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NH state revenues higher than last year, despite crummy January

Posted: February 6, 2014

NH state revenues higher than last year, despite crummy January

By KEVIN LANDRIGAN

Staff Writer

CONCORD – Seven months into the state’s budget year, New Hampshire revenues remain slightly higher than last year, despite a sluggish January in which taxes and fees dipped below expectations.

Administrative Services Commissioner Linda Hodgdon cautioned that broad themes can’t be drawn from returns in January, because it’s typically the fourth-smallest month of the year for government income.

“We’re still in reasonably solid shape, but March and April will tell us how good it really is,” Hodgdon said.

Those two months are when 40 percent of the money comes from the state’s two main taxes on business owners: the 8.5 percent levy on corporate profits and the 0.75 percent tax on all business activity.

Last month, the state received $100.7 million in revenue, which was 3.7 percent less than expected.

So far this year, the state has gotten $742.4 million, which is $13 million – or 1.4 percent – ahead of forecast.

“We’re still ahead of the game at this point, which is obviously a good thing,” Hodgdon said.

It’s also much improved from this time last year, when the state was facing a $30 million revenue shortfall. A slow economic recovery improved that picture and ultimately produced a $72 million budget surplus.

The biggest slump this past month was in an assortment of fees and taxes known as “other,” which was 25 percent below target. Hodgdon said much of that was awaiting federal approval of charges the state can assess against federal grants to cover the health care costs for federal workers in New Hampshire once they retired.

Here is how some of the other main state taxes look:

Business taxes: For the year, $257 million, which is $4.6 million more than forecast.

Room and meals: This hospitality and tourism-based tax on hotel room rentals and eating out is almost right on target, with $132 million thus far, compared to a $131 million estimate.

Real Estate Transfer Tax: The improving housing market has the tax up $2.8 million over estimate, or 4.4 percent for the year. Last month it sagged a bit; $9 million came in when $10.5 million had been expected.

Interest and Dividends Tax: This levy on investments is off $3 million, or 8.4 percent for the year. Hodgdon said this could improve once investors pay federal and state taxes in March and April, as returns to this point typically are based on last year’s investment profits.

Communications Tax: This tax on telephone and Internet use has been subpar, with $2 million, or 5.5 percent, off for the year. Some of this is due to a 2012 tax cut the Republican-led Legislature gave for cellular and cable companies eliminating the tax on Internet access business.

Liquor revenue: The taxes on wine sold at private and state-run stores and liquor is holding up, $38 million thus far this year, which is only $400,000 off the forecast.

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