House Ways and Means Committee with an ought-to-pass recommendation in the coming days, would solve these concerns.

If enacted, this pro-growth bill would hollow out the I&D tax by increasing the threshold to be subject to it over the next three years. In the fourth year, the I&D would be repealed entirely, and New Hampshire would become a true no income tax state.

HB 568 has a strong chance at becoming law this year. It has the maximum number of possible co-sponsors, including Rep. David Binford, Rep. Erica Layon, Rep. Carol McGuire, Rep. John Potucek, Rep. Maureen Mooney, Rep. Al Baldasaro, Rep. Jason Osborne, Senator Denise Ricciardi, and Senator Gary Daniels.

Making New Hampshire a true no income tax state is also a big priority for members of House and Senate leadership, as well as Gov. Chris Sununu, who called for a phase-out of the I&D tax in his Executive Budget Summary released earlier this week.

This is great news for all residents of New Hampshire, particularly seniors. Because the I&D tax applies to income that is typically used as savings, eliminating the I&D tax would give relief to retirees who live off investments.

Now is the time for New Hampshire to become a true no income tax state. Doing so would send a strong reminder to all about the Granite State’s longstanding commitment to low taxes, and ensure that New Hampshire remains competitive over the long term. Even as more states eliminate their income taxes.

Union Leader:

ABRAMI: The Case for Slow Implementation of Single Sales Factor

As Vice-Chair of the House Ways and Means Committee (HW&MC) and a member of that committee for eleven years, I have a unique perspective on state revenue streams. One of the more interesting, but at times confusing topic is the issue of apportionment of business taxes of companies that do business in multiple states. That is, what portion of profits can be taxed by each state.

Years ago, this question was a straight forward and logical. All states apportioned a third to the state that sales occurred, a third where tangible property was located, and a third of the payroll where staff were located. With time, states started to manipulate this formula to maximize the revenue to their state. Even New Hampshire moved to a double sales factor model, reducing the impact of the tangle property and staff location parts of the formula. The Federal Government has refused to step in to promulgate a unified approach. As a result, some businesses have tax obligations above a base calculated by NH tax law, and some businesses below the base because of the mix of the states they work in and the business income tax laws in those states.

To complicate matters, the issue of service companies providing services to customers in other states but with staff based in NH reared its head about four years ago. NH was a “cost of performance” state then, meaning where the service is performed gets the tax benefit. However, states around us started implementing “market-based source,” meaning where the benefit is received gets the tax benefit. The example that prompted NH to form a Commission to study “market-based sourcing” was a food broker, let’s say, buying turkeys in the Carolinas and selling them to grocery chains in Maine (shipped directly to Maine). In this example, under NH law, the service was being performed in NH, so the broker was obligated to pay NH business tax. Unknow to this broker, Maine changed its laws to become a “market-based sourcing state,” meaning the broker was also obligated to pay tax a second time to Maine because that is where the benefit of the service was received. Yes, being taxed twice.

The Apportionment Commission, made up of legislators (including myself) from the House and Senate as well as some of NH’s best tax experts and the Commissioner of the Department of Revenue Administration (DRA), among others, met for a year and a half. We concluded a move forward with “market-based sourcing” should occur. The Commission also examined the concept of a “single sales factor” but did not endorse moving forward because of the lack of data to understand the impact of this major tax change. We were aware that the DRA was implementing a new computer system in the coming years that would be able to generate valuable back-end data.

“Market-based sourcing” moved through the House and Senate in normal order, with hearings in both bodies and votes in both chambers. “Market-based sourcing” is now in effect for taxable periods ending on or after December 31, 2021. The good news is that NH service businesses who were being double-taxed will no longer be. This means all NH service businesses doing work benefiting customers in other states will no longer be taxed by NH. The challenge to all of this is that the DRA must find all those businesses based in other states providing services to customers in NH and thus benefit. This must occur to make up for this lost revenue by taxing those out of state service businesses. Some of these out of state businesses will be alerted to NH’s tax law change by their tax accountants. The only concern in the HW&MC is that not all will file a tax return, meaning that DRA must find these companies in other states that should now be filing but are not.

