Different tax rates for different uses [08/10/2002]

By Catherine Woodall

People do listen when someone proposes a new tax as displayed recently when Bob Barriault, a private citizen, proposed a method of taxing the hospitality industry. Although the idea was not accepted by the Mount Washington Valley Chamber of Commerce and would have needed legislative approval, credit must given to Barriault for trying to address the tax situation that exists in the State of New Hampshire. At the very least, the inequity of the Room and Meals Tax was again brought to the forefront of discussion. The distribution of that tax money based on population instead of the amount generated by a particular municipality is extremely unfair. Even so, it is unlikely that this situation will ever change because the bulk of the population is in the southern part of the state and the elected representatives recognize a goose that lays a golden egg.Nevertheless, an unwillingness to change the Room and Meals Tax should not hinder the legislature from addressing other means of equalizing the tax structure for New Hampshire. All taxes generate from the state legislature and with the exception of property taxes all taxes are paid to the state, not to the cities and towns. Which means that the cities and towns must bear the cost of the infrastructure when growth occurs. Looking at the tax structure of the surrounding states and the tax rates of some of the bordering towns brings into question the tax system in New Hampshire.Since all states have a multitude of taxes from various sources, a comparison of the property tax does not tell the true picture of taxes an individual or business pays. However, in all states property tax is paid to the cities and towns and used to support the infrastructure for the municipality, so it is necessary to compare the methods of taxation for property taxes.Maine and New Hampshire set their tax formula at state level and use the same formula for both commercial and residential. Although Vermont municipalities can make a tax distinction between residential and commercial uses, most do not. In Massachusetts the towns set the property tax rate and can distinguish between residential and commercial properties. This seems an equable way of taxation because the towns that support the infrastructurefor the national retailers or large businesses can recoup some of the cost.For example, comparing the overall property tax rate per thousand in various towns in the different states shows the difference in property taxes. For Portsmouth, a town with large retailers, the rate is $31.33 per $1,000.Amsbury, Mass., a town just across border without large retail outlets, also taxes all properties at the same rate of $17.64. In Salem, the rate is $19.15, whereas in Haverhill, Mass., to the south, the residential rate is $13.58 and commercial $22.46. The area in Danvers and Peabody, Mass., east to west between Route 95 and Route 128, and north to south along Route 14 and Endicott Street, is one massive shopping area. Both towns' tax rate distinguishes between residential and commercial uses. The residential tax rate in Danvers is $12.92 and the commercial is $16.98. In Peabody the residential tax rate is $8.94 and commercial is $17.65. In Conway, the tax rate is $22.15 for all properties and in Fryeburg, Maine the rate is $18.25. In Littleton, the property tax rate in town is $25.29 and outside town is $25.95. St. Johnsbury, Vt., set the tax rate the same for both residential and commercial at $27.56 in town and $23 out of town and in Newport City, Vt., the rate is $25.70 for all property.Something must be done in New Hampshire to give the residents some relief from the high property taxes. The homeowner has little or no control over the marketing trends of expanding large national and international chains consuming the retail market and drawing their customer base from a 40-mile radius. However, requiring the homeowner to subsidize big business by supporting the increased infrastructure through higher property taxes is not the American way. Or is it? Allowing the cities and towns the right to tax different uses at different rates would help alleviate the tax burden for homeowners and provide some equity in taxation. Businesses can and should pay their own share of the expense of doing business in a community. Isn't that what free market is about?Catherine Woodall lives in Conway and is a former member of the Conway Planning Board.