01-04-2025
Business tax rate cuts cost N.H. at least $795 million since 2015, study finds
'The myth about cutting business taxes has cost us revenues is inaccurate,' he added. 'Cutting business taxes has allowed our economy to grow.'
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But new research suggests the cuts haven't boosted business or the economy: A
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The study looks at the impact of reductions to New Hampshire's two primary business taxes: the
Starting in 2015, Republican lawmakers have lowered the state's Business Profit Tax from 8.5 percent to 7.5 percent, in addition to lowering the Business Enterprise Tax from 0.75 percent to 0.55 percent.
'The research clearly shows that business tax rate reductions did not generate enough economic activity to offset the revenue shortfalls they generated,' said Phil Sletten, research director at NHFPI and the study's lead author, in a statement.
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The study also suggests national trends drove its business tax revenue increases, not New Hampshire's rate cuts.
Sletten was able to compare New Hampshire's business tax revenues to neighboring states and found that the Granite State lagged in comparison to Vermont and Maine. New Hampshire's business tax revenues increased by 124 percent from 2015 to 2023, while Vermont revenues grew 166 percent, and Maine revenues grew 167 percent. The Granite State, however, did outpace Massachusetts, which grew 105 percent over the same time frame. Excluding New Hampshire, corporate tax revenues across New England increased by 172 percent.
'New Hampshire's business tax revenue growth lagged behind Maine and Vermont, as well as average growth nationwide, indicating New Hampshire's tax policy changes did not cause the state's increase in revenue,' said Sletten.
Business tax revenues did rise over the past decade, but the study found increases were likely driven by national trends, such as surging corporate profits after the COVID-19 pandemic. Those trends also benefited states that did not reduce business tax rates, the study found.
This article first appeared in Globe NH | Morning Report, our free newsletter focused on the news you need to know about New Hampshire, including great coverage from the Boston Globe and links to interesting articles from other places. If you'd like to receive it via e-mail Monday through Friday,
Amanda Gokee can be reached at
