Gov. Chris Sununu proposed cutting the rate of the business enterprise tax in his Feb. 11 $13.5 billion budget presentation, but he was silent on the business profits tax, which lawmakers in his party also want to cut.

His proposal also doesn’t go quite as far as the Republican legislative leadership wants in cutting the BET, though he does want to more than double the filing threshold.

In announcing his proposal to cut the BET rate along with the rooms and meals tax and the interest and dividends tax, Sununu said that his budget includes “tax cuts for everyone. Whether you are a small business just starting out, a family of four looking to enjoy a meal out, or are retired and enjoying life in the Granite State, we are providing equitable, across-the-board tax relief for the people of our state.”

But when it comes to businesses, not everyone is included, since the BET is mainly paid by smaller businesses, and the BPT payers are usually larger and often located out of state. But that hasn’t caused very much griping among his party or business advocates.

“Targeting small business is obviously step one, since they have been the ones the most hard hit by the pandemic,” said Senate Majority Leader Jeb Bradley, R-Wolfeboro. “We have already lowered the BPT a lot. If there is only so much tax relief to go around, cutting the BET makes the most sense.”

Even Susan Almy, D-Lebanon, ranking member of the House Ways and Means Committee said, “If you are going to cut some taxes, the BET is better because the businesses are not as large, but it will be at a cost that they may not get the services they want.”

Sununu proposed cutting the BET from 0.6% to 0.55% of what a business pays out in wages, interest and dividends. He also is seeking to increase the filing threshold before a business has to file the tax, from $107,000 to $250,000.

Lawmakers are already considering legislation identical to the governor’s proposal, introduced by both the House Speaker (House Bill 10) and the Senate President Chuck Morse (Senate Bill 13), that would have cut the BET to 0.55% this calendar year as opposed to the budget biennium, which starts July 1, 2021. The bill then cuts it down to 0.5% in calendar year 2022, which would start next January.

But the bills would also cut the BPT, currently 7.7%, to 7.6% this year and 7.5% the next. That would cost the treasury roughly $138 million over the next four years, including nearly $79 million during the biennium, according to the state Department of Revenue Administration. The DRA fiscal note did not break down the cost of just cutting the BET.

Morse said he would still push for a BPT cut. “We have to lower the BPT,” he said. “We firmly promised it. But this sends the right message, to keep taxes down and live within our means.”

Morse noted that the interest and dividends tax cut goes further than his bill, which would raise the exemptions for those over 65. Actually, the budget presentation doesn’t spell out the amount of the governor’s I&D tax cut, just that he favors phasing it out over next five years.

Sununu was more specific about his rooms and meals tax cut, lowering it from 9% to 8.5%, while also increasing the share towns get from rooms and meals revenue to 40%. — BOB SANDERS