Who really pays for business tax cuts in New Hampshire?

Earlier this month, the New Hampshire House passed what looks like a tiny change: a 0.05 percentage point cut to the Business Enterprise Tax. But this small number masks big consequences. Based on our research, the proposal would drain tens of millions of dollars from the state budget, could weaken funding for education, health care, and local services, and ultimately shift more costs onto families and property taxpayers, all while offering most businesses savings too small to meaningfully boost hiring or investment. Here’s what the data show, and why it matters for Granite Staters.

First, this proposed change could drain millions from an already-strained state budget. Through examining past BET rate reductions, revenue trends, recent tax filing data, official state revenue projections, and interactions with the Business Profits Tax (BPT), we modeled the likely fiscal and economic effects of the proposed 0.05 percent change in the BET tax rate and found that if the proposed BET rate had been implemented during the current biennial State Budget, it would have cost the state $26 million per year in BET revenue. For context, that is equivalent to more than half of last year’s budgets for the New Hampshire Veterans Home, the State Police, or the State’s road and bridge aid to towns and cities. This new annual revenue loss would be on top of the nearly $105 million in BET revenue the State is already set to lose in FY2026 due to prior reductions. These combined business tax cuts are almost twice what the state spent on targeted special education aid over the past two years.