Over the last several years, more and more states have moved to the “single sales factor.” This means that the apportionment of business profits is based upon the state in which sales occurs. In this apportionment model, the state in which tangible property and staff are located no longer matters. With this, if a NH company manufactures in NH but sells not only in NH but in many other states, it is the state in which the sales occurs that gets credit in this formula. So if a NH company sells their product 30% in NH and 70% in other states, NH only can tax 30% of the profits. If other states selling goods to NH “are single sales factor” states, then NH will be able to tax a company selling to NH on the portion of its sales that are to customers in NH.

Without hearings in the HW&MC, the Senate inserted “single sales factor” apportionment into HB4, which was the trailer budget bill of the compromise budget that passed in September 2019 after the Governor vetoed the original budget. To placate the House also in HB4 was a provision that there would be an Apportionment Committee made up of four House members and three Senators. This joint committee was to meet twice to monitor the progress of “market based-sourcing” and vote in November 2020 whether to rescind the statute that says “single sales factor” will be in effect for taxable periods ending on or after December 31, 2022. The HW&MC was told by counsel that this was constitutional. After Covid hit, no meetings occurred, and in November 2020, the same Council informed the joint committee that the rescinding clause was not constitutional, so no vote was taken. As a result, a single sales factor is now state law.

HB281 reflects the bipartisan position of the HW&MC from last term to slow down the implementation of “single sales factor.” This year’s Ways and Means Committee voted on Feb. 4 on a 22-0 vote for HB281, which slows down the implementation of “single sales factor.” The HW&MC position is based upon:

We need to let the change to “market-based sourcing” set in to see the impact on business tax revenues.
We need to allow the new DRA computer system time to begin providing much-needed data that will help in finalizing a comfort level with the implementation of a “single sales factor.”
We need to ensure that a move to a “single sales factor” does not create a major hole in business taxes, which is the state’s major source of revenue. Other states have jumped in without data because they have personal income taxes and sales taxes to buffer any potential mistake on their part.
We understand the business community is split on whether this is a positive for them, so we need time to evaluate this.
We will be passing HB10, which continues the reduction in both the BPT and BET tax rates, and we want the time to evaluate that impact.
I run for office for three major reasons: to keep our tax rates as low as possible, prevent any broad-based tax, and support our businesses so they can prosper, thus creating good-paying jobs. This needs to be balanced by the need to raise enough revenues to support essential services functioning in an effective and efficient manner. The HW&MC feels NH is on a cliff about to jump in the ocean, not knowing if there are rocks just below the surface. If we jump into “single sales factor” as a state without the needed information, we may do significant harm to the financial health of our state.

Yes, we understand that many States have moved in this direction and that there may come a time when we may have no choice but to jump. That is why HB281 just moves the date of implementation out and does not call for the rescinding of this apportionment approach. HB281 does not increase or lower any business’ tax obligations; it just keeps them the same as this year for a while longer.

NH Journal Link:

Legislative Spotlight: Preserving the New Hampshire Advantage

It’s no secret that House Democrats’ have totally have sold out to end the New Hampshire Advantage. Under their control our state had to fight back against multiple attempts at an income tax and a sales tax. This is a reminder that the New Hampshire Advantage is never more than one election away from extinction. Several Republican representatives have put forth Constitutional Amendment Concurrent Resolution’s (CACR) to allow voters an opportunity to enshrine these principles in our State Constitution. You can read more at the links below:

CACR1 – taxes. Providing that an income tax on earned personal income shall be prohibited.

Link to text HERE.

CACR2 – taxes. Providing that any broad-based sales tax shall be prohibited.

Link to text HERE.

HB20- Richard “Dick” Hinch Education Freedom Accounts Fact Sheet

Attached is a fact sheet on HB20, establishing the Richard “Dick” Hinch education freedom account program. This document provides important facts on eligibility, EFA funding, accountability, and several other important subjects regarding this legislation. Please click on the following link to read this document:

Link: HB20 – Richard “Dick” Hinch Education Freedom Accounts Fact Sheet

New Hampshire Department of Education Publishes Fiscal Analysis of Education Freedom Accounts

Potential taxpayer savings of $360-$393 million over next decade from proposed legislation

CONCORD: The New Hampshire Department of Education today published the attached long-term comprehensive modeling analysis of the taxpayer savings of proposed legislation, “Establishing the Richard “Dick” Hinch Education Freedom Account Program.” The study projects that New Hampshire taxpayers would save $360 million to $390 million over the next decade.

