Week Six - February 20, 2009

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

Next week, all legislators will be able to rest up for the legislative and budget marathon that will begin after school vacation week. We predict the rest of the session will see many a long day, and even longer nights, as the State tries to work its way out of one of the worst budget and economic crisis in decades. Governor Lynch is intent on restructuring state government in the name of efficiency and essential services. We predict even those in his party, such as the unions, will have much anxiety over the next few months.

Jobs, Jobs, Jobs

All legislators perk up when any piece of legislation adds jobs in this economy - as long as they are not paid for by the State.

This week the Senate Ways and Means Committee heard the bipartisan-sponsored SB 182, which creates a job creation tax credit against the BPT and BET for businesses that manufacture energy efficient products (i.e., products labeled with the Energy Star label designated by the EPA and the U.S. Department of Energy). These products could be windows, doors, etc. There were lots of questions about how the credit would be applied - to the assembling company or the company that manufacturers components of the product. Any tax credits that encourage manufacturing in New Hampshire are terrific.

Unemployment Compensation Changes

A number of unemployment compensation bills had hearings and were quickly passed by the Senate Commerce, Labor and Consumer Protection Committee. Those passing were:

 SB 89, which grants immunity from liability to the former employee if the Department of Employment Security pays unemployment benefits to the employee, when they were not entitled to benefits. The employer is made whole. The employer’s account would not be charged for the payments once it is determined the mistake was not the employer’s.

 HB 170 would create a self-employment assistance program to pay unemployment benefits to unemployed persons who are attempting to create a new business. Currently, an unemployed person can only receive unemployment benefits if they are looking for a job. In this economy, there are not enough jobs to go around so if one commits to the conditions of the self-employment assistance program, then one can receive a self-employment assistance allowance while getting help starting a business. Employment Security stated they will work with other groups like the Small Business Administration and SCORE to set up assistance programs on how to start a business. There will not be any new, redundant programs. The benefits are charged to the Unemployment Trust Fund and not the former employer, as the former employee’s new business could compete with the old business. We would not want an employer to pay into the fund only to support their potential competition.

 SB 144 allows the Unemployment Trust Fund to pay for claims that may arise from an employee being voluntarily discharged, usually due to a medical condition. The legislation would have the unemployment benefits paid out of the Trust Fund, not directly by the employer.

New Taxes for the Week

The House Ways and Means Committee had a lengthy hearing on a couple of new tax ideas.

One of them was HB 628, which would create a new “tangible personal property inventory and use tax.” The proposal proved to be more conceptual than realistic at this point. It would tax 4% annually all items that one owns and uses that are valued at $10,000 or more. For example, if you own an oriental rug worth $30,000, you would annually pay tax on $20,000 ($30,000 - $10,000) at 4% (i.e., $800) for the use of the rug in your home. Our retailer of the year, Sy Malhfuz, may have a problem with this one!!

It gets more complicated as contractors (even outside of New Hampshire who do work in New Hampshire) would have to pay a use tax on any equipment they use in a job. If they brought in a $100,000 backhoe for a one day job, they pay the use tax of 4%.

Next, we have the proposed inventory tax that is an annual “privilege” tax on all retailers, distributors, or basically anyone who sells, leases or rents property. Again the tax is 4% on items $10,000 or more. One doesn’t have to think too hard to understand why the NH Automobile Association is strongly opposing this legislation. The original fiscal note or the State expenditures on this bill was $15 million, but after hearing testimony, the DRA revised their estimate to $25 million and 18 months to implement. WOW! We do not believe this bill will be deemed ready for “primetime”. This legislation smells of reinstituting some form of the old stock and trade tax.

Next came three bills increasing the cigarette taxes: HB 568, HB 567, and HB 638. All three bills increase the tax on tobacco. Two increase the rate for tobacco products, other than cigarettes, from 19% of wholesale to approximately 60% of wholesale, which is comparable to the tax currently on cigarettes. The premium cigar shops came out in droves to oppose any tax of premium cigars. The other bill increases the cigarette tax. Some of the new money is designated for the tobacco use prevention fund. We are betting some tax increase on tobacco passes in this climate.

The Weeks Ahead

Enjoy Vacation Week, and reserve your tickets for the Chamber’s first-ever Comedy Night next Friday evening, February 27! Visit www.nashuachamber.com for more details.

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