The Education Freedom Account education program (“EFA”), as proposed, allows eligible New Hampshire students to direct state funded per-pupil education adequacy grants toward eligible educational programming of their choice.

“Through this pandemic, we have seen tremendous demand for educational options as families searched for instructional models that met the needs of their children and families,” stated Frank Edelblut, commissioner of education. “Some of those families were driven based on finding an environment where their children could thrive educationally and others were more focused on the need to get back to work. The EFA education program will provide much more flexibility and create many more options to those families while at the same time providing some relief to taxpayers who also have felt the strain of the pandemic.”

“Empowering families with educational freedom ultimately empowers students to achieve their full potential” stated Governor Jeb Bush, 43rd Governor of Florida and chairman of ExcelinEd in Action. “Education Freedom Accounts allow parents to customize their child’s learning, strengthening education outcomes and give students a boost toward academic and lifelong success. As America’s families recover from the pandemic’s broad disruptions, there isn’t a worthier investment.”

The proposed legislation enumerates a variety of operational aspects of the program, including student eligibility, program administration, defining qualified expenses, enrollment procedures, as well as governance and oversight by a newly established Legislative Oversight Committee. While these are all important programmatic aspects of the proposed legislation, the department’s analysis focused solely on the fiscal impact to New Hampshire taxpayers.

House Remote Testimony and Sign in Directions

There have been several questions raised about how to give remote testimony and sign in on bills as the House conducts it’s business using the hybrid model. We have provided the directions below as well as the link to the NH House Remote Sign In Sheet. These links can be found on the homepage at

Link: House Remote Testimony and Sign in Directions

Link: House Remote Testimony/Sign in Sheet

Governor Sununu Budget Address

On Thursday this week Governor Sununu gave his budget address that highlighted his priorities. You can view that and additional budget documents at the links below:

Governor Sununu Budget Address
Governor’s Executive Budget Summary
Governor’s Operating Budget

NH DHHS: COVID-19 Summary Dashboard

The State of New Hampshire’s COVID-19 Dashboard displays the most recent data available that is reported to the NH Department of Health and Human Services regarding cases, hospitalizations, and deaths, with further demographic detail and county of residence. This data is reported daily for public review while also protecting individual privacy.

Link: COVID-19 Summary Dashboard

New Hampshire DHHS: Daily Updates

Below are the past weeks updates regarding the status of COVID-19 in New Hampshire. You can see them below:

February 5th
February 6th
February 7th
February 8th
February 9th
February 10th
February 11th

GOFERR Transparency Documents

The Governor’s Office for Emergency Relief and Recovery has multiple pages where you can track the expenditures made:

New Hampshire Employment Security: COVID-19 Unemployment Update

On Thursday, New Hampshire Employment Security released their weekly claims update. They reported that:

“New Hampshire’s continued claims in the regular unemployment insurance (UI) program were 26,862 during the week ended January 30th, down 1,046 (or 3.7%) from 27,908 the prior week. U.S. regular UI continued claims decreased by 3.2 percent on a not seasonally adjusted basis. Continuing claims (by individuals who remain unemployed and file a “continuing claim” for unemployment insurance) is an important metric in assessing New Hampshire’s progress of economic recovery from pandemicrequired restrictions and related economic effects. Eighteen (18) states experienced an increase in regular UI program continuing claims during the week ended January 30th, including Rhode Island and Vermont among New England states.”

Link: February 11th COVID-19 Unemployment Update

New Hampshire Novel Coronavirus (COVID-19) DHHS Page

The New Hampshire Department of Health and Human Serviceshas issued dailyupdates regarding COVID-19 in New Hampshire. You can see the full list here.

New Hampshire 2019 Novel Coronavirus (COVID-19) Summary Report

NH Persons with COVID-191 69,612
Recovered 65,349 (94%)
Deaths Attributed to COVID-19 1,117 (2%)
Total Current COVID-19 Cases 3,146
Current Hospitalizations 138
Persons with Test Pending at NH PHL 654

Current Cases by County

Belknap 128
Carroll 68
Cheshire 105
Coos 51
Grafton 179
Hillsborough – Other 468
Hillsborough – Manchester 358
Hillsborough – Nashua 242
Merrimack 263
Rockingham 763
Strafford 386
Sullivan 91
Unknown 44

Republicans: 212
Democrats: 186